Filed Persuant To Rule 424(b)(5)
                                               Registration File No.: 333-125164

PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JANUARY 26, 2006)

                                  $756,643,100
                                  (Approximate)
                                   CWABS, INC.
                                    DEPOSITOR
                           [COUNTRYWIDE LOGO OMITTED]
                              ------------------
                                   HOME LOANS
                               SPONSOR AND SELLER
                       COUNTRYWIDE HOME LOANS SERVICING LP
                                 MASTER SERVICER
                  CWABS ASSET-BACKED CERTIFICATES TRUST 2006-1
                                 ISSUING ENTITY
                    ASSET-BACKED CERTIFICATES, SERIES 2006-1
      Distributions are payable on the 25th day of each month, beginning in
                                  February 2006
                             ----------------------
The issuing entity will issue certificates, including the following classes of
certificates that are offered pursuant to this prospectus supplement and the
accompanying prospectus:

--------------------------------------------------------------------------------
             ORIGINAL
           CERTIFICATE
            PRINCIPAL           PRICE TO         UNDERWRITING      PROCEEDS TO
CLASS       BALANCE(1)           PUBLIC            DISCOUNT        DEPOSITOR(2)
--------------------------------------------------------------------------------
AF-1       $147,232,000        100.00000%          0.05208%         99.94792%
--------------------------------------------------------------------------------
AF-2       $ 22,857,000         99.99949%          0.10417%         99.89532%
--------------------------------------------------------------------------------
AF-3       $ 90,995,000         99.99984%          0.15625%         99.84359%
--------------------------------------------------------------------------------
AF-4       $ 21,633,000         99.99852%          0.25000%         99.74852%
--------------------------------------------------------------------------------
AF-5       $ 38,617,000         99.99873%          0.33333%         99.66540%
--------------------------------------------------------------------------------
AF-6       $ 44,200,000         99.99802%          0.41667%         99.58135%
--------------------------------------------------------------------------------
MF-1       $ 13,260,000         99.99814%          0.41667%         99.58147%
--------------------------------------------------------------------------------
MF-2       $ 12,155,000         99.99723%          0.50000%         99.49723%
--------------------------------------------------------------------------------
MF-3       $  7,293,000         99.99648%          0.58333%         99.41315%
--------------------------------------------------------------------------------
MF-4       $  6,409,000         99.46265%          0.83333%         98.62932%
--------------------------------------------------------------------------------
MF-5       $  6,188,000         98.99848%          1.00000%         97.99848%
--------------------------------------------------------------------------------
MF-6       $  5,525,000         98.53713%          1.25000%         97.28713%
--------------------------------------------------------------------------------
AV-1       $139,560,000        100.00000%          0.05217%         99.94783%
--------------------------------------------------------------------------------
AV-2       $115,712,000        100.00000%          0.10333%         99.89667%
--------------------------------------------------------------------------------
AV-3       $ 25,042,000        100.00000%          0.10333%         99.89667%
--------------------------------------------------------------------------------
MV-1       $ 14,320,000        100.00000%          0.41667%         99.58333%
--------------------------------------------------------------------------------
MV-2       $ 13,067,000        100.00000%          0.50000%         99.50000%
--------------------------------------------------------------------------------
MV-3       $  7,518,000        100.00000%          0.83333%         99.16667%
--------------------------------------------------------------------------------
MV-4       $  6,802,000        100.00000%          0.91667%         99.08333%
--------------------------------------------------------------------------------
MV-5       $  6,802,000        100.00000%          0.96667%         99.03333%
--------------------------------------------------------------------------------
MV-6       $  5,907,000        100.00000%          1.00000%         99.00000%
--------------------------------------------------------------------------------
MV-7       $  5,549,000        100.00000%          1.08333%         98.91667%
--------------------------------------------------------------------------------
A-R        $        100           (3)                (3)               (3)
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE S-18 IN THIS PROSPECTUS
SUPPLEMENT AND ON PAGE 2 IN THE PROSPECTUS.

The certificates represent obligations of the issuing entity only and do not
represent an interest in or obligation of CWABS, Inc., Countrywide Home Loans,
Inc. or any of their affiliates.

This prospectus supplement may be used to offer and sell the offered
certificates only if accompanied by the prospectus
--------------------------------------------------------------------------------

(1)   This amount is subject to a permitted variance in the aggregate of plus or
      minus 10%.

(2)   Before deducting expenses payable by the Depositor estimated to be
      approximately $675,000 in the aggregate.

(3)   The Class A-R Certificates will not be purchased by the underwriters and
      are being transferred to Countrywide Home Loans, Inc. as partial
      consideration for the sale of the mortgage loans. See "Method of
      Distribution" in this prospectus supplement.

The classes of certificates offered by this prospectus supplement are listed,
together with their interest rates, in the tables under "Summary -- Description
of the Certificates" on page S-54 of this prospectus supplement. This prospectus
supplement and the accompanying prospectus relate only to the offering of the
certificates listed above and not to the other classes of certificates that will
be issued by the issuing entity.

The certificates represent interests in a pool of adjustable rate and fixed
rate, credit blemished mortgage loans that are secured by first liens on one- to
four-family residential properties, as described in this prospectus supplement.

Credit enhancement for the certificates consists of:

o     Overcollateralization and

o     Subordination.

The Class AV Certificates and the adjustable rate subordinate certificates also
will have the benefit of an interest rate swap contract, and the Class AF-1
Certificates will have the benefit of an interest rate corridor contract.

The credit enhancement for each class of certificates varies. Not all credit
enhancement is available for every class. The credit enhancement for the
certificates is described in more detail in this prospectus supplement.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

COUNTRYWIDE SECURITIES CORPORATION
                                                                 LEHMAN BROTHERS
February 8, 2006






                               TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT                                                      PAGE
---------------------                                                     -----

Summary ....................................................................S-1
Summary of Transaction Parties ............................................S-17
Risk Factors ..............................................................S-18
The Mortgage Pool .........................................................S-29
      General .............................................................S-29
      The Statistical Calculation Pool ....................................S-32
      Assignment of the Mortgage Loans ....................................S-32
      Pre-Funding .........................................................S-35
      Underwriting Standards ..............................................S-36
Servicing of the Mortgage Loans ...........................................S-41
      General .............................................................S-41
      Countrywide Home Loans Servicing LP .................................S-42
      Countrywide Home Loans ..............................................S-42
      Loan Servicing ......................................................S-43
      Collection Procedures ...............................................S-44
      Servicing Compensation and Payment of Expenses ......................S-45
      Adjustment to Master Servicing Fee in Connection With Certain
            Prepaid Mortgage Loans ........................................S-46
      Advances ............................................................S-46
      Certain Modifications and Refinancings ..............................S-47
      Litton Loan Servicing LP ............................................S-47
      The Special Sub-Servicing Agreement .................................S-50
The Issuing Entity ........................................................S-53
Static Pool Data ..........................................................S-54
Description of the Certificates ...........................................S-54
      General .............................................................S-54
      Book-Entry Certificates; Denominations ..............................S-55
      Glossary of Terms ...................................................S-56
      Deposits to the Certificate Account .................................S-69
      Withdrawals from the Certificate Account ............................S-70
      Deposits to the Distribution Account ................................S-71
      Withdrawals from the Distribution Account ...........................S-71
      Investments of Amounts Held in Accounts .............................S-72
      Fees and Expenses ...................................................S-74
      Distributions .......................................................S-77
      Overcollateralization Provisions ....................................S-80
      The Corridor Contract ...............................................S-84
      Calculation of One-Month LIBOR ......................................S-91
      Carryover Reserve Fund ..............................................S-92
      Applied Realized Loss Amounts .......................................S-93
      Reports to Certificateholders .......................................S-93
      Amendment ...........................................................S-95
      Voting Rights .......................................................S-95
      Optional Purchase of Defaulted Loans ................................S-95
      Events of Default; Remedies .........................................S-96
      Optional Termination ................................................S-97
      Certain Matters Regarding the Master Servicer, the
            Depositor, the Sellers and the NIM Insurer ....................S-98
      The Trustee .........................................................S-98
      Restrictions on Transfer of the Class
            A-R Certificates ..............................................S-99
      Ownership of the Residual Certificates .............................S-100
      Restrictions on Investment, Suitability Requirements ...............S-100
      Rights of the NIM Insurer Under the Pooling and
            Servicing Agreement ..........................................S-100
Yield, Prepayment and Maturity Considerations ............................S-101
      General ............................................................S-101
      Prepayments and Yields for the Offered Certificates ................S-102
      Last Scheduled Distribution Date ...................................S-103
      Prepayment Model ...................................................S-104
      Decrement Tables; Weighted Average Lives ...........................S-105
Legal Proceedings ........................................................S-117
Material Federal Income Tax Consequences .................................S-117
      Taxation of the REMIC Regular Interest Components of the
            Regular Certificates .........................................S-118
      Dispositions of Regular Certificates ...............................S-119
      Tax Treatment For Certain Purposes .................................S-120
      Residual Certificates ..............................................S-120
Other Taxes ..............................................................S-121
ERISA Considerations .....................................................S-121
Method of Distribution ...................................................S-123
Use of Proceeds ..........................................................S-125
Legal Matters ............................................................S-125
Ratings ..................................................................S-126
Index of Defined Terms ...................................................S-127

Exhibit A ..................................................................A-1

Annex I ....................................................................I-1


                                       i



                                                                           PAGE
                                                                           ----
PROSPECTUS
----------

Important Notice About Information in This
      Prospectus and Each Accompanying
      Prospectus Supplement ..................................................4

Risk Factors..................................................................5

The Trust Fund ..............................................................16

Use of Proceeds .............................................................22

The Depositor ...............................................................22

Loan Program ................................................................22

Description of the Securities ...............................................25

Credit Enhancement ..........................................................41

Yield and Prepayment Considerations .........................................46

The Agreements ..............................................................49

Certain Legal Aspects of the Loans ..........................................63

Material Federal Income Tax Consequences ....................................77

Other Tax Considerations ....................................................98

ERISA Considerations ........................................................99

Legal Investment ...........................................................102

Method of Distribution .....................................................103

Legal Matters ..............................................................104

Financial Information ......................................................104

Rating .....................................................................104

Index to Defined Terms .....................................................106


                                       ii



                                     SUMMARY

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

WHILE THIS SUMMARY CONTAINS AN OVERVIEW OF CERTAIN CALCULATIONS, CASH FLOW
PRIORITIES AND OTHER INFORMATION TO AID YOUR UNDERSTANDING, YOU SHOULD READ
CAREFULLY THE FULL DESCRIPTION OF THESE CALCULATIONS, CASH FLOW PRIORITIES AND
OTHER INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
BEFORE MAKING ANY INVESTMENT DECISION.

ISSUING ENTITY

CWABS Asset-Backed Certificates Trust 2006-1, a common law trust formed under
the laws of the State of New York.

See "The Issuing Entity" in this prospectus supplement.

DEPOSITOR

CWABS, Inc., a Delaware corporation and a limited purpose finance subsidiary of
Countrywide Financial Corporation, a Delaware corporation.

See "The Depositor" in the prospectus.

SPONSOR AND SELLERS

Countrywide Home Loans, Inc. will be the sponsor of the transaction and a seller
of a portion of the mortgage loans. Other sellers may include one or more
special purpose entities established by Countrywide Financial Corporation or one
of its subsidiaries, which acquired the mortgage loans they are selling directly
from Countrywide Home Loans, Inc.

See "Servicing of the Mortgage Loans -- Countrywide Home Loans" in this
prospectus supplement.

MASTER SERVICER

Countrywide Home Loans Servicing LP.

See "Servicing of the Mortgage Loans -- The Master Servicer" in this prospectus
supplement.

SPECIAL SERVICER

Litton Loan Servicing LP.

See "Servicing of the Mortgage Loans -- The Special Servicer" in this prospectus
supplement.

TRUSTEE

The Bank of New York, a New York banking corporation

See "Description of the Certificates -- The Trustee" in this prospectus
supplement.

THE NIM INSURER

After the closing date, a separate trust or trusts (or other form of entity) may
be established to issue net interest margin securities secured by all or a
portion of the Class PF, Class PV, Class CF and Class CV Certificates. Those net
interest margin securities may have the benefit of one or more financial
guaranty insurance policies that guaranty payments on those securities. The
insurer or insurers issuing these financial guaranty insurance policies are
referred to in this prospectus supplement as the "NIM Insurer." The references
to the NIM Insurer in this prospectus supplement apply only if the net interest
margin securities are so insured.

Any NIM Insurer will have a number of rights under the pooling and servicing
agreement that will limit and otherwise affect the rights of the holders of the
offered certificates. Any insurance policy issued by a NIM Insurer will not
cover, and will not benefit in any manner whatsoever, the offered certificates.

See "Risk Factors--Rights of the NIM Insurer" in this prospectus supplement.

POOLING AND SERVICING AGREEMENT

The pooling and servicing agreement among the sellers, the master servicer, the
depositor and the trustee, under which the issuing entity will be formed.

CUT-OFF DATE

Initial Mortgage Loans:

For any initial mortgage loan, the later of January 1, 2006 and the origination
date of that mortgage loan (referred to as the initial cut-off date).


                                      S-1



Subsequent Mortgage Loans:

For any subsequent mortgage loan, the later of the first day of the month of the
related subsequent transfer date and the origination date of that subsequent
mortgage loan (referred to as the subsequent cut-off date).

CLOSING DATE

On or about February 10, 2006.

PRE-FUNDING

On the closing date, the depositor may elect to deposit an amount of up to 25%
of the initial aggregate certificate principal balance of the certificates
issued by the issuing entity in a pre-funding account (referred to as the
pre-funded amount).

Pre-Funded Amount:

Any pre-funded amount will not exceed 25% of the initial aggregate certificate
principal balance of the certificates issued by the issuing entity, which will
be allocated among the loan groups so that the amount allocated to any loan
group will not exceed 25% of the aggregate certificate principal balance of the
classes of certificates related to that loan group.

Funding Period:

Any funding period will begin on the closing date and end on the earlier of (x)
the date the amount in the pre-funding account is less than $175,000 and (y)
March 27, 2006.

Use of Pre-Funded Amount:

Any pre-funded amount is expected to be used to purchase subsequent mortgage
loans. Any pre-funded amount not used during the funding period to purchase
subsequent mortgage loans will be distributed to holders of the related senior
certificates as a prepayment of principal on the distribution date immediately
following the end of the funding period.

Restrictions on Subsequent Mortgage Loan Purchases:

Purchases of subsequent mortgage loans are subject to the same criteria as the
initial mortgage loans and additional restrictions related to the composition of
the related loan group following the acquisition of the subsequent mortgage
loans, as described in this prospectus supplement.

Interest Shortfall Payments:

To the extent needed to make required interest payments on the interest-bearing
certificates on or prior to the April 2006 distribution date, Countrywide Home
Loans, Inc. will make interest shortfall payments to the issuing entity to
offset shortfalls in interest collections attributable to the pre-funding
mechanism or because newly originated loans do not have a payment due date in
the due period related to the subject distribution date.

See "The Mortgage Pool -- Pre-Funding" in this prospectus supplement.

THE MORTGAGE LOANS

The mortgage pool will consist of fixed and adjustable rate, credit-blemished
mortgage loans that are secured by first liens on one- to four-family
properties. The mortgage loans will be divided into two separate groups. Each
group of mortgage loans is referred to as a "loan group." Loan group 1 will
consist of first lien fixed rate mortgage loans. Loan group 2 will consist of
first lien adjustable rate mortgage loans.

See "The Mortgage Pool" in this prospectus supplement.

STATISTICAL CALCULATION INFORMATION

The statistical information presented in this prospectus supplement relates to a
statistical calculation pool that does not reflect all of the mortgage loans
that will be included in the issuing entity. Additional mortgage loans will be
included in the mortgage pool on the closing date, and subsequent mortgage loans
may be included during the funding period. In addition, certain mortgage loans
in the statistical calculation pool may not be included in the mortgage pool on
the closing date because they have prepaid in full or were determined not to
meet the eligibility requirements for the mortgage pool.

The information with respect to the statistical calculation pool is, unless
otherwise specified, based on the scheduled principal balances as of January 1,
2006, which is the statistical calculation date. The aggregate stated principal
balance of the statistical calculation pool as of the statistical calculation
date is referred to as the statistical calculation date pool principal balance.
As of the statistical calculation date, the statistical calculation date pool
principal balance was approximately $900,009,638.


                                      S-2



Unless otherwise noted, all statistical percentages are measured by the
statistical calculation date pool principal balance.

As of the statistical calculation date, the group 1 mortgage loans in the
statistical calculation pool had the following characteristics:

Aggregate Current Principal Balance                     $500,007,727

Weighted Average Mortgage Rate                             7.149%

Range of Mortgage Rates                              5.500% to 11.875%

Average Current Principal Balance                         $204,586

Range of Outstanding Principal Balances             $44,000 to $938,000

Weighted Average Original Loan-to-Value Ratio              73.77%

Weighted Average Original Term to Maturity               355 months

Weighted Average Credit Bureau Risk Score                   611

Weighted Average Remaining Term to Stated Maturity       355 months

Geographic Concentrations in excess of 10%:

  California                                               27.37%

  Florida                                                  15.11%

  New York                                                 11.34%

As of the statistical calculation date, the group 2 mortgage loans in the
statistical calculation pool had the following characteristics:

Aggregate Current Principal Balance                     $400,001,910

Weighted Average Mortgage Rate                             7.502%

Range of Mortgage Rates                              4.950% to 12.000%

Average Current Principal Balance                         $228,573

Range of Outstanding Principal Balances             $50,025 to $985,326

Weighted Average Original Loan-to-Value Ratio              77.78%

Weighted Average Original Term to Maturity               360 months

Weighted Average Credit Bureau Risk Score                   618

Weighted Average Remaining Term to Stated Maturity       359 months

Weighted Average Gross Margin                              6.621%

Weighted Average Maximum Mortgage Rate                    14.381%

Weighted Average Minimum Mortgage Rate                     7.488%

Geographic Concentrations in excess of 10%:

  California                                               32.48%

  Florida                                                  16.90%


                                      S-3



DESCRIPTION OF THE CERTIFICATES

The issuing entity will issue thirty-two classes of certificates, twenty-three
of which are offered by this prospectus supplement and the accompanying
prospectus:



                                INITIAL
                              CERTIFICATE                                      FINAL SCHEDULED
                               PRINCIPAL                                        DISTRIBUTION      INITIAL RATING    INITIAL RATING
         CLASS                BALANCE(1)                  TYPE                     DATE(2)         (MOODY'S)(3)        (S&P)(3)
------------------------     -------------      ---------------------------    ---------------    --------------    --------------

OFFERED CERTIFICATES
AF-1....................     $ 147,232,000        Senior/Adjustable Rate        November 2025          Aaa               AAA
AF-2....................     $  22,857,000           Senior/Fixed Rate            May 2027             Aaa               AAA
AF-3....................     $  90,995,000           Senior/Fixed Rate            July 2033            Aaa               AAA
AF-4....................     $  21,633,000           Senior/Fixed Rate         September 2034          Aaa               AAA
AF-5....................     $  38,617,000           Senior/Fixed Rate            July 2036            Aaa               AAA
AF-6....................     $  44,200,000         Senior/Fixed Rate/NAS          May 2036             Aaa               AAA
MF-1....................     $  13,260,000        Subordinate/Fixed Rate          May 2036             Aa1               AA+
MF-2....................     $  12,155,000        Subordinate/Fixed Rate          May 2036             Aa2               AA+
MF-3....................     $   7,293,000        Subordinate/Fixed Rate         April 2036            Aa3                AA
MF-4....................     $   6,409,000        Subordinate/Fixed Rate         April 2036             A1               AA-
MF-5....................     $   6,188,000        Subordinate/Fixed Rate         March 2036             A2                A+
MF-6....................     $   5,525,000        Subordinate/Fixed Rate        February 2036           A3                A
AV-1....................     $ 139,560,000        Senior/Adjustable Rate          July 2028            Aaa               AAA
AV-2....................     $ 115,712,000        Senior/Adjustable Rate          May 2035             Aaa               AAA
AV-3....................     $  25,042,000        Senior/Adjustable Rate          June 2036            Aaa               AAA
MV-1....................     $  14,320,000      Subordinate/Adjustable Rate       May 2036             Aa1               AA+
MV-2....................     $  13,067,000      Subordinate/Adjustable Rate       May 2036             Aa2               AA+
MV-3....................     $   7,518,000      Subordinate/Adjustable Rate       May 2036             Aa3                AA
MV-4....................     $   6,802,000      Subordinate/Adjustable Rate      April 2036             A1               AA-
MV-5....................     $   6,802,000      Subordinate/Adjustable Rate      April 2036             A2                A+
MV-6....................     $   5,907,000      Subordinate/Adjustable Rate      March 2036             A3                A
MV-7....................     $   5,549,000      Subordinate/Adjustable Rate      March 2036            Baa1               A
A-R.....................     $         100         Senior/REMIC Residual        February 2006          Aaa               AAA
NON-OFFERED
CERTIFICATES(4)
MF-7....................     $   5,304,000        Subordinate/Fixed Rate        February 2036          Baa1               A
MF-8....................     $   4,641,000        Subordinate/Fixed Rate        December 2035          Baa2               A-
BF......................     $   4,420,000        Subordinate/Fixed Rate        November 2035          Baa3              BBB+
MV-8....................     $   5,012,000      Subordinate/Adjustable Rate     January 2036           Baa2               A-
BV......................     $   3,759,000      Subordinate/Adjustable Rate     November 2035          Baa3              BBB+
Class PF................     $         100          Prepayment Charges               N/A               N/R               N/R
Class PV................     $         100          Prepayment Charges               N/A               N/R               N/R
Class CF................          N/A                    Residual                    N/A               N/R               N/R
Class CV................          N/A                    Residual                    N/A               N/R               N/R


_____________________

(1)   This amount is subject to a permitted variance in the aggregate of plus or
      minus 10% depending on the amount of mortgage loans actually delivered on
      the closing date.

(2)   Each date was determined as described under "Yield, Prepayment and
      Maturity Considerations" in this prospectus supplement.

(3)   The offered certificates will not be offered unless they are assigned the
      indicated ratings by Moody's Investors Service, Inc. ("MOODY'S") and
      Standard & Poor's Ratings Services, a division of The McGraw-Hill
      Companies, Inc. ("S&P"). "N/R" indicates that the agency was not asked to
      rate the certificates. A rating is not a recommendation to buy, sell or
      hold securities. These ratings may be lowered or withdrawn at any time by
      either of the rating agencies. See "Ratings" in this prospectus
      supplement.

(4)   The Class MF-7, Class MF-8, Class BF, Class MV-8, Class BV, Class PF,
      Class PV, Class CF and Class CV Certificates are not offered by this
      prospectus supplement. Any information contained in this prospectus
      supplement with respect to the Class MF-7, Class MF-8, Class BF, Class
      MV-8, Class BV, Class PF, Class PV, Class CF and Class CV Certificates is
      provided only to permit a better understanding of the offered
      certificates.


                                       S-4



The certificates will also have the following characteristics:



                              PASS-THROUGH RATE       PASS-THROUGH RATE
                  RELATED           BEFORE                  AFTER
                   LOAN            OPTIONAL               OPTIONAL                                   INTEREST ACCRUAL
    CLASS          GROUP     TERMINATION DATE(1)     TERMINATION DATE(1)     DELAY/ACCRUAL PERIOD       CONVENTION
--------------    -------    --------------------    -------------------     --------------------    ----------------

OFFERED
CERTIFICATES
AF-1..........       1        LIBOR + 0.130% (2)      LIBOR + 0.130%(2)              (3)              Actual/360(4)
AF-2..........       1            5.281%(5)              5.281%(5)            calendar month(6)         30/360(7)
AF-3..........       1            5.348%(5)              5.348%(5)            calendar month(6)         30/360(7)
AF-4..........       1            5.714%(5)              5.714%(5)            calendar month(6)         30/360(7)
AF-5..........       1            5.884%(5)              6.384%(5)            calendar month(6)         30/360(7)
AF-6..........       1            5.526%(5)              5.526%(5)            calendar month(6)         30/360(7)
MF-1..........       1            5.917%(5)              5.917%(5)            calendar month(6)         30/360(7)
MF-2..........       1            6.016%(5)              6.016%(5)            calendar month(6)         30/360(7)
MF-3..........       1            6.115%(5)              6.115%(5)            calendar month(6)         30/360(7)
MF-4..........       1            6.200%(5)              6.200%(5)            calendar month(6)         30/360(7)
MF-5..........       1            6.200%(5)              6.200%(5)            calendar month(6)         30/360(7)
MF-6..........       1            6.200%(5)              6.200%(5)            calendar month(6)         30/360(7)
AV-1..........       2        LIBOR + 0.080%(8)       LIBOR + 0.160%(8)              (3)              Actual/360(4)
AV-2..........       2        LIBOR + 0.190%(8)       LIBOR + 0.380%(8)              (3)              Actual/360(4)
AV-3..........       2        LIBOR + 0.300%(8)       LIBOR + 0.600%(8)              (3)              Actual/360(4)
MV-1..........       2        LIBOR + 0.390%(8)       LIBOR + 0.585%(8)              (3)              Actual/360(4)
MV-2..........       2        LIBOR + 0.410%(8)       LIBOR + 0.615%(8)              (3)              Actual/360(4)
MV-3..........       2        LIBOR + 0.440%(8)       LIBOR + 0.660%(8)              (3)              Actual/360(4)
MV-4..........       2        LIBOR + 0.560%(8)       LIBOR + 0.840%(8)              (3)              Actual/360(4)
MV-5..........       2        LIBOR + 0.600%(8)       LIBOR + 0.900%(8)              (3)              Actual/360(4)
MV-6..........       2        LIBOR + 0.660%(8)       LIBOR + 0.990%(8)              (3)              Actual/360(4)
MV-7..........       2        LIBOR + 1.300%(8)       LIBOR + 1.950%(8)              (3)              Actual/360(4)
A-R...........    1 and 2            (9)                     (9)                     N/A                   N/A
NON-OFFERED
CERTIFICATES
MF-7..........       1            6.200%(5)              6.200%(5)            calendar month(6)         30/360(7)
MF-8..........       1            6.200%(5)              6.200%(5)            calendar month(6)         30/360(7)
BF............       1            6.200%(5)              6.200%(5)            calendar month(6)         30/360(7)
MV-8..........       2        LIBOR + 1.500%(8)       LIBOR + 2.250%(8)              (3)              Actual/360(4)
BV............       2        LIBOR + 2.250%(8)       LIBOR + 3.375%(8)              (3)              Actual/360(4)
Class PF......       1               N/A                     N/A                     N/A                   N/A
Class PV......       2               N/A                     N/A                     N/A                   N/A
Class CF......       1               N/A                     N/A                     N/A                   N/A
Class CV......       2               N/A                     N/A                     N/A                   N/A


_______________

(1)   If on any distribution date, the pass-through rate for a class of
      interest-bearing certificates is based on the applicable interest rate
      cap, each holder of the applicable certificates will be entitled to
      receive the resulting shortfall from remaining excess cashflow (if any) to
      the extent described in this prospectus supplement under "Description of
      the Certificates -- Overcollateralization Provisions", in the case of the
      Class AF-1 Certificates only, from payments allocated to the issuing
      entity (if any) in respect of the interest rate corridor contract as
      described in this prospectus supplement under "Description of the
      Certificates -- Distributions -- Distributions of Funds from the Corridor
      Contract," and in the case of the Class AV Certificates and adjustable
      rate subordinate certificates only, from payments allocated to the issuing
      entity (if any) in respect of the interest rate swap contract to the
      extent available for that purpose as described in this prospectus
      supplement under "Description of the Certificates -- Distributions --
      Distributions of Funds from the Swap Contract."

(2)   The pass-through rate for the Class AF-1 Certificates may adjust monthly
      and will be subject to an interest rate cap, as described in this
      prospectus supplement under "Description of the Certificates --
      Distributions -- Distributions of Interest." LIBOR refers to One-Month
      LIBOR for the related interest accrual period calculated as described in
      this prospectus supplement under "Description of the Certificates --
      Calculation of One-Month LIBOR."


                                       S-5



(3)   The accrual period for any distribution date will be the one-month period
      from and including the preceding distribution date (or from and including
      the closing date, in the case of the first distribution date) to and
      including the day prior to the current distribution date. These
      certificates will settle without accrued interest.

(4)   Interest accrues at the rate specified in this table based on a 360-day
      year and the actual number of days elapsed during the related accrual
      period.

(5)   The pass-through rates for the Class AF-2, Class AF-3, Class AF-4, Class
      AF-5 and Class AF-6 Certificates and the fixed rate subordinate
      certificates will be subject to an interest rate cap, as described in this
      prospectus supplement under "Description of the Certificates --
      Distributions -- Distributions of Interest."

(6)   The accrual period for any distribution date will be the calendar month
      preceding that distribution date. These certificates will settle with
      accrued interest.

(7)   Interest accrues at the rate specified in this table based on a 360-day
      year that consists of twelve 30-day months.

(8)   The pass-through rates for the Class AV Certificates and the adjustable
      rate subordinate certificates may adjust monthly, will be subject to
      increase after the optional termination date as shown in this table and
      will be subject to an interest rate cap, in each case as described in this
      prospectus supplement under "Description of the Certificates --
      Distributions -- Distributions of Interest." LIBOR refers to One-Month
      LIBOR for the related accrual period calculated as described in this
      prospectus supplement under "Description of the Certificates --
      Calculation of One-Month LIBOR."

(9)   The Class A-R Certificates will not accrue any interest.

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


                                       S-6



DESIGNATIONS

  DESIGNATION               CLASS OF CERTIFICATES
-----------------  ----------------------------------------
Class AF           Class AF-1, Class AF-2, Class AF-3,
  Certificates:    Class AF-4, Class AF-5 and Class AF-6
                   Certificates.

Class AV           Class AV-1, Class AV-2 and Class AV-3
  Certificates:    Certificates.

Senior             Class AF, Class AV and Class A-R
  Certificates:    Certificates.

Subordinate        Class MF-1, Class MF-2, Class MF-3,
  Certificates:    Class MF-4, Class MF-5, Class MF-6,
                   Class MF-7, Class MF-8, Class BF,
                   Class MV-1, Class MV-2, Class MV-3,
                   Class MV-4, Class MV-5, Class MV-6,
                   Class MV-7, Class MV-8 and Class BV
                   Certificates.

Fixed Rate         Class AF-2, Class AF-3, Class AF-4,
  Certificates:    Class AF-5 and Class AF-6 Certificates
                   and the Fixed Rate Subordinate
                   Certificates.

Adjustable Rate    Class AF-1 and Class AV Certificates
  Certificates:    and the Adjustable Rate Subordinate
                   Certificates.

Fixed Rate         Class MF-1, Class MF-2, Class MF-3,
  Subordinate      Class MF-4, Class MF-5, Class MF-6,
  Certificates:    Class MF-7, Class MF-8 and Class BF
                   Certificates.

Adjustable Rate    Class MV-1, Class MV-2, Class MV-3,
  Subordinate      Class MV-4, Class MV-5, Class MV-6,
  Certificates:    Class MV-7, Class MV-8 and Class BV
                   Certificates.

Group 1            Class AF Certificates and the Fixed Rate
  Certificates:    Subordinate Certificates.

Group 2            Class AV Certificates and the Adjustable
  Certificates or  Rate Subordinate Certificates.
Swap
  Certificates:
Offered            Class AF, Class MF-1, Class MF-2,
  Certificates:    Class MF-3, Class MF-4, Class MF-5,
                   Class MF-6, Class AV, Class MV-1,
                   Class MV-2, Class MV-3, Class MV-4,
                   Class MV-5, Class MV-6, Class MV-7
                   and Class A-R Certificates.

RECORD DATE

Adjustable Rate Certificates:

The business day immediately preceding a distribution date, or if the adjustable
rate certificates are no longer book-entry certificates, the last business day
of the month preceding the month of a distribution date.

Class A-R Certificates and Fixed Rate Certificates:

For the first distribution date, the closing date. For any other distribution
date, the last business day of the month preceding the month of a distribution
date.

DENOMINATIONS

$20,000 and multiples of $1,000 in excess thereof, except that the Class A-R
Certificates will be issued as two certificates in the denominations specified
in the pooling and servicing agreement.

REGISTRATION OF CERTIFICATES

Offered Certificates other than the Class A-R Certificates

Book-entry form. Persons acquiring beneficial ownership interests in the offered
certificates (other than the Class A-R Certificates) will hold their beneficial
interests through The Depository Trust Company, in the United States, or
Clearstream, Luxembourg or the Euroclear System, in Europe.

Class A-R Certificates

Fully registered certificated form. The Class A-R Certificates will be subject
to certain restrictions on transfer described in this prospectus supplement and
as more fully provided for in the pooling and servicing agreement.

See "Description of the Certificates -- Book-Entry Certificates" and "--
Restrictions on Transfer of the Class A-R Certificates" in this prospectus
supplement.

DISTRIBUTION DATES

Beginning on February 27, 2006, and thereafter on the 25th day of each calendar
month, or if the 25th is not a business day, the next business day.

INTEREST PAYMENTS

On each distribution date, holders of each class of interest-bearing
certificates will be entitled to receive:

o     the interest that has accrued during the related accrual period at the
      related pass-through rate on the certificate principal balance immediately
      prior to the applicable distribution date, and

o     any interest due on a prior distribution date that was not paid.


                                       S-7



The related accrual period, interest calculation convention and pass-through
rate for each class of interest-bearing certificates is shown in the table on
page S-5.

For each class of subordinate certificates, any interest carry forward amount
(which is interest due on a prior distribution date that was not paid on a prior
distribution date) will be payable from excess cashflow as and to the extent
described in this prospectus supplement. Interest carry forward amounts on the
adjustable rate subordinate certificates also may be paid from amounts in the
swap trust as described on pages S-88 and S-89.

There are certain circumstances that could reduce the amount of interest paid to
you.

See "Description of the Certificates -- Distributions -- Distributions of
Interest" in this prospectus supplement.

PRINCIPAL PAYMENTS

On each distribution date, certificateholders will receive a distribution of
principal on their certificates only if there is cash available on that date for
the payment of principal. The priority of payments will differ, as described in
this prospectus supplement, depending upon whether a distribution date occurs
before the applicable stepdown date, or on or after that date, and will depend
on the loss and delinquency performance of the mortgage loans.

See "Description of the Certificates -- Distributions -- Distributions of
Principal Distribution Amount for Loan Group 1" and "--Distributions of
Principal Distribution Amount for Loan Group 2" in this prospectus supplement.

AMOUNTS AVAILABLE FOR DISTRIBUTIONS ON THE CERTIFICATES

Amounts Available with respect to Interest Distributions

The amount available for interest distributions on the certificates on any
distribution date will be calculated on a loan group by loan group basis and
will generally consist of the following amounts (after the fees and expenses as
described below are subtracted) with respect to the mortgage loans in a loan
group:

o     scheduled payments of interest on the mortgage loans collected during the
      applicable period less the related master servicing fees and special
      servicing fees;

o     interest on prepayments to the extent not allocable to the master servicer
      as additional servicing compensation;

o     interest amounts advanced by the master servicer and any required
      compensating interest paid by the master servicer related to certain
      prepayments on certain mortgage loans;

o     liquidation proceeds on the mortgage loans during the applicable period
      (to the extent allocable to interest); and

o     the amount (if any) of the seller interest shortfall payment paid by
      Countrywide Home Loans, Inc. on any distribution date on or prior to the
      April 2006 distribution date.

Amounts Available with respect to Principal Distributions

The amount available for principal distributions on the certificates on any
distribution date will be calculated on a loan group by loan group basis and
will generally consist of the following amounts (after fees and expenses as
described below are subtracted) with respect to the mortgage loans in a loan
group:

o     scheduled payments of principal of the mortgage loans collected during the
      applicable period or advanced by the master servicer;

o     prepayments collected in the applicable period;

o     the stated principal balance of any mortgage loans repurchased by a seller
      or purchased by the master servicer;

o     the difference, if any, between the stated principal balance of a
      substitute mortgage loan and the related deleted mortgage loan;

o     liquidation proceeds on the mortgage loans during the applicable period
      (to the extent allocable to principal);

o     excess interest (to the extent available) to maintain the targeted
      overcollateralization level for the related class of certificates as
      described under "Description of the Certificates -- Overcollateralization
      Provisions" in this prospectus supplement; and

o     the amount (if any) remaining on deposit in the pre-funding account on the
      distribution date following the end of the funding period.


                                       S-8



Fees and Expenses

The amounts available for distributions on the certificates on any distribution
date generally will not include the following amounts calculated on a loan group
by loan group basis:

o     the master servicing fee, the special servicing fee and additional
      servicing compensation (as described in this prospectus supplement under
      "Description of the Certificates -- Withdrawals from the Collection
      Account" and "--Withdrawals from the Distribution Account") due to the
      master servicer;

o     the portion of the trustee fee due to the trustee;

o     amounts reimbursed to the master servicer and the trustee in respect of
      advances previously made by them and other amounts for which the master
      servicer and servicer are entitled to be reimbursed;

o     all prepayment charges (which are distributable only to the Class PV and
      Class PF Certificates);

o     all other amounts for which the depositor, a seller, the master servicer
      or any NIM Insurer is entitled to be reimbursed; and

o     with respect to loan group 2, any net swap payments or any termination
      payment payable to the swap counterparty (other than a swap termination
      payment resulting from a swap counterparty trigger event).

Any amounts netted from the amount available for distribution to the
certificateholders will reduce the amount distributed to the certificateholders.

SERVICING COMPENSATION

Master Servicing Fee:

The master servicer will be paid a monthly fee (referred to as the master
servicing fee) with respect to each mortgage loan (other than any mortgage loan
that is being specially serviced by the special servicer) equal to one-twelfth
of the stated principal balance of that mortgage loan multiplied by 0.50% per
annum (referred to as the servicing fee rate).

Special Servicing Fee:

The special servicer will be paid a monthly fee (referred to as the special
servicing fee) with respect to each mortgage loan specially serviced by it equal
to one-twelfth of the stated principal balance of that mortgage loan multiplied
by the servicing fee rate).

Additional Servicing Compensation:

The master servicer is also entitled to receive additional servicing
compensation from amounts in respect of interest paid on certain principal
prepayments, late payment fees, assumption fees and other similar charges
(excluding prepayment charges) and investment income earned on amounts on
deposit in the certain of the issuing entity's accounts.

Source and Priority of Payments:

These amounts will be paid to the master servicer and the special servicer from
collections on the mortgage loans prior to any distributions on the
certificates.

See "Servicing of the Mortgage Loans -- Servicing Compensation and Payment of
Expenses," "Description of the Certificates -- Withdrawals from the Certificate
Account" and "-- Withdrawals from the Distribution Account" in this prospectus
supplement.

PRIORITY OF PAYMENTS; DISTRIBUTIONS OF INTEREST

Loan Group 1

In general, on any distribution date, loan group 1 interest funds will be
distributed in the following order:

o     concurrently to each class of Class AF Certificates, current interest and
      interest carry forward amounts, pro rata based on their respective
      entitlements;

o     sequentially, in order of their distribution priorities, to each class of
      fixed rate subordinate certificates, current interest for each class; and

o     as part of the fixed rate loan group excess cashflow.

Loan Group 2

In general, on any distribution date, loan group 2 interest funds will be
distributed in the following order:

o     to the swap account, the amount of any net swap payment and any swap
      termination payment (other than a swap termination payment due to a swap
      counterparty trigger event) payable to the swap counterparty;

o     concurrently, to each class of Class AV Certificates, current interest and
      interest carry forward amounts, pro rata based on their respective
      entitlements;


                                       S-9



o     sequentially, in order of their distribution priorities, to each class of
      adjustable rate subordinate certificates, current interest for each class;
      and

o     as part of the adjustable rate loan group excess cashflow.

PRIORITY OF PAYMENTS; DISTRIBUTIONS OF PRINCIPAL

General

The manner of distributing principal among the classes of certificates in any
certificate group will differ, as described in this prospectus supplement,
depending upon whether a distribution date occurs before the related stepdown
date, or on or after that date, and depending on whether a trigger event is in
effect for that certificate group.

Effect of the Stepdown Date if a Trigger Event is not in Effect

On any distribution date on or after the related stepdown date (and so long as
no trigger event for the applicable certificate group is in effect), instead of
allocating all amounts distributable as principal on the certificates to the
related senior classes of certificates for the loan group until those senior
classes are paid in full, a portion of those amounts distributable as principal
will be allocated to the related subordinate certificates.

The amount allocated to each class of certificates in a certificate group on or
after the related stepdown date and so long as no trigger event is in effect for
that certificate group will be based on the targeted level of
overcollateralization and subordination for each class of certificates in that
certificate group. These amounts are described in more detail under "Description
of the Certificates -- Distributions -- Distributions of Principal Distribution
Amount for Loan Group 1" and "-- Distributions of Principal Distribution Amount
for Loan Group 2" in this prospectus supplement.

Trigger Events:

A "trigger event" refers to certain specified levels of losses and/or
delinquencies on the mortgage loans. Prior to the applicable stepdown date or if
a trigger event is in effect with respect to a loan group on or after the
applicable stepdown date, all amounts distributable as principal with respect to
that loan group on a distribution date will be allocated first to the related
senior certificates, until the related senior certificate are paid in full,
before any distributions of principal are made on the related subordinate
certificates.

The Stepdown Date:

The stepdown date for a certificate group will be the earlier of:

o     the date on which the aggregate certificate principal balance of the Class
      AF Certificates (in the case of the group 1 certificates) or the Class AV
      Certificates (in the case of the group 2 certificates) is reduced to zero;
      and

o     the later of:

      o     the February 2009 distribution date; and

      o     the date on which the targeted overcollateralization level related
            to loan group 1 (in the case of the group 1 certificates) or the
            targeted overcollateralization level related to loan group 2 (in the
            case of the group 2 certificates) is reached.

Certificate or Loan Group Specific Events that Affect Allocations of Principal

Loan Group 1:

On any distribution date prior to the fixed rate stepdown date or on which a
fixed rate trigger event is in effect, the loan group 1 principal distribution
amount will be distributed in the following order:

o     to the Class AF Certificates in the priority described below, until the
      certificate principal balances thereof are reduced to zero;

o     sequentially, in order of their distribution priorities, to each class of
      fixed rate subordinate certificates, until the certificate principal
      balance of each class is reduced to zero; and

o     as part of the fixed rate loan group excess cashflow.

On any distribution date on or after the fixed rate stepdown date and so long as
no fixed rate trigger event is in effect, the loan group 1 principal
distribution amount will be distributed in the following order:

o     to the Class AF Certificates, up to the Class AF principal distribution
      amount and in the priority described below, until the certificate
      principal balance of each class is reduced to zero;


                                      S-10



o     sequentially, in order of their distribution priorities, to each class of
      fixed rate subordinate certificates, the fixed rate subordinate class
      principal distribution amount for that class, until the certificate
      principal balance thereof is reduced to zero; and

o     as part of the fixed rate loan group excess cashflow.

Class AF Certificates:

For each distribution date, amounts to be distributed to the Class AF
Certificates in respect of principal will be distributed in the following order:

      (i) to the Class AF-6 Certificates, the NAS principal distribution amount,
until the certificate principal balance thereof is reduced to zero;

      (ii) sequentially, to the Class AF-1, Class AF-2, Class AF-3, Class AF-4
and Class AF-5 Certificates, in that order, in each case until the certificate
principal balance thereof is reduced to zero;

      (iii) to the Class AF-6 Certificates without regard to the NAS principal
distribution amount, until the certificate principal balance thereof is reduced
to zero.

Class AF-6 Certificates; NAS Principal Distribution Amount:

The Class AF-6 Certificates are entitled to receive the NAS principal
distribution amount prior to payments of principal of the other classes of Class
AF Certificates. However, until the distribution date in February 2009, the NAS
principal distribution amount is zero and it is expected that the AF-6
Certificates will not receive any distributions of principal. The NAS principal
distribution amount is a specified percentage (that may exceed 100%) of the
Class AF-6 pro rata share of the principal distributable to the Class AF
Certificates. The specified percentage increases on the distribution date in
February 2011, February 2012 and February 2013, when it ultimately reaches 300%.
On and after the distribution date in February 2009 and until the February 2012
distribution date, it is expected that the Class AF-6 Certificates will receive
a portion of principal payments that is smaller than its pro rata share of
principal payments and on or after February 2013 distribution date, the Class
AF-6 Certificates will receive an amount greater than its pro rata share of
principal payments.

Loan Group 2:

On any distribution date prior to the adjustable rate stepdown date or on which
an adjustable rate trigger event is in effect, the loan group 2 principal
distribution amount will be distributed in the following order:

o     to the Class AV Certificates in the priority described below, until the
      certificate principal balances thereof are reduced to zero;

o     sequentially, in order of their distribution priorities, to each class of
      adjustable rate subordinate certificates, until the certificate principal
      balance of each class is reduced to zero; and

o     as part of the adjustable rate loan group excess cashflow.

On any distribution date on or after the adjustable rate stepdown date and so
long as no adjustable rate trigger event is in effect, the loan group 2
principal distribution amount will be distributed in the following order:

o     to the Class AV Certificates, up to the Class AV principal distribution
      amount and in the priority described below, until the certificate
      principal balance of each class is reduced to zero;

o     sequentially, in order of their distribution priorities, to each class of
      adjustable rate subordinate certificates, the adjustable rate subordinate
      class principal distribution amount for that class, until the certificate
      principal balance thereof is reduced to zero; and

o     as part of the adjustable rate loan group excess cashflow.

Class AV Certificates:

For each distribution date, amounts to be distributed to the Class AV
Certificates in respect of principal will be distributed sequentially to the
Class AV-1, Class AV-2 and Class AV-3 Certificates, in that order, in each case
until the certificate principal balance thereof is reduced to zero.

EXCESS CASHFLOW

Excess cashflow generally refers to the remaining amounts (if any) available for
distribution to the certificates after interest and principal distributions have
been made.


                                      S-11



Generally, excess cashflow from loan group 1 will be allocated to the Class AF
Certificates and the fixed rate subordinate certificates and excess cashflow
from loan group 2 will be allocated to the Class AV Certificates and the
adjustable rate subordinate certificates. However, if there is excess cashflow
remaining these distributions on the related classes of certificates, a portion
of the excess cashflow may be allocated to an unrelated class of certificates as
described in this prospectus supplement under "Description of the Certificates
-- Overcollateralization Provisions."

Loan Group 1

On any distribution date, the loan group 1 excess cashflow (if any) (referred to
as fixed rate excess cashflow) will be distributed in the following order:

o     to each class of Class AF Certificates and fixed rate subordinate
      certificates, in the same priority as described above with respect to
      payments of principal, the amount necessary to meet the target
      overcollateralization level with respect to loan group 1 (referred to as
      the fixed rate overcollateralization target amount);

o     concurrently, to each class of Class AF Certificates, any unpaid realized
      loss amount for each such class, pro rata based on their respective
      entitlements;

o     to the fixed rate subordinate certificates sequentially, in order of their
      distribution priorities, in each case, first, any interest carry forward
      amount and second, any unpaid realized loss amount for each such class, in
      that order;

o     to each class of Class AF Certificates and fixed rate subordinate
      certificates (in the case of the Class AF-1 Certificates, after payments
      of amounts available (if any) under the corridor contract), pro rata, to
      the extent needed to pay any unpaid net rate carryover for the Class AF
      Certificates and fixed rate subordinate certificates;

o     to each class of Class AV Certificates and adjustable rate subordinate
      certificates, in the same priority as described above with respect to
      payments of principal, the amount necessary to meet the target
      overcollateralization level with respect to loan group 2 (referred to as
      the adjustable rate overcollateralization target amount), to the extent
      not paid from adjustable rate excess cashflow or amounts allocated to the
      issuing entity in respect of the interest rate swap contract;

o     concurrently, to each class of Class AV Certificates, any unpaid realized
      loss amount for each class, to the extent not paid from adjustable rate
      excess cashflow or amounts allocated to the issuing entity in respect of
      the interest rate swap contract, pro rata based on their respective
      entitlements;

o     to the adjustable rate subordinate certificates sequentially, in order of
      their distribution priorities, any unpaid realized loss amount for each
      such class, to the extent not paid from adjustable rate excess cashflow or
      amounts allocated to the issuing entity in respect of the interest rate
      swap contract;

o     to the carryover reserve fund, the required carryover reserve fund
      deposit; and

o     to the Class CF and Class A-R Certificates, as specified in the pooling
      and servicing agreement.

Loan Group 2

On any distribution date, the loan group 2 excess cashflow (if any) (referred to
as adjustable rate excess cashflow) will be distributed in the following order:

o     to each class of Class AV Certificates and adjustable rate subordinate
      certificates, in the same priority as described above with respect to
      payments of principal, the amount necessary to meet the adjustable rate
      overcollateralization target amount;

o     concurrently, to each class of Class AV Certificates, any unpaid realized
      loss amount for each such class, pro rata based on their respective
      entitlements;

o     to the adjustable rate subordinate certificates sequentially, in order of
      their distribution priorities, in each case, first, any interest carry
      forward amount and second, any unpaid realized loss amount for each such
      class, in that order;

o     to each class of Class AV Certificates and adjustable rate subordinate
      certificates, pro rata, to the extent needed to pay any unpaid net rate
      carryover for the Class AV Certificates and adjustable rate subordinate
      certificates;

o     if the fixed rate overcollateralization target amount has been previously
      met, to each class of


                                      S-12



      Class AF Certificates and fixed rate subordinate certificates, in the same
      priority as described above with respect to payments of principal, the
      amount necessary to meet the fixed rate overcollateralization target
      amount to the extent not paid from fixed rate excess cashflow;

o     concurrently, to each class of Class AF Certificates, any unpaid realized
      loss amount for each such class, to the extent not paid from adjustable
      rate excess cashflow, pro rata based on their respective entitlements;

o     to the fixed rate subordinate certificates sequentially, in order of their
      distribution priorities, any unpaid realized loss amount for each such
      class to the extent not paid from fixed rate excess cashflow;

o     to the carryover reserve fund, the required carryover reserve fund
      deposit;

o     to the swap account, the amount of any swap termination payment payable to
      the swap counterparty as a result of a swap counterparty trigger event;
      and

o     to the Class CV and Class A-R Certificates, as specified in the pooling
      and servicing agreement.

See "Description of the Certificates -- Overcollateralization Provisions" in
this prospectus supplement.

CREDIT ENHANCEMENT

Credit enhancement provides limited protection to holders of certain
certificates against shortfalls in payments received on the mortgage loans. This
transaction employs the following forms of credit enhancement:

Overcollateralization

"Overcollateralization" refers to the amount by which the aggregate stated
principal balance of the mortgage loans in a loan group and any remaining
related pre-funded amount, exceeds the aggregate certificate principal balance
of the related classes of certificates.

On the closing date, it is expected that:

o     the sum of the aggregate stated principal balance of the group 1 mortgage
      loans and any amounts on deposit in the pre-funding account in respect of
      loan group 1 will exceed the initial aggregate certificate principal
      balance of the Class AF Certificates and the fixed rate subordinate
      certificates by approximately $11,271,000; and

o     the sum of the aggregate stated principal balance of the group 2 mortgage
      loans and any amounts on deposit in the pre-funding account in respect of
      loan group 2 will exceed the initial aggregate certificate principal
      balance of the Class AV Certificates and the adjustable rate subordinate
      certificates by approximately $8,950,000.

In the case of loan group 1, the amount of overcollateralization is less than
the initial level of overcollateralization required by the pooling and servicing
agreement. In the case of loan group 2, the amount of overcollateralization is
equal to the initial level of overcollateralization required by the pooling and
servicing agreement.

The mortgage loans in each loan group are expected to generate more interest
than is needed to pay interest on the related certificates because the weighted
average interest rate of those mortgage loans is expected to be higher than the
weighted average pass-through rate on the related certificates, plus the
weighted average expense fee rate, and in the case of loan group 2, the
effective rate at which any net swap payments may be payable to the swap
counterparty. The "expense fee rate" is the sum of the servicing fee rate, the
trustee fee rate and, with respect to any mortgage loan covered by a lender paid
mortgage insurance policy, the related mortgage insurance premium rate. Any
interest payments received in respect of the mortgage loans in a loan group in
excess of the amount that is needed to pay interest on the related certificates
and the issuing entity's expenses will be used to reduce the total certificate
principal balance of the related certificates, until the required level of
overcollateralization has been achieved (in the case of loan group 1) or, if the
required level of overcollateralization has been achieved, to restore or
maintain the required level of overcollateralization.

On any distribution date, the amount of overcollateralization (if any) for each
loan group will be available to absorb the losses from liquidated mortgage loans
that would otherwise be allocated to the related certificates, if those losses
are not otherwise covered by excess cashflow (if any) from the related mortgage
loans. The required levels of overcollateralization may change over time.

See "Description of the Certificates--Overcollateralization Provisions" in this
prospectus supplement.


                                      S-13



Subordination

The issuance of senior certificates and subordinate certificates by the issuing
entity is designed to increase the likelihood that senior certificateholders
will receive regular payments of interest and principal.

The Class AF Certificates will have a distribution priority over the fixed rate
subordinate certificates. The Class AV Certificates will have a distribution
priority over the adjustable rate subordinate certificates. With respect to the
fixed rate subordinate certificates, the Class MF Certificates with a lower
numerical designation will have a distribution priority over Class MF
Certificates with a higher numerical designation, and all the Class MF
Certificates will have a distribution priority over the Class BF Certificates.
With respect to the adjustable rate subordinate certificates, the Class MV
Certificates with a lower numerical designation will have a distribution
priority over Class MV Certificates with a higher numerical designation and all
the Class MV Certificates will have a distribution priority over the Class BV
Certificates.

Subordination is designed to provide the holders of certificates having a higher
distribution priority with protection against losses realized when the remaining
unpaid principal balance of a mortgage loan exceeds the proceeds recovered upon
the liquidation of that mortgage loan. In general, this loss protection is
accomplished by allocating realized losses among the subordinate certificates
related to the loan group, beginning with the related subordinate certificates
with the lowest distribution priority.

Excess cashflow from a loan group will be available to maintain or restore the
overcollateralization for the other loan group and, to pay unpaid realized loss
amounts to the certificates related to the other loan group. However, realized
losses on the mortgage loans in a loan group will be allocated solely to the
classes of certificates related to that loan group.

ALLOCATION OF LOSSES

After the credit enhancement provided by excess cashflow and
overcollateralization (if any) have been exhausted, collections otherwise
payable to related subordinate classes will comprise the sole source of funds
from which credit enhancement is provided to the related senior certificates.
Realized losses of a particular loan group are allocated to the related
subordinate certificates, beginning with the related subordinate certificates
with the lowest distribution priority, until the certificate principal balance
of that subordinate class has been reduced to zero. If the aggregate certificate
principal balance of the related subordinate certificates were to be reduced to
zero, additional realized losses of a particular loan group will be allocated to
the related senior certificates as described in this prospectus supplement under
"Description of the Certificates--Applied Realized Loss Amounts."

THE CORRIDOR CONTRACT

Countrywide Home Loans, Inc. has entered into an interest rate corridor
contract, which will be assigned to The Bank of New York, in its capacity as
corridor contract administrator, on the closing date. On or prior to the
corridor contract termination date, the corridor contract counterparty will be
required to make monthly payments to the corridor contract administrator, if
one-month LIBOR for the related payment date moves above a specified rate,
subject to a maximum rate of payment. Payments made under the corridor contract
will be made to the corridor contract administrator and allocated between the
issuing entity and Countrywide Home Loans, Inc. as described in "Description of
the Certificates -- The Corridor Contract" in this prospectus supplement.

The amounts allocated to the issuing entity in respect of the corridor contract
will be available on the Class AF-1 Certificates to cover net rate carryover
resulting from the application of the applicable net rate cap to the related
pass-through rate.

Any amounts received in respect of the corridor contract and allocated to the
issuing entity for a distribution date that are not used on that date to cover
net rate carryover on the Class AF-1 Certificates are expected to be distributed
to the holders of the Class CF Certificates as provided in the pooling and
servicing agreement and will not be available thereafter for payment of net rate
carryover on any class of certificates.

See "Description of the Certificates -- The Corridor Contract" in this
prospectus supplement.

THE SWAP CONTRACT

Countrywide Home Loans, Inc. has entered into an interest rate swap contract,
which will be assigned to The Bank of New York, in its capacity as swap contract
administrator, on the closing date. On each distribution date prior to the swap
contract termination date, the swap contract administrator will be obligated to
pay to the swap counterparty an amount equal to the product of (i) 4.72% per
annum, (ii) the lesser of (a) the swap contract notional balance for that
distribution date and (b) the


                                      S-14



aggregate certificate principal balance of the swap certificates immediately
prior to that distribution date, and (iii) the number of days in the related
calculation period (calculated on the basis of a 360-day year of twelve 30-day
months), divided by 360. In addition, on the business day preceding each
distribution date prior to the swap contract termination date, the swap
counterparty will be obligated to pay to the swap contract administrator an
amount equal to the product of (i) one-month LIBOR (as determined by the swap
counterparty), (ii) the lesser of (a) the swap contract notional balance for
that distribution date and (b) the aggregate certificate principal balance of
the swap certificates immediately prior to that distribution date, and (iii) the
actual number of days in the related calculation period, divided by 360.

To the extent that the payment payable by the swap contract administrator
exceeds the payment payable by the swap counterparty, the trustee will be
required to deduct from the available funds for loan group 2 the amount of that
excess and, in its capacity as trustee of the swap trust, to remit the amount of
that excess to the swap contract administrator for payment to the swap
counterparty. To the extent that the payment payable by the swap counterparty
exceeds the payment payable by the swap contract administrator, the swap
counterparty will be required to pay to the swap contract administrator the
amount of that excess. Any net payment received by the swap contract
administrator from the swap counterparty will be remitted to the swap trust only
to the extent necessary to cover unpaid current interest, net rate carryover and
unpaid realized loss amounts on the swap certificates and to maintain or restore
overcollateralization for those certificates. The remaining portion of any net
payment received by the swap contract administrator from the swap counterparty
will be paid to Countrywide Home Loans, Inc. and will not be available to cover
any amounts on any class of certificates.

See "Description of the Certificates -- The Swap Contract" in this prospectus
supplement.

ADVANCES

The master servicer will make cash advances with respect to delinquent payments
of principal and interest on the mortgage loans to the extent that the master
servicer reasonably believes that the cash advances can be repaid from future
payments on the related mortgage loans. These cash advances are only intended to
maintain a regular flow of scheduled interest and principal payments on the
certificates and are not intended to guarantee or insure against losses.

See "Servicing of the Mortgage Loans -- Advances" in this prospectus supplement.

REPURCHASE, SUBSTITUTION AND PURCHASE OF MORTGAGE LOANS

The sellers may be required to repurchase, or substitute, a replacement mortgage
loan for any mortgage loan as to which there exists deficient documentation or
as to which there has been an uncured breach of any representation or warranty
relating to the characteristics of the mortgage loans that materially and
adversely affects the interests of the certificateholders in that mortgage loan.

Additionally, the master servicer may purchase from the issuing entity any
mortgage loan that is delinquent in payment by 150 days or more.

Countrywide Home Loans, Inc. also will be obligated to purchase any mortgage
loan with respect to which it has modified the mortgage rate at the request of
the borrower. See "Servicing of Mortgage Loans - Certain Modifications and
Refinancings" in this prospectus supplement.

The purchase price for any mortgage loans repurchased or purchased by a seller
or the master servicer will be generally equal to the stated principal balance
of the mortgage loan plus interest accrued at the applicable mortgage rate (and
in the case of purchases by the master servicer, less the servicing fee rate).

See "The Mortgage Pool -- Assignment of the Mortgage Loans" and "Description of
the Certificates -- Optional Purchase of Defaulted Loans" in this prospectus
supplement and "Loan Program -- Representations by Sellers; Repurchases" in the
prospectus.

OPTIONAL TERMINATION

The master servicer may purchase all of the remaining assets of the issuing
entity on any distribution date on or after the first distribution date on which
the aggregate stated principal balance of the mortgage loans and any foreclosed
real estate owned by the issuing entity declines to or below 10% of the sum of
the aggregate stated principal balance of the initial mortgage loans as of the
initial cut-off date and the amount, if any, deposited into the pre-funding
account on the closing date. If the master servicer exercises the optional
termination right it will result in the early retirement of the certificates.
The NIM Insurer may also have the right to purchase all of the remaining assets
in the issuing entity.


                                      S-15



See "Description of the Certificates -- Optional Termination" in this prospectus
supplement.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

For federal income tax purposes, the issuing entity (exclusive of the assets
held in the carryover reserve fund and the pre-funding account and the issuing
entity's rights with respect to payments received under the corridor contract)
will consist of two or more REMICs: one or more underlying REMICs and the master
REMIC. The assets of the lowest underlying REMIC in this tiered structure will
consist of the mortgage loans and any other assets designated in the pooling and
servicing agreement. The offered certificates (other than the Class A-R
Certificates) will represent beneficial ownership of "regular interests" in the
master REMIC identified in the pooling and servicing agreement and a beneficial
interest in the right to receive payments of net rate carryover pursuant to the
pooling and servicing agreement.

The Class A-R Certificates will represent ownership of both the residual
interest in the master REMIC and the residual interests in any underlying
REMICs.

The swap trust, the swap contract and the swap account will not constitute any
part of any REMIC created under the pooling and servicing agreement.

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

LEGAL INVESTMENT CONSIDERATIONS

The Class AF and Class AV Certificates and the Class MF-1, Class MF-2, Class
MF-3, Class MF-4, Class MV-1, Class MV-2, Class MV-3 and Class MV-4 Certificates
will be "mortgage related securities" for purposes of the Secondary Mortgage
Market Enhancement Act of 1984. None of the other classes of offered
certificates will be "mortgage related securities" for purposes of the Secondary
Mortgage Market Enhancement Act of 1984.

See "Legal Investment" in the prospectus.

ERISA CONSIDERATIONS

The offered certificates (other than the Class A-R Certificates) may be
purchased by a pension or other benefit plan subject to the Employee Retirement
Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue
Code of 1986, as amended, or by an entity investing the assets of a benefit
plan, so long as certain conditions are met. Investors acquiring swap
certificates with assets of such a plan will be required to make certain
representations.

See "ERISA Considerations" in this prospectus supplement and in the prospectus.


                                      S-16



                         SUMMARY OF TRANSACTION PARTIES




                                       ----------------------------------
                                                SPONSOR AND SELLER
                                           Countrywide Home Loans, Inc. <---------
                                                                                  \
                                       ----------------------------------          \
                                       /              |         ^                   \
                   Mortgage Loans     /               |         |                    \
                                     /                |         |                     \               -----------------------
                                    /                 |         | Excess Corridor      \                 SWAP COUNTERPARTY
                                   /                  |         | Contract Payments     \              Bear Stearns Financial
                                  /                   |         |                        \               Products Inc.
                                 /                    |   ----------------------          \
                                /                     |      CORRIDOR CONTRACT             \          -----------------------
                               /                      |        ADMINISTRATOR                \                     ^
                              /                       |     The Bank of New York             \                    |  Net Swap
                             /        Mortgage Loans  |                                       \                   |  Payments
                            /                         |  -----------------------               \                  v
                           /                          |         |      ^                        \     -----------------------
                          /                           |         |      |                         \         SWAP CONTRACT
                         /  Mortgage                  |         |      |     Corridor Contract    \        ADMINISTRATOR
                        v   Loans                     v         |      |     Payments              \    The Bank of New York
--------------------------                 ---------------      |      |                            \
     OTHER SELLERS                            DEPOSITOR         |   ---------------------------      \-----------------------
Special Purpose Entities   -------------->    CWABS, Inc.       |       CORRIDOR CONTRACT             \           ^
                                                                |         COUNTERPARTY                 \          |
--------------------------                 ---------------      |    Bear Stearns Financial             \         |
                                                      |         |        Products Inc.                   \        |
                                                      |         |                                         \       |  Net Swap
                                                      |         |   ---------------------------            \      |  Payments
                                                      |         |                                           \     |
                                      Mortgage Loans  |         |  Net Corridor                              \    |
                                                      |         |  Contract Payments                          \   |
                                                      |         |                                              \  |
--------------------------  Mortgage                  v         v                                               \ v
MASTER SERVICER AND         Loan                --------------------------             Net Swap             ---------------
      SERVICER              Servicing                 ISSUING ENTITY                   Payments                SWAP TRUST
  Countrywide Home         ------------------>      CWABS Asset-Backed      ------------------------- >
 Loans Servicing LP                                 Certificates Trust                                      ---------------
                                                          2006-1                                                  |
--------------------------                                          -----------------------------                 |
        ^                                                 TRUSTEE                                 \               |  Swap
        |                                          The Bank of New York                            \              |  Distributions
        |                                                                                           \             |
        |                                       --------------------------                           \            |
        |                                                                                             v           v
-----------------------                                                            Distributions       -----------------------
SPECIAL SUB-SERVICER                                                                                      CERTIFICATEHOLDERS
Litton Loan Servicing
         LP                                                                                            -----------------------

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



                                      S-17



                                  RISK FACTORS

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



THE CERTIFICATES ARE BACKED BY
MORTGAGE LOANS THAT WILL
EXPERIENCE HIGHER RATES OF
DELINQUENCY AND LOSS THAN
MORTGAGE LOANS UNDERWRITTEN TO
MORE TRADITIONAL STANDARDS ...     Countrywide Home Loans, Inc.'s credit blemished mortgage loan underwriting standards
                                   are more flexible than the standards generally used by banks for borrowers with
                                   non-blemished credit histories with regard to the borrower's credit standing and
                                   repayment ability. Borrowers who qualify generally have impaired credit histories,
                                   which may include a record of major derogatory credit items such as outstanding
                                   judgments or prior bankruptcies. On a case by case basis, Countrywide Home Loans,
                                   Inc. may determine that, based upon compensating factors, a prospective borrower not
                                   strictly qualifying under its applicable underwriting risk category guidelines
                                   warrants an underwriting exception. It is expected that a significant number of the
                                   mortgage loans will have been originated based on underwriting exceptions of these
                                   types. As a result of Countrywide Home Loans, Inc.'s underwriting standards,
                                   including the origination of mortgage loans based on underwriting exceptions, the
                                   mortgage loans in the mortgage pool are likely to experience rates of delinquency,
                                   foreclosure and bankruptcy that are higher, and that may be substantially higher,
                                   than those experienced by mortgage loans underwritten in a more traditional manner.

HIGH OR INCREASING
LOAN-TO-VALUE RATIO MAY IMPACT
MORTGAGE LOAN LOSS AND
DELINQUENCY RATES MORE THAN
LOANS ORIGINATED UNDER MORE
TRADITIONAL STANDARDS ........     Countrywide Home Loans, Inc.'s underwriting standards do not prohibit a borrower from
                                   obtaining, at the time of origination of the originator's first lien mortgage loan,
                                   additional financing which is subordinate to that first lien mortgage loan. This
                                   subordinate financing is not reflected in the loan-to-value ratio set forth in this
                                   prospectus supplement. High-loan-to-value ratios may make it more difficult for a
                                   borrower to make payments under the related mortgage loans. Additionally, values of
                                   mortgaged properties may decrease from the time that the mortgage loan is originated,
                                   resulting in a higher loan to value ratio. A decrease in value of the mortgaged
                                   property may limit the borrower's ability to refinance the mortgage loan which in
                                   turn, may lead to a default on the mortgage loan. Additionally, in either case, the
                                   high loan-to-value ratio may have a greater effect on the delinquency, foreclosure,
                                   bankruptcy and loss experience of the mortgage loans in the mortgage pool than on
                                   mortgage loans originated in a more traditional manner. We cannot assure you that the
                                   values of the related mortgaged properties have remained or will remain at the levels
                                   in effect on the dates of origination of the related mortgage loans.



                                      S-18





SUBORDINATE CERTIFICATES HAVE
A GREATER RISK OF LOSS BECAUSE
OF THE SUBORDINATION FEATURES;
CREDIT ENHANCEMENT MAY NOT BE
SUFFICIENT TO PROTECT SENIOR
CERTIFICATES FROM LOSSES .....     When certain classes of certificates provide credit enhancement for other classes of
                                   certificates this is sometimes referred to as "subordination." The subordination
                                   feature is intended to enhance the likelihood that senior certificateholders will
                                   receive regular payments of interest and principal. For purposes of this prospectus
                                   supplement, "related subordinate classes" means:

                                   o   with respect to the Class AF Certificates, the fixed rate subordinate
                                       certificates,

                                   o   with respect to the Class AV Certificates, the adjustable rate subordinate
                                       certificates,

                                   o   with respect to each class of Certificates having an "MF" designation, (i) each
                                       other class of Certificates having an "MF" designation and a higher numerical
                                       designation than the class, if any, and (ii) the Class BF Certificates, and

                                   o   with respect to each class of Certificates having an "MV" designation, (i) each
                                       other class of Certificates having an "MV" designation and a higher numerical
                                       designation than the class, if any, and (ii) the Class BV Certificates.

                                   Credit enhancement in the form of subordination will be provided for the
                                   certificates, by:

                                   o   the right of the holders of the senior certificates to receive certain
                                       distributions prior to the related subordinate classes; and

                                   o   the allocation of realized losses on the mortgage loans in a loan group to the
                                       related subordinate classes, beginning with the Class BF (in the case of loan
                                       group 1) and Class BV Certificates (in the case of loan group 2).

                                   This type of credit enhancement is provided by:

                                   o   using collections on the mortgage loans in a loan group otherwise payable to the
                                       holders of the related subordinate classes to pay amounts due on the more senior
                                       related classes; and

                                   o   allocating realized losses of a particular loan group to the related subordinate
                                       certificates, beginning with the related subordinate certificates with the lowest
                                       distribution priority, until the certificate principal balance of that
                                       subordinate class has been reduced to zero.

                                   This means that after the credit enhancement provided by excess cashflow and
                                   overcollateralization (if any) have been exhausted,



                                      S-19





                                   o   collections otherwise payable to the related subordinate classes will comprise
                                       the sole source of funds from which credit enhancement is provided to the related
                                       senior certificates; and

                                   o   realized losses on the mortgage loans of a particular loan group will be
                                       allocated to the most junior class of related subordinate certificates
                                       outstanding, until the respective certificate principal balance of that class of
                                       subordinate certificates has been reduced to zero.

                                   If the aggregate certificate principal balance of the subordinate certificates
                                   related to a loan group were to be reduced to zero, additional realized losses of a
                                   particular loan group will be allocated to the related senior certificates as
                                   described in this prospectus supplement under "Description of the
                                   Certificates--Applied Realized Loss Amounts."

                                   You should fully consider the risks of investing in a subordinate certificate,
                                   including the risk that you may not fully recover your initial investment as a result
                                   of realized losses. In addition, investors in a class of senior certificates should
                                   consider the risk that, after the credit enhancement provided by related excess
                                   cashflow and overcollateralization (if any) have been exhausted, the subordination of
                                   the related classes of subordinated certificates may not be sufficient to protect
                                   that class of senior certificates from losses.

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

SPECIAL SERVICING AGREEMENT
MAY AFFECT THE PERFORMANCE OF
THE CERTIFICATES .............     Servicing of mortgage loans sixty or more days delinquent will be transferred to the
                                   special servicer, which is an affiliate of the entity that is expected to own the net
                                   interest margin securities secured by all or a portion of the Class CF and Class CV
                                   Certificates. Once a mortgage loan is transferred to the special servicer for special
                                   servicing, that mortgage loan will continue to be serviced by the special servicer
                                   even if it is returned to performing status. The special servicer is likely to pursue
                                   loss mitigation approaches that differ from those typically used by the master
                                   servicer. Within the procedures prescribed by the pooling and servicing agreement,
                                   the servicing by the special servicer may accelerate or delay the timing of
                                   liquidations relative to other securitizations of the depositor that don't include a
                                   special servicer. The timing of liquidations may affect the yields on the
                                   certificates, particularly the subordinate certificates related to any specially
                                   serviced mortgage loans.

OVERCOLLATERALIZATION AND
EXCESS INTEREST MAY NOT BE
SUFFICIENT TO PROTECT
CERTIFICATES FROM LOSSES ON
THE MORTGAGE LOANS ...........     The amount by which the sum of the aggregate stated principal balance of the mortgage
                                   loans in a loan group and the amount on deposit in the pre-funding account in respect
                                   of the related loan group exceeds the aggregate certificate principal balance of the
                                   related classes of certificates is called "overcollateralization." The mortgage loans
                                   in a loan group are expected to generate more interest than is needed to pay interest
                                   on the related certificates because the weighted average interest rate on those
                                   mortgage loans is expected to be higher than the weighted average pass-through rate
                                   on these certificates plus the expense fee rate. This "excess interest" from a loan
                                   group will be used to make additional principal payments on the



                                      S-20





                                   related certificates to the extent described in this prospectus supplement.
                                   Overcollateralization is intended to provide limited protection to certificateholders
                                   by absorbing losses from liquidated mortgage loans in the related loan group.
                                   However, we cannot assure you that enough excess interest will be generated on the
                                   mortgage loans to create, maintain or restore the required levels of
                                   overcollateralization.

                                   The excess interest available on any distribution date will be affected by the actual
                                   amount of interest received, collected or advanced in respect of the mortgage loans
                                   during the preceding month. The amount of interest received, collected or advanced
                                   will be influenced by changes in the weighted average of the mortgage rates resulting
                                   from prepayments and liquidations of the mortgage loans as well as from adjustments
                                   of the mortgage rates on adjustable rate mortgage loans. Because the amount of excess
                                   interest available may vary and because the pass-through rates on the adjustable-rate
                                   certificates may increase, it may be necessary to apply all or a portion of the
                                   available interest to cover the interest requirements. As a result, available excess
                                   interest may be reduced. Furthermore, a disproportionately high rate of prepayments
                                   of high interest rate mortgage loans would have a negative effect on future excess
                                   interest.

DIFFERENCE BETWEEN MORTGAGE
RATES AND ADJUSTABLE
CERTIFICATE PASS-THROUGH MAY
REDUCE EXCESS INTEREST .......     The pass-through rates on the adjustable rate certificates may adjust monthly and are
                                   generally based on one-month LIBOR. The mortgage rates on the mortgage loans either
                                   are fixed or adjust semi-annually based on six-month LIBOR, which is referred to as a
                                   mortgage index, but in most cases only after a period of two or three years after
                                   origination. Because the mortgage index may respond to various economic and market
                                   factors different than those affecting one-month LIBOR, there is not necessarily a
                                   correlation in movement between the interest rates on those mortgage loans and the
                                   pass-through rates of the adjustable rate certificates. For example, it is possible
                                   that the interest rates on certain of the adjustable rate mortgage loans may decline
                                   while the pass-through rates on the adjustable rate certificates are stable or
                                   rising. In addition, although it is possible that both the mortgage rates and
                                   certificate pass-through rates may decline or increase during the same period,
                                   mortgage rates may decline or increase more slowly than the certificate pass-through
                                   rates because of the difference between interest rate adjustment periods and
                                   pass-through rate adjustment periods. An increase in the interest rates on certain of
                                   the adjustable rate mortgage loans while the pass-through rates on the adjustable
                                   rate certificates are stable or rising, could result in less amounts being available
                                   as excess interest.

NET RATE CAP PUTS A LIMIT ON
THE PASS-THROUGH RATES OF THE
CERTIFICATES .................     The absence of a correlation between movement in the mortgage rates and the
                                   certificate pass-through rates may reduce the interest payable on the related
                                   interest-bearing certificates because of the imposition of a pass-through rate cap
                                   called the "net rate cap." In addition, prepayments of mortgage loans in a loan group
                                   with relatively higher mortgage rates may reduce the applicable net rate cap and
                                   consequently reduce the pass-through rate for one or more related classes of
                                   interest-bearing certificates. We intend that the amount by which a
                                   certificateholder's interest payment has been reduced by operation of the applicable
                                   net rate cap be paid from



                                      S-21





                                   remaining excess cashflow (if any) as described in this prospectus supplement. In
                                   addition, prior to the corridor contract termination date, the Class AF-1
                                   Certificates will also be entitled to receive the amount of the reduction in interest
                                   resulting from the operation of the applicable net rate cap from payments (if any)
                                   allocated to the issuing entity in respect of the interest rate corridor contract, as
                                   described in this prospectus supplement. However, we cannot assure you that any these
                                   funds will be available, or sufficient, to make any payments with respect to these
                                   reductions. The swap certificates also may recover this interest reduction amount
                                   from net swap payments to the extent that those payments are available for that
                                   purpose.

                                   Payments from the corridor contract are dependent solely upon the performance of the
                                   corridor contract counterparty. Thus, payments of these amounts involve counterparty
                                   risk. The ratings assigned to the Class AF-1 Certificates do not take into account
                                   any payments received from the corridor contract or the payment of net rate
                                   carryover.

CONSIDERATIONS REGARDING THE
SWAP CONTRACT ................     Any amounts received by the swap contract administrator from the swap counterparty
                                   under the swap contract and allocated to the swap trust will be applied as described
                                   in this prospectus supplement to pay unpaid interest and net rate carryover, maintain
                                   or restore overcollateralization and pay unpaid realized loss amounts, in each case
                                   with respect to the swap certificates. However, no amounts will be payable by the
                                   swap counterparty unless the floating payment owed by the swap counterparty on a
                                   distribution date exceeds the fixed payment owed to the swap counterparty with
                                   respect to that distribution date. This will not occur except in periods when
                                   one-month LIBOR (as determined pursuant to the swap contract) exceeds 4.72%. We
                                   cannot assure you that any amounts will be received under the swap contract, or that
                                   any amounts that are received will be sufficient to maintain or restore required
                                   overcollateralization or to cover unpaid interest, net rate carryover and losses on
                                   the mortgage loans in loan group 2. Any net payment payable to the swap counterparty
                                   under the terms of the swap contract will reduce amounts available for distribution
                                   to certificateholders, and may reduce the pass-through rates of the swap
                                   certificates. In addition, payments due under the swap contract will be based on the
                                   lesser of a scheduled notional amount that will decline over time and the aggregate
                                   certificate principal balance of the swap certificates. If the rate of prepayments on
                                   the mortgage loans in loan group 2 is slower than anticipated, the schedule on which
                                   payments due under the swap contract are calculated may be less than the aggregate
                                   certificate principal balance of the swap certificates, thereby decreasing the
                                   relative amount of any net swap payment payable by the swap counterparty and
                                   allocated to the swap trust to cover the amounts described above. Furthermore, for so
                                   long as one-month LIBOR is less than 4.72% (which will be adjusted in cases where the
                                   accrual period for the floating rate payment payable by the swap counterparty is not
                                   30 days), available funds with respect to loan group 2 that would otherwise be
                                   available to make distributions on the swap certificates will be used to cover the
                                   net swap payments due to the swap counterparty. In addition, any termination payment
                                   payable to the swap counterparty (other than a swap termination payment resulting
                                   from a swap counterparty trigger event) in the event of early termination of the swap
                                   contract will reduce amounts available for distribution to holders of the swap
                                   certificates.



                                      S-22





                                   Upon early termination of the swap contract, the swap counterparty or the swap
                                   contract administrator, 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 swap
                                   contract. In the event that a swap termination payment is payable to the swap
                                   counterparty, other than a swap termination payment resulting from a swap
                                   counterparty trigger event, that payment will be paid with respect to the related
                                   distribution date, and on any subsequent distribution dates until paid in full,
                                   solely from collections on the mortgage loans in loan group 2 and prior to
                                   distributions to holders of the swap certificates. This feature may result in losses
                                   on the swap certificates. Due to the priority of the applications of the available
                                   funds with respect to loan group 2, the adjustable rate subordinate certificates will
                                   bear the effects of any shortfalls resulting from a net swap payment or swap
                                   termination payment to the swap counterparty before those effects are borne by the
                                   Class AV certificates and one or more classes of adjustable rate subordinate
                                   certificates may suffer a loss as a result of that payment.

                                   To the extent that distributions on the swap certificates depend in part on payments
                                   to be received from the swap counterparty, the ability of the trustee to make
                                   distributions on those certificates will be subject to the credit risk of the swap
                                   counterparty. If a credit rating of the swap counterparty is qualified, reduced or
                                   withdrawn and a substitute counterparty is not obtained in accordance with the terms
                                   of the swap contract, the ratings of the swap certificates may be qualified, reduced
                                   or withdrawn. As a result, the value and marketability of those certificates may be
                                   adversely affected. See "Description of the Certificates--The Swap Contract" in this
                                   prospectus supplement.

PREPAYMENTS ON THE MORTGAGE
LOANS ARE UNPREDICTABLE AND
COULD ADVERSELY AFFECT YOUR
YIELD AND REINVESTMENT .......     No one can accurately predict the level of prepayments that the mortgage loans will
                                   experience. The prepayment experience of the mortgage loans may be affected by many
                                   factors, including:

                                   o   general economic conditions,

                                   o   the level of prevailing interest rates,

                                   o   the availability of alternative financing,

                                   o   the applicability of prepayment charges, and

                                   o   homeowner mobility.

                                   Any mortgage loan may be prepaid in full or in part at any time. However,
                                   approximately 88.54% and 78.97% of the mortgage loans in the statistical calculation
                                   pool in respect of loan group 1 and loan group 2, respectively, in each case by
                                   stated principal balance of the mortgage loans in the statistical calculation pool in
                                   respect of the related loan group provide, and any additional or subsequent mortgage
                                   loans may provide, for the payment by the borrower of a prepayment charge on certain
                                   prepayments during the period of time specified in the related mortgage note. In
                                   addition, substantially all of the mortgage loans contain due-on-sale provisions, and
                                   the master servicer intends to enforce those provisions unless doing so is



                                      S-23





                                   not permitted by applicable law or the master servicer, in a manner consistent with
                                   reasonable commercial practice, permits the purchaser of the mortgaged property in
                                   question to assume the related mortgage loan.

                                   See "The Mortgage Pool" and "Yield, Prepayment and Maturity Considerations" in this
                                   prospectus supplement and "Certain Legal Aspects of the Loans -- Due-on-Sale Clauses"
                                   in the prospectus for a description of certain provisions of the mortgage loans that
                                   may affect their prepayment experience.

                                   The weighted average lives of the offered certificates will be sensitive to the rate
                                   and timing of principal payments (including prepayments) on the mortgage loans in the
                                   related loan group, which may fluctuate significantly from time to time, and will be
                                   affected by any prepayment resulting from the distribution of amounts (if any) on
                                   deposit in the pre-funding account after the end of the funding period.

                                   You should note that:

                                   o   generally, if you purchase your certificates at a discount and principal is
                                       repaid on the mortgage loans in the related loan group slower than you
                                       anticipate, then your yield may be lower than you anticipate,

                                   o   for the adjustable rate certificates, your yield will also be sensitive to:

                                       (1)  the level of one-month LIBOR,

                                       (2)  the timing of adjustment of the pass-through rate on your certificate as it
                                            relates to the interest rates on the applicable mortgage loans and, in the
                                            case of the adjustable rate mortgage loans, the level of the mortgage index,
                                            the timing of adjustment of the interest rates on those mortgage loans, and
                                            periodic and lifetime limits on those adjustments,

                                       (3)  other limitations on the pass-through rates of the adjustable rate
                                            certificates as described further in this prospectus supplement, and

                                       (4)  in the case of the swap certificates, the level of one-month LIBOR relative
                                            to the fixed rate at which the payment made to the swap counterparty is
                                            calculated, and

                                   o   you bear the reinvestment risks resulting from a faster or slower rate of
                                       principal payments than you expect.

                                   See "Yield, Prepayment and Maturity Considerations" in this prospectus supplement.

YOUR YIELD WILL BE AFFECTED BY
THE INTEREST-ONLY FEATURE OF
SOME OF THE MORTGAGE LOANS ...     Approximately 13.83% and 37.97% of the mortgage loans in the statistical calculation
                                   pool in respect of loan group 1 and loan group 2, respectively, in each case by
                                   stated principal balance of the mortgage loans in the statistical calculation pool in
                                   respect of the related loan group require, and any subsequent mortgage loans may
                                   require, monthly payments of only accrued interest for the first two, three or five
                                   years after origination. The borrower is not required to pay any principal on the
                                   borrower's loan during



                                      S-24





                                   this interest-only period but thereafter is required to make monthly payments
                                   sufficient to amortize the loan over its remaining term. These loans are sometimes
                                   referred to as interest-only loans. Interest-only loans have only recently been
                                   originated in significant volumes. As a result, the long-term performance
                                   characteristics of interest-only loans are largely unknown.

                                   Because interest-only loans initially require only the payment of interest, a
                                   borrower may be able to borrow a larger amount than would have been the case for a
                                   fully amortizing mortgage loan.

                                   Interest-only loans may have risks and payment characteristics that are not present
                                   with fully amortizing mortgage loans, including the following:

                                   o   no principal distributions will be made to certificateholders from interest-only
                                       loans during their interest-only period except in the case of a prepayment, which
                                       may extend the weighted average lives of the certificates,

                                   o   during the interest-only period, interest-only loans may be less likely to be
                                       prepaid since the perceived benefits of refinancing may be less than with a fully
                                       amortizing mortgage loan,

                                   o   as the end of the interest-only period approaches, an interest-only loan may be
                                       more likely to be refinanced in order to avoid the increase in the monthly
                                       payment required to amortize the loan over its remaining term,

                                   o   interest-only loans may be more likely to default than fully amortizing loans at
                                       the end of the interest-only period due to the increased monthly payment required
                                       to amortize the loan over its remaining term, and

                                   o   if an interest-only loan defaults, the severity of loss may be greater due to the
                                       larger unpaid principal balance.

HURRICANE KATRINA MAY POSE
SPECIAL RISKS ................     At the end of August 2005, Hurricane Katrina caused catastrophic damage to areas in
                                   the Gulf Coast region of the United States. The issuing entity will not include
                                   mortgage loans that are secured by properties in the states of Louisiana, Mississippi
                                   and Alabama that are located in a FEMA Individual Assistance designated area as a
                                   result of Hurricane Katrina. However, we cannot assure you that there are no mortgage
                                   loans secured by properties that experienced material damage from Hurricane Katrina
                                   in the issuing entity.

                                   Countrywide Home Loans, Inc. will represent and warrant as of the closing date that
                                   each mortgaged property is free of material damage and in good repair. In the event
                                   of a breach of that representation and warranty, Countrywide Home Loans, Inc. will be
                                   obligated to repurchase or substitute for the related mortgage loan. Any such
                                   repurchase would have the effect of increasing the rate of principal payment on the
                                   certificates. Any damage to a mortgaged property that secures a mortgage loan in the
                                   issuing entity occurring after the closing date as a result of any other casualty
                                   event will not cause a breach of this representation and warranty.



                                      S-25





                                   The full economic impact of Hurricane Katrina is uncertain but may affect the ability
                                   of borrowers to make payments on their mortgage loans. Initial economic effects
                                   appear to include:

                                   o   localized areas of nearly complete destruction of the economic infrastructure and
                                       cessation of economic activity,

                                   o   regional interruptions in travel and transportation, tourism and economic
                                       activity generally, and

                                   o   nationwide decreases in petroleum availability with a corresponding increase in
                                       price.

                                   We have no way to determine whether other effects will arise, how long any of these
                                   effects may last, or how these effects may impact the performance of the mortgage
                                   loans. Any impact of these events on the performance of the mortgage loans may
                                   increase the amount of losses borne by the holders of the certificates or impact the
                                   weighted average lives of the certificates.

GEOGRAPHIC CONCENTRATION OF
MORTGAGED PROPERTIES IN
CERTAIN STATES INCREASES THE
IMPACT THAT EVENTS IN THOSE
STATES COULD HAVE ON THE
CERTIFICATES .................     The tables in Annex A related to the state distribution of the mortgaged properties
                                   for the various groups of mortgage loans in the statistical calculation pool set
                                   forth the geographic concentration of the mortgaged properties, including the
                                   percentage by stated principal balance of the mortgage loans in the statistical
                                   calculation pool in each loan group, that are secured by mortgaged properties that
                                   are located in states with concentrations above 10%. Property in California may be
                                   more susceptible than homes located in other parts of the country to certain types of
                                   uninsurable hazards, such as earthquakes, floods, mudslides and other natural
                                   disasters, and property in Florida and the southeastern portion of the United States
                                   is also more susceptible than homes located in other parts of the country to certain
                                   types of uninsurable hazards, such as hurricanes, floods and other natural disasters.
                                   In addition:

                                   o   economic conditions in states with significant concentrations (which may or may
                                       not affect real property values) may affect the ability of borrowers to repay
                                       their loans,

                                   o   declines in the residential real estate markets in states with significant
                                       concentrations may reduce the values of properties located in those states, which
                                       would result in an increase in the loan-to-value ratios, and

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



                                      S-26





INABILITY TO REPLACE SERVICER
COULD AFFECT COLLECTIONS AND
RECOVERIES ON THE MORTGAGE
LOANS ........................     The structure of the master servicing fee might affect the ability to find a
                                   replacement master servicer. Although the trustee is required to replace the master
                                   servicer if the master servicer is terminated or resigns, if the trustee is unwilling
                                   (including for example because the master servicing fee is insufficient) or unable
                                   (including for example, because the trustee does not have the systems to service
                                   mortgage loans), it may be necessary to appoint a replacement master servicer.
                                   Because the master servicing fee is structured as a percentage of the stated
                                   principal balance of each mortgage loan, it may be difficult to replace the master
                                   servicer at a time when the balance of the mortgage loans has been significantly
                                   reduced because the fee may be insufficient to cover the costs associated with
                                   servicing the credit blemished mortgage loans and related REO properties remaining in
                                   the pool. The performance of the mortgage loans may be negatively impacted, beyond
                                   the expected transition period during a servicing transfer, if a replacement master
                                   servicer is not retained within a reasonable amount of time.

YOU MAY RECEIVE A PREPAYMENT
BECAUSE SUBSEQUENT MORTGAGE
LOANS ARE NOT ACQUIRED .......     The ability of the issuing entity to acquire subsequent mortgage loans will depend on
                                   the ability of Countrywide Home Loans, Inc. to originate or acquire mortgage loans,
                                   if necessary, during the funding period that meet the eligibility criteria for
                                   subsequent mortgage loans as described in this prospectus supplement. The ability of
                                   Countrywide Home Loans, Inc. to originate or acquire loans for subsequent transfer
                                   will be affected by a number of factors including prevailing interest rates,
                                   employment levels, the rate of inflation and economic conditions generally.

                                   If the full amount of any deposit in the pre-funding account cannot be used by the
                                   end of the funding period to acquire subsequent mortgage loans, the amount remaining
                                   on deposit in the pre-funding account will be distributed to the holders of the
                                   related senior certificates as a prepayment of principal on the distribution date
                                   immediately following the end of the funding period. We cannot assure you of the
                                   magnitude of any amount on deposit in the pre-funding account at the end of the
                                   funding period.

RIGHTS OF THE NIM INSURER
LIMIT YOUR CONTROL AND NIM
INSURER ACTIONS MAY NEGATIVELY
AFFECT YOU ...................     If there is a NIM Insurer, pursuant to the pooling and servicing agreement, unless
                                   the NIM Insurer fails to make a required payment under the policy insuring the net
                                   interest margin securities and the failure is continuing or the NIM Insurer is the
                                   subject of a bankruptcy proceeding, referred to as a "NIM Insurer Default", the NIM
                                   Insurer will be entitled to exercise, among others, the following rights without the
                                   consent of holders of the offered certificates, and the holders of the offered
                                   certificates may exercise these rights only with the prior written consent of the NIM
                                   Insurer:

                                   o   the right to provide notices of master servicer defaults and the right to direct
                                       the trustee to terminate the rights and obligations of the master servicer under
                                       the pooling and servicing agreement upon a default by the master servicer,



                                      S-27





                                   o   the right to remove the trustee or any co-trustee or custodian pursuant to the
                                       pooling and servicing agreement, and

                                   o   the right to direct the trustee to make investigations and take actions pursuant
                                       to the pooling and servicing agreement.

                                   In addition, unless a NIM Insurer Default exists, the NIM Insurer's consent will be
                                   required before, among other things,

                                   o   any removal of the master servicer, any successor servicer or the trustee, any
                                       appointment of any co-trustee,

                                   o   any otherwise permissible waivers of prepayment charges or extensions of due
                                       dates for payment granted by the master servicer with respect to more than 5% of
                                       the mortgage loans, or

                                   o   any amendment to the pooling and servicing agreement.

                                   Investors in the offered certificates should note that:

                                   o   the rights granted to the NIM Insurer are extensive,

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

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

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

                                   See "Rights of the NIM Insurer under Pooling and Servicing Agreement" in this
                                   prospectus supplement.


SOME STATEMENTS CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS CONSIST OF FORWARD-LOOKING STATEMENTS
RELATING TO FUTURE ECONOMIC PERFORMANCE OR PROJECTIONS AND OTHER FINANCIAL
ITEMS. THESE STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING WORDS
SUCH AS "MAY," "WILL," "SHOULD," "EXPECTS," "BELIEVES," "ANTICIPATES,"
"ESTIMATES," OR OTHER COMPARABLE WORDS. FORWARD-LOOKING STATEMENTS ARE SUBJECT
TO A VARIETY OF RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER FROM THE PROJECTED RESULT. THOSE RISKS AND UNCERTAINTIES INCLUDE, AMONG
OTHERS, GENERAL ECONOMIC AND BUSINESS CONDITIONS, REGULATORY INITIATIVES AND
COMPLIANCE WITH GOVERNMENTAL REGULATIONS, CUSTOMER PREFERENCES AND VARIOUS OTHER
MATTERS, MANY OF WHICH ARE BEYOND OUR CONTROL. BECAUSE WE CANNOT PREDICT THE
FUTURE, WHAT ACTUALLY HAPPENS MAY BE VERY DIFFERENT FROM WHAT WE PREDICT IN OUR
FORWARD-LOOKING STATEMENTS.


                                      S-28



                                THE MORTGAGE POOL

GENERAL

      Set forth below and in Annex A hereto is certain statistical information
based on scheduled principal balances as of January 1, 2006, which is the
"STATISTICAL CALCULATION DATE," concerning a pool of mortgage loans that CWABS,
Inc. (the "DEPOSITOR") believes is representative of the mortgage loans to be
included in the issuing entity. This pool of mortgage loans is referred to as
the "STATISTICAL CALCULATION POOL," and the mortgage loans are referred to as
the "STATISTICAL CALCULATION POOL MORTGAGE LOANS."

      A detailed description (the "DETAILED DESCRIPTION") of the pool of
conventional, credit blemished mortgage loans (the "INITIAL MORTGAGE LOANS") to
be included in the issuing entity on the Closing Date (the "INITIAL MORTGAGE
POOL") will be filed on Form 8-K with the Securities and Exchange Commission
(the "SEC") after the Closing Date. Additionally, in accordance with applicable
securities laws, if there are material changes in characteristics of the Initial
Mortgage Pool, the Depositor will file on Form 8-K with the SEC additional
information related to those material changes. The Detailed Description will
specify the aggregate of the Stated Principal Balances of the Initial Mortgage
Loans included in the Initial Mortgage Pool as of the later of (x) January 1,
2006 and (y) the date of origination of each such Initial Mortgage Loan (the
"INITIAL CUT-OFF DATE"). The aggregate of the Stated Principal Balances of these
Initial Mortgage Loans is referred to as the "INITIAL CUT-OFF DATE POOL
PRINCIPAL BALANCE" and the Stated Principal Balance of any Initial Mortgage Loan
as of the Initial Cut-off Date is referred to as the "INITIAL CUT-OFF DATE
PRINCIPAL BALANCE." The Detailed Description will include for the Initial
Mortgage Loans, the information in the same categories that are presented in
Annex A with respect to the Statistical Calculation Pool.

      The Statistical Calculation Pool consists of approximately 4,194 Mortgage
Loans and is comprised of Mortgage Loans that bear interest at fixed rates,
referred to as "FIXED RATE MORTGAGE LOANS," and adjustable rates, referred to as
"ADJUSTABLE RATE MORTGAGE LOANS." The aggregate Stated Principal Balance of the
Mortgage Loans included in the Statistical Calculation Pool as of the
Statistical Calculation Date is approximately $900,009,638 (the "STATISTICAL
CALCULATION DATE POOL PRINCIPAL BALANCE"), of which approximately $500,007,727
constitute Loan Group 1 Mortgage Loans and approximately $400,001,910 constitute
Loan Group 2 Mortgage Loans. The Depositor believes that the information set
forth in this prospectus supplement with respect to the Statistical Calculation
Pool as presently constituted is representative of the characteristics of the
Initial Mortgage Pool as will be constituted on the Closing Date, although some
characteristics of the Initial Mortgage Loans in the Initial Mortgage Pool will
vary. See "-- The Statistical Calculation Pool" below. Unless otherwise
indicated, information presented below expressed as a percentage (other than
rates of interest) are approximate percentages based on the Statistical
Calculation Date Pool Principal Balance.

      All of the Mortgage Loans to be included in the issuing entity will be
evidenced by promissory notes (the "MORTGAGE NOTES"). The Mortgage Notes will be
secured by first lien deeds of trust, security deeds or mortgages on one- to
four-family residential properties (the "MORTGAGED PROPERTIES"). The Mortgaged
Properties in the Statistical Calculation Pool are located in 50 states and the
District of Columbia. Each Mortgage Loan in the issuing entity will be assigned
to one of two mortgage loan groups ("LOAN GROUP 1" and "LOAN GROUP 2," and each
a "LOAN GROUP"). Loan Group 1 will consist of first lien fixed rate mortgage
loans and Loan Group 2 will consist of first lien adjustable rate mortgage
loans.

      Except for balloon loans, the Mortgage Loans to be included in the issuing
entity will provide for the full amortization of the amount financed over a
series of monthly payments, and a substantial majority of the Mortgage Loans are
expected to provide for payments due as of the first day of each month. The
Mortgage Loans to be included in the issuing entity will have been originated or
purchased by Countrywide Home Loans, Inc. ("COUNTRYWIDE HOME LOANS" or a
"SELLER") and will have been originated substantially in accordance with
Countrywide Home Loans' underwriting criteria for credit blemished mortgage
loans described in this prospectus supplement under "-- Underwriting Standards
-- Credit Blemished Mortgage Loans." Credit blemished mortgage loans are
generally mortgage loans made to borrowers with credit difficulties.

      Scheduled monthly payments made by the borrowers on the Mortgage Loans
("SCHEDULED PAYMENTS") either earlier or later than the scheduled due dates
thereof will not affect the amortization schedule or the relative application of
the payments to principal and interest. All of the Mortgage Notes will provide
for a fifteen (15) day


                                      S-29



grace period for monthly payments. A Scheduled Payment with respect to a
Mortgage Loan is generally considered "delinquent" if the borrower fails to make
the Scheduled Payment prior to the due date occurring immediately after the due
date on which the Scheduled Payment was originally due. None of the Mortgage
Loans will be one payment or more delinquent on a contractual basis as of the
related Cut-off Date.

      Any Mortgage Loan may be prepaid in full or in part at any time; however,
approximately 88.54% and 78.97% of the Mortgage Loans in the Statistical
Calculation Pool in respect of Loan Group 1 and Loan Group 2, respectively, in
each case by stated principal balance of the Mortgage Loans in the Statistical
Calculation Pool in respect of the related Loan Group , and any Subsequent
Mortgage Loans may, provide for the payment by the borrower of a prepayment
charge on certain prepayments made with respect to the Mortgage Loans.
Generally, a prepayment charge will apply, in the case of a Fixed Rate Mortgage
Loan, to prepayments made within five years from the date of execution of the
related Mortgage Note and, in the case of an Adjustable Rate Mortgage Loan, to
prepayments made prior to the first Adjustment Date for that Mortgage Loan. In
general, the related Mortgage Note will provide that a prepayment charge will
apply if, during the applicable period, the borrower prepays the Mortgage Loan
in full. The amount of the prepayment charge will generally be equal to six
months' advance interest calculated on the basis of the Mortgage Rate in effect
at the time of the prepayment on the amount prepaid in excess of 20% of the
original balance of the Mortgage Loan. The "MORTGAGE RATE" with respect to a
Mortgage Loan is the annual rate of interest borne by the Mortgage Loan pursuant
to the terms of the related Mortgage Note.

      The Mortgage Loans will be selected from among the outstanding one- to
four-family mortgage loans in the applicable Seller's portfolio which meet the
criteria described in this prospectus supplement. No selection will be made in a
manner that would adversely affect the interests of certificateholders.

      Countrywide Home Loans will make all of the representations specified in
the prospectus under "Loan Program -- Representations by Sellers; Repurchases"
with respect to all of the Mortgage Loans. Each other Seller will be a special
purpose entity established by Countywide Financial Corporation or one of its
subsidiaries and will sell mortgage loans that were previously acquired from
Countrywide Home Loans. Consequently, each Seller other than Countrywide Home
Loans will only represent that immediately prior to the assignment of the
Mortgage Loans to be sold by it to the Depositor, the Seller had good title to,
and was the sole owner of, those Mortgage Loans free and clear of any pledge,
lien, encumbrance or security interest and had full right and authority, subject
to no interest or participation of, or agreement with, any other party, to sell
and assign the Mortgage Loans pursuant to the Pooling and Servicing Agreement.
In addition, the Depositor will represent that following the transfer of the
Mortgage Loans to it by the Sellers, the Depositor had good title to the
Mortgage Loans and that each of the Mortgage Notes was subject to no offsets,
claims, defenses or counterclaims.

      Additional Information Regarding the Adjustable Rate Mortgage Loans. Each
of the Adjustable Rate Mortgage Loans will have a Mortgage Rate which is subject
to adjustment on the first day of the months specified in the related Mortgage
Note, referred to as an "ADJUSTMENT DATE"), to equal the sum, rounded to the
nearest 0.125%, of:

            (1)   the average of the London interbank offered rates for
      six-month U.S. dollar deposits in the London market, as set forth in The
      Wall Street Journal, or, if the rate ceases to be published in The Wall
      Street Journal or becomes unavailable for any reason, then based upon a
      new index selected by the Master Servicer based on comparable information,
      in each case as most recently announced as of a date generally 45 days
      prior to the Adjustment Date (the "MORTGAGE INDEX"), and

            (2)   a fixed percentage amount specified in the related Mortgage
      Note (the "GROSS MARGIN");

provided, however, that the Mortgage Rate for any Adjustable Rate Mortgage Loan
will not increase or decrease on its initial Adjustment Date by more than a
certain specified percentage (the "INITIAL PERIODIC RATE CAP"), or on any
subsequent Adjustment Date by more than a certain specified percentage (the
"SUBSEQUENT PERIODIC RATE CAP"). The Initial Periodic Rate Cap and Subsequent
Periodic Rate Cap for any Adjustable Rate Mortgage Loan will be specified in the
related Mortgage Note. Substantially all of the Adjustable Rate Mortgage Loans
will have been originated with Mortgage Rates less than the sum of the
then-current Mortgage Index and the related Gross Margin.


                                      S-30



      "TWO-YEAR HYBRID MORTGAGE LOANS", "THREE-YEAR HYBRID MORTGAGE LOANS" and
"FIVE-YEAR HYBRID MORTGAGE LOANS" (collectively, "HYBRID MORTGAGE LOANS") have
fixed Mortgage Rates for approximately 24, 36 and 60 months, respectively, after
their origination before the fixed Mortgage Rates become subject to adjustment
based on the Mortgage Index described in the immediately preceding paragraph.
Substantially all of the Adjustable Rate Mortgage Loans in the Statistical
Calculation Pool are Hybrid Mortgage Loans.

      It is expected that substantially all of the Adjustable Rate Mortgage
Loans will provide that, over the life of each Adjustable Rate Mortgage Loan,
the Mortgage Rate will in no event be more than the initial Mortgage Rate plus a
maximum added margin, generally between 4.000% and 10.000%, as provided in the
Mortgage Note. The initial Mortgage Rate plus the maximum added margin is
referred to as the "MAXIMUM MORTGAGE RATE." The weighted average of these
margins (weighted on the basis of the Stated Principal Balances thereof as of
the Initial Cut-off Date) with respect to the Adjustable Rate Mortgage Loans in
the Statistical Calculation Pool is approximately 6.879%.

      In addition, certain of the Two-Year Hybrid Mortgage Loans in the
Statistical Calculation Pool only require payments of interest during the 24- or
60-month period following origination, and certain of the Three-Year Hybrid
Mortgage Loans in the Statistical Calculation Pool only require payments of
interest during the 36- or 60-month period following origination, in each case
after which amortization of the principal balance is required over the remaining
term of the Mortgage Loan.

      In addition, certain of the Fixed Rate Mortgage Loans in the Statistical
Calculation Pool are Fixed 30-Year Interest-Only Loans. A "FIXED 30-YEAR
INTEREST-ONLY LOAN" has only interest due for approximately 60 months after its
origination before amortization of the principal balance is required.

      Loan-to-Value Ratio. The "LOAN-TO-VALUE RATIO" of a Mortgage Loan is equal
to:

            (1)   the principal balance of the Mortgage Loan at the date of
      origination, divided by

            (2)   the Collateral Value of the related Mortgaged Property.

      The "COLLATERAL VALUE" of a Mortgaged Property is the lesser of:

            (1)   the appraised value based on an appraisal made for Countrywide
      Home Loans by an independent fee appraiser at the time of the origination
      of the related Mortgage Loan, and

            (2)   the sales price of the Mortgaged Property at the time of
      origination.

      With respect to a Mortgage Loan the proceeds of which were used to
refinance an existing mortgage loan, the Collateral Value is the appraised value
of the Mortgaged Property based upon the appraisal obtained at the time of
refinancing.

      Stated Principal Balance. "STATED PRINCIPAL BALANCE" means, for any
Mortgage Loan and (1) the Initial Cut-off Date or the Subsequent Cut-off Date,
as applicable (the "CUT-OFF DATE"), the unpaid principal balance of the Mortgage
Loan as of the Cut-Off Date, as specified in its amortization schedule at the
time (before any adjustment to the amortization schedule for any moratorium or
similar waiver or grace period), after giving effect to any partial prepayments
and Liquidation Proceeds received prior to the Cut-Off Date and to the payment
of principal due on the Cut-Off Date and irrespective of any delinquency in
payment by the related borrower or (2) any Distribution Date, the Stated
Principal Balance of the Mortgage Loan as of its Cut-off Date, minus the sum of
(i) the principal portion of any Scheduled Payments due with respect to the
Mortgage Loan on or prior to the end of the most recent Due Period that were
received by the Master Servicer on or prior to the most recent Determination
Date or were advanced by the Master Servicer on or prior to the most recent
Master Servicer Advance Date, (ii) principal prepayments with respect to the
Mortgage Loan received on or prior to the end of the most recent prepayment
period (the period from the 16th day of the month prior to a Distribution Date
(or, in the case of the first Distribution Date, from the Cut-off Date) to and
including the 15th day of the month in which the Distribution Date occurs (each
a "PREPAYMENT PERIOD")) and (iii) Liquidation Proceeds received by the Master
Servicer prior to the end of the most


                                      S-31



recent Due Period to the extent applied as recoveries of principal with respect
to the Mortgage Loan. The Stated Principal Balance of any Mortgage Loan as to
which the related Mortgaged Property has been liquidated and as to which a Final
Recovery Determination has been made will be zero on each date following the Due
Period in which the Final Recovery Determination is made. When used with respect
to the Mortgage Pool, Stated Principal Balance means the aggregate Stated
Principal Balance of all Mortgage Loans in the Mortgage Pool. When used with
respect to a Loan Group, Stated Principal Balance means the aggregate Stated
Principal Balance of all Mortgage Loans in the Loan Group. A "DETERMINATION
DATE" means with respect to any Distribution Date, the 15th day of the month of
the Distribution Date or, if the 15th day is not a Business Day, the immediately
preceding Business Day.

THE STATISTICAL CALCULATION POOL

      The statistical information presented in this prospectus supplement is
based on the number and the Stated Principal Balances of the Mortgage Loans as
of the Statistical Calculation Date. The Statistical Calculation Pool is smaller
than the Initial Mortgage Pool. It is expected that additional Mortgage Loans
will be included in the Initial Mortgage Pool on the Closing Date and that
certain of the Statistical Calculation Pool Mortgage Loans may prepay in part or
in full prior to the Closing Date, or may be determined not to meet the
eligibility criteria requirements for the Initial Mortgage Pool and therefore
may not be included in the Initial Mortgage Pool. As a result of the foregoing,
the statistical distribution of characteristics for the Initial Mortgage Pool
will vary from the statistical distribution of the characteristics of the
Statistical Calculation Pool as presented in this prospectus supplement,
although the variance will not be material. Further statistical information
regarding the Statistical Calculation Pool Mortgage Loans is set forth in Annex
A hereto.

ASSIGNMENT OF THE MORTGAGE LOANS

      Pursuant to the pooling and servicing agreement dated as of January 1,
2006 (the "POOLING AND SERVICING AGREEMENT"), among the Depositor, the Master
Servicer, the Sellers, and The Bank of New York, as trustee (the "TRUSTEE"), the
Depositor on the Closing Date will sell, transfer, assign, set over and
otherwise convey without recourse to the Trustee in trust for the benefit of the
certificateholders, all right, title and interest of the Depositor in and to
each Initial Mortgage Loan and all right, title and interest in and to all other
assets included in the issuing entity, including all principal and interest
received on or with respect to the Initial Mortgage Loans after the Initial
Cut-off Date (exclusive of any scheduled principal due on or prior to the
Initial Cut-off Date and any interest accruing prior to the Initial Cut-off
Date) and the Pre-Funded Amount, if any, deposited in the Pre-Funding Account on
the Closing Date.

      In connection with the transfer and assignment of the Mortgage Loans, the
Depositor will deliver the following documents to the Trustee (collectively
constituting the "MORTGAGE FILE") with respect to each Initial Mortgage Loan and
each Subsequent Mortgage Loan, if any (collectively, the "MORTGAGE LOANS"):

            (1)   the original Mortgage Note, endorsed by manual or facsimile
      signature in blank in the following form: "Pay to the order of
      _______________ without recourse", with all intervening endorsements that
      show a complete chain of endorsement from the originator to the person
      endorsing the Mortgage Note, or, if the original Mortgage Note has been
      lost or destroyed and not replaced, an original lost note affidavit,
      stating that the original Mortgage Note was lost or destroyed, together
      with a copy of the related Mortgage Note and all such intervening
      endorsements,

            (2)   the original recorded Mortgage or a copy thereof with
      recording information,

            (3)   a duly executed assignment of the Mortgage to "Asset-Backed
      Certificates, Series 2006-1, CWABS, Inc., by The Bank of New York, a New
      York banking corporation, as trustee under the Pooling and Servicing
      Agreement dated as of January 1, 2006, without recourse," in recordable
      form, or a copy thereof with recording information as described in the
      Pooling and Servicing Agreement,

            (4)   the original recorded assignment or assignments of the
      Mortgage or a copy of such assignments, with recording information,
      together with all interim recorded assignments of such Mortgage or a copy
      of such assignments, with recording information,


                                      S-32



            (5)   the original or copies of each assumption, modification,
      written assurance or substitution agreement, if any, and

            (6)   the original or duplicate original lender's title policy and
      all riders thereto or a copy of lender's title policy and all riders
      thereto or a printout of the electronic equivalent and all riders thereto
      or, in the event such original title policy has not been received from the
      insurer, such original or duplicate original lender's title policy and all
      riders thereto will be delivered within one year of the Closing Date.

      Notwithstanding the foregoing, in lieu of providing the documents set
forth in clauses (3) and (4) above, the Depositor may at its discretion provide
evidence that the related Mortgage is held through the MERS(R) System. In
addition, the Mortgages for some or all of the Mortgage Loans in the issuing
entity that are not already held through the MERS(R) System may, at the
discretion of the Master Servicer, in the future be held through the MERS(R)
System. For any Mortgage held through the MERS(R) System, the Mortgage is
recorded in the name of Mortgage Electronic Registration Systems, Inc., or
MERS(R), as nominee for the owner of the Mortgage Loan, and subsequent
assignments of the Mortgage were, or in the future may be, at the discretion of
the Master Servicer, registered electronically through the MERS(R) System. For
each of these Mortgage Loans, MERS(R) serves as mortgagee of record on the
Mortgage solely as a nominee in an administrative capacity on behalf of the
Trustee, and does not have any interest in the Mortgage Loan.

      Pursuant to the Pooling and Servicing Agreement, the Depositor will be
required to deliver (or cause delivery of) the Mortgage Files:

            (A)   not later than the Closing Date, with respect to at least 50%
      of the Initial Mortgage Loans, and not later than the relevant Subsequent
      Transfer Date, with respect to at least 10% of the Subsequent Mortgage
      Loans conveyed on any related Subsequent Transfer Date,

            (B)   not later than twenty days after the Closing Date, with
      respect to at least an additional 40% of the Initial Mortgage Loans, and
      not later than twenty days after the relevant Subsequent Transfer Date
      with respect to the remaining Subsequent Mortgage Loans conveyed on any
      related Subsequent Transfer Date, and

            (C)   not later than thirty days after the Closing Date, with
      respect to the remaining Initial Mortgage Loans.

      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 (such as California) as to which an opinion of counsel is delivered to
the effect that the 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 applicable Seller. As to any
Mortgage Loan, the recording requirement exception described in the preceding
sentence is applicable only so long as the related Mortgage File is maintained
in the possession of the Trustee in one of the states to which the exception
applies. In the event an assignment is delivered to the Trustee in blank and the
related Mortgage File is released by the Trustee pursuant to applicable
provisions of the Pooling and Servicing Agreement, the Trustee will complete the
assignment as provided in subparagraph (3) above prior to the release. If the
assignment of the Mortgage Loan is required to be recorded to protect the
interest of the Trustee in the Mortgage Loans, the Master Servicer is required
to cause each previously unrecorded assignment to be submitted for recording.

      The Trustee will review the Initial Mortgage Loan documents on or prior to
the Closing Date (or promptly after the Trustee's receipt of any document
permitted to be delivered after the Closing Date), and the Subsequent Mortgage
Loan documents promptly after the Trustee's receipt thereof on or after the
related Subsequent Transfer Date as described above, and the Trustee will hold
the Mortgage Loan documents in trust for the benefit of the holders of the
Certificates in accordance with its customary procedures, including storing the
documents in fire-resistant facilities. After review of the Mortgage Loan
documents, if any document is found to be missing or defective in any material
respect, the Trustee is required to notify the Master Servicer and Countrywide
Home Loans in writing. If Countrywide Home Loans cannot or does not cure the
omission or defect within 90 days of its receipt


                                      S-33



of notice from the Trustee, Countrywide Home Loans is required to repurchase the
related Mortgage Loan from the issuing entity at a price (the "PURCHASE PRICE")
equal to the sum of:

      (i)   100% of the unpaid principal balance (or, if the purchase or
            repurchase, as the case may be, is effected by the Master Servicer,
            the Stated Principal Balance) of the Mortgage Loan as of the date of
            the purchase,

      (ii)  accrued interest thereon at the applicable Mortgage Rate (or, if the
            purchase or repurchase, as the case may be, is effected by the
            Master Servicer, at the Net Mortgage Rate) from (a) the date through
            which interest was last paid by the borrower (or, if the purchase or
            repurchase, as the case may be, is effected by the Master Servicer,
            the date through which interest was last advanced by, and not
            reimbursed to, the Master Servicer) to (b) the Due Date in the month
            in which the Purchase Price is to be distributed to
            certificateholders, and

      (iii) any costs, expenses and damages incurred by the issuing entity
            resulting from any violation of any predatory or abusive lending law
            in connection with the Mortgage Loan.

      Rather than repurchase the Mortgage Loan as provided above, Countrywide
Home Loans may remove the Mortgage Loan (a "DELETED MORTGAGE LOAN") from the
issuing entity and substitute in its place another Mortgage Loan of like kind (a
"REPLACEMENT MORTGAGE LOAN"); however, a substitution is only permitted within
two years after the Closing Date, and may not be made unless an opinion of
counsel is provided to the effect that the substitution would not disqualify any
REMIC election made by the Trustee or result in a prohibited transaction tax
under the Code. Any Replacement Mortgage Loan generally will, on the date of
substitution, among other characteristics set forth in the Pooling and Servicing
Agreement:

            (1)   have a Stated Principal Balance, after deduction of the
      principal portion of the Scheduled Payment due in the month of
      substitution, not in excess of, and not less than 90% of, the Stated
      Principal Balance of the Deleted Mortgage Loan (the amount of any
      shortfall to be forwarded by Countrywide Home Loans to the Master Servicer
      and deposited by the Master Servicer in the Certificate Account not later
      than the succeeding Determination Date and held for distribution to the
      holders of the Certificates on the related Distribution Date),

            (2)   if the Deleted Mortgage Loan that is being replaced is an
      Adjustable Rate Mortgage Loan, have a Maximum Mortgage Rate not more than
      1% per annum higher or lower than the Maximum Mortgage Rate of the Deleted
      Mortgage Loan,

            (3)   if the Deleted Mortgage Loan that is being replaced is an
      Adjustable Rate Mortgage Loan, have a minimum Mortgage Rate specified in
      its related Mortgage Note (the "MINIMUM MORTGAGE RATE") not more than 1%
      per annum higher or lower than the Minimum Mortgage Rate of the Deleted
      Mortgage Loan,

            (4)   if the Deleted Mortgage Loan that is being replaced is an
      Adjustable Rate Mortgage Loan, have the same Mortgage Index and intervals
      between Adjustment Dates as the Deleted Mortgage Loan, an Initial Periodic
      Rate Cap and a Subsequent Periodic Rate Cap each not more than 1% per
      annum lower than that of the Deleted Mortgage Loan, and a Gross Margin not
      more than 1% per annum higher or lower than that of the Deleted Mortgage
      Loan,

            (5)   have the same or higher credit quality characteristics than
      that of the Deleted Mortgage Loan,

            (6)   be accruing interest at a rate not more than 1% per annum
      higher or lower than that of the Deleted Mortgage Loan,

            (7)   have a Loan-to-Value Ratio no higher than that of the Deleted
      Mortgage Loan,


                                      S-34



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

            (9)   not permit conversion of the Mortgage Rate from a fixed rate
      to a variable rate or vice versa,

            (10)  provide for a prepayment charge on terms substantially similar
      to those of the prepayment charge, if any, of the Deleted Mortgage Loan,

            (11)  have the same occupancy type and lien priority as the Deleted
      Mortgage Loan, and

            (12)  comply with all of the representations and warranties set
      forth in the Pooling and Servicing Agreement as of the date of
      substitution.

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

PRE-FUNDING

      On the Closing Date, the Depositor may elect to deposit an amount of up to
25% of the initial Certificate Principal Balance of the certificates issued by
the issuing entity (the "PRE-FUNDED AMOUNT") in a pre-funding account (the
"PRE-FUNDING ACCOUNT") established and maintained by the Trustee on behalf of
the certificateholders. The Pre-Funded Amount will be allocated between the Loan
Groups so that the amount allocated to any Loan Group will not exceed 25% of the
initial Certificate Principal Balance of the Certificates related to the Loan
Group. Any investment income earned from amounts in the Pre-Funding Account, if
any, will be paid to the Countrywide Home Loans, and will not be available for
payments on the Certificates. During the period from the Closing Date until the
earlier of (x) the date the amount in the Pre-Funding Account is less than
$175,000 and (y) March 27, 2006 (the "FUNDING PERIOD"), the Depositor will be
expected to purchase additional mortgage loans originated or purchased by a
Seller (the "SUBSEQUENT MORTGAGE LOANS") from a Seller and sell the Subsequent
Mortgage Loans to the issuing entity as described below. The purchase price for
each Subsequent Mortgage Loan will equal the Stated Principal Balance of that
Subsequent Mortgage Loan as of the later of (x) the first day of the month of
the related Subsequent Transfer Date and (y) the origination date of that
Subsequent Mortgage Loan (the related "SUBSEQUENT CUT-OFF DATE") and will be
paid from the Pre-Funding Account. Accordingly, the purchase of Subsequent
Mortgage Loans will decrease the amount on deposit in the Pre-Funding Account
and increase the Stated Principal Balance of the Mortgage Pool.

      Pursuant to the Pooling and Servicing Agreement and a Subsequent Transfer
Agreement to be executed by the applicable Seller, the Depositor and the
Trustee, the conveyance of Subsequent Mortgage Loans may be made on any Business
Day during the Funding Period (a "SUBSEQUENT TRANSFER DATE"), subject to the
fulfillment of certain conditions in the Pooling and Servicing Agreement,
including that:

  o   the Subsequent Mortgage Loans conveyed on the Subsequent Transfer Date
      satisfy the same representations and warranties in the Pooling and
      Servicing Agreement applicable to all Mortgage Loans,

  o   the Subsequent Mortgage Loans conveyed on the Subsequent Transfer Date
      were selected in a manner reasonably believed not to be adverse to the
      interests of the certificateholders,

  o   the Trustee receives an opinion of counsel with respect to the validity of
      the conveyance of the Subsequent Mortgage Loans conveyed on the Subsequent
      Transfer Date,

  o   the Trustee receives an opinion of counsel to the effect that the
      conveyance of the Subsequent Mortgage Loans conveyed on the Subsequent
      Transfer Date will not (i) result in the imposition of the tax on
      "prohibited transactions" on the issuing entity or contributions after the
      Startup Date, as defined in Sections 860F(a)(2) and 860G(d) of the Code,
      respectively, or (ii) cause the issuing entity to fail to qualify as a
      REMIC at any time that any Certificates are outstanding,


                                      S-35



  o   the Trustee receives opinions of counsel to the effect that the conveyance
      of the Subsequent Mortgage Loans conveyed on the Subsequent Transfer Date
      from the applicable Seller to the Depositor and the simultaneous
      conveyance of the Subsequent Mortgage Loans from the Depositor to the
      issuing entity will be characterized as true sales and not loans secured
      by the Subsequent Mortgage Loans,

  o   the conveyance of the Subsequent Mortgage Loans on the Subsequent Transfer
      Date will not result in a reduction or withdrawal of any ratings assigned
      to the Certificates,

  o   no Subsequent Mortgage Loan conveyed on the Subsequent Transfer Date was
      30 or more days delinquent, and

  o   following the conveyance of the Subsequent Mortgage Loans on the
      Subsequent Transfer Date to the issuing entity, the characteristics of the
      Mortgage Loans in each Loan Group will not vary by more than the permitted
      variance specified below (other than the percentage of Mortgage Loans
      secured by properties located in California, which will not exceed 50% of
      the Mortgage Loans in Loan Group 1 or Loan Group 2 and the percentage of
      mortgage loans in the Credit Grade Categories of "C" or below, which will
      not exceed 10% of the Mortgage Loans in each Loan Group) from the
      characteristics listed below; provided that for the purpose of making the
      calculations, the characteristics for any Initial Mortgage Loan will be
      taken as of the Initial Cut-off Date and the characteristics for any
      Subsequent Mortgage Loan will be taken as of the Subsequent Cut-off Date:

      LOAN GROUP 1



                                                                                PERMITTED VARIANCE OR
      CHARACTERISTIC                                                                    RANGE
      --------------------                                                      ---------------------

      Average Stated Principal Balance ......................      $204,586              10%
      Weighted Average Mortgage Rate ........................       7.149%              0.10%
      Weighted Average Original Loan-to-Value Ratio .........       73.77%               3%
      Weighted Average Remaining Term to Maturity ...........     355 months          3 months
      Weighted Average Credit Bureau Risk Score .............     611 points          5 points


      LOAN GROUP 2




                                                                                PERMITTED VARIANCE OR
      CHARACTERISTIC                                                                    RANGE
      --------------------                                                      ---------------------

      Average Stated Principal Balance ......................      $228,573              10%
      Weighted Average Mortgage Rate ........................       7.502%              0.10%
      Weighted Average Original Loan-to-Value Ratio .........       77.78%               3%
      Weighted Average Remaining Term to Maturity ...........     359 months          3 months
      Weighted Average Credit Bureau Risk Score .............     618 points          5 points


      Within thirty days after each Subsequent Transfer Date, the Depositor is
required to deliver to the Trustee a letter of a nationally recognized firm of
independent public accountants stating whether or not the Subsequent Mortgage
Loans conveyed on the related Subsequent Transfer Date conform to the
characteristics described in the last two bullet points set forth above. Other
than the delivery of that letter, no other party will independently verify
satisfaction of the conditions set forth above with respect to a transfer of
Subsequent Mortgage Loans.

UNDERWRITING STANDARDS

GENERAL

      Credit Blemished Mortgage Loans. The following is a description of the
underwriting procedures customarily employed by Countrywide Home Loans with
respect to credit blemished mortgage loans. Countrywide Home Loans has been
originating credit blemished mortgage loans since 1995. Countrywide Home Loans
produces its credit blemished mortgage loans through its Consumer Markets, Full
Spectrum Lending, Correspondent Lending and Wholesale Lending Divisions. Prior
to the funding of any credit blemished mortgage loan, Countrywide Home


                                      S-36



Loans underwrites the related mortgage loan in accordance with the underwriting
standards established by Countrywide Home Loans. In general, the mortgage loans
are underwritten centrally by a specialized group of underwriters who are
familiar with the unique characteristics of credit blemished mortgage loans. In
general, Countrywide Home Loans does not purchase any credit blemished mortgage
loan that it has not itself underwritten.

      Countrywide Home Loans' underwriting standards are primarily intended to
evaluate the value and adequacy of the mortgaged property as collateral for the
proposed mortgage loan and the borrower's credit standing and repayment ability.
On a case by case basis, Countrywide Home Loans may determine that, based upon
compensating factors, a prospective borrower not strictly qualifying under the
underwriting risk category guidelines described below warrants an underwriting
exception. Compensating factors may include low loan-to-value ratio, low
debt-to-income ratio, stable employment, time in the same residence or other
factors. It is expected that a significant number of the Mortgage Loans will
have been originated based on these types of underwriting exceptions.

      Each prospective borrower completes an application which includes
information with respect to the applicant's assets, liabilities, income and
employment history, as well as certain other personal information. Countrywide
Home Loans requires an independent credit bureau report on the credit history of
each applicant in order to evaluate the applicant's prior willingness and/or
ability to repay. The report typically contains information relating to credit
history with local and national merchants and lenders, installment debt payments
and any record of defaults, bankruptcy, repossession, suits or judgments, among
other matters.

      After obtaining all applicable employment, credit and property
information, Countrywide Home Loans uses a debt-to-income ratio to assist in
determining whether the prospective borrower has sufficient monthly income
available to support the payments of principal and interest on the mortgage loan
in addition to other monthly credit obligations. The "DEBT-TO-INCOME RATIO" is
the ratio of the borrower's total monthly credit obligations to the borrower's
gross monthly income. The maximum monthly debt-to-income ratio varies depending
upon a borrower's credit grade and documentation level (as described below) but
does not generally exceed 55%. Variations in the monthly debt-to-income ratios
limit are permitted based on compensating factors.

      Countrywide Home Loans' underwriting standards are applied in accordance
with applicable federal and state laws and regulations and require an
independent appraisal of the mortgaged property prepared on a Uniform
Residential Appraisal Report (Form 1004) or other appraisal form as applicable
to the specific mortgaged property type. Each appraisal includes a market data
analysis based on recent sales of comparable homes in the area and, where deemed
appropriate, replacement cost analysis based on the current cost of constructing
a similar home and generally is required to have been made not earlier than 180
days prior to the date of origination of the mortgage loan. Every independent
appraisal is reviewed by a representative of Countrywide Home Loans before the
loan is funded, and an additional review appraisal is generally performed in
connection with appraisals not provided by Landsafe Appraisals, Inc., a wholly
owned subsidiary of Countrywide Home Loans. In most cases, properties that are
not at least in average condition (including properties requiring major deferred
maintenance) are not acceptable as collateral for a credit blemished loan. The
maximum loan amount varies depending upon a borrower's credit grade, Credit
Bureau Risk Score, and documentation level but does not generally exceed
$1,000,000. Variations in maximum loan amount limits are permitted based on
compensating factors.

      Countrywide Home Loans' underwriting standards permit first mortgage loans
with loan-to-value ratios at origination of up to 100% and second mortgage loans
with combined loan-to-value ratios at origination of up to 100% depending on the
program, type and use of the property, documentation level, creditworthiness of
the borrower, debt-to-income ratio and loan amount.

      Countrywide Home Loans requires title insurance on all credit blemished
mortgage loans. Countrywide Home Loans also requires that fire and extended
coverage casualty insurance be maintained on the mortgaged property in an amount
at least equal to the principal balance or the replacement cost of the mortgaged
property, whichever is less.

      Countrywide Home Loans' credit blemished mortgage loan underwriting
standards are more flexible than the standards generally acceptable to
Countrywide Home Loans for its non-credit blemished mortgage loans with regard
to the borrower's credit standing and repayment ability. While more flexible,
Countrywide Home Loans'


                                      S-37



underwriting guidelines still place primary reliance on a borrower's ability to
repay; however Countrywide Home Loans may require lower loan-to-value ratios
than for loans underwritten to more traditional standards. Borrowers who qualify
generally have payment histories and debt-to-income ratios which would not
satisfy more traditional underwriting guidelines and may have a record of major
derogatory credit items such as outstanding judgments or prior bankruptcies.
Countrywide Home Loans' credit blemished mortgage loan underwriting guidelines
establish the maximum permitted loan-to-value ratio for each loan type based
upon these and other risk factors with more risk factors resulting in lower
loan-to-value ratios.

      Countrywide Home Loans underwrites or originates credit blemished mortgage
loans pursuant to alternative sets of underwriting criteria under its Full
Documentation Loan Program (the "FULL DOC PROGRAM"), and Stated Income Loan
Program (the "STATED INCOME PROGRAM"). Under each of the underwriting programs,
Countrywide Home Loans verifies the loan applicant's sources and amounts of
income (except under the Stated Income Program where the amount of income is not
verified), calculates the amount of income from all sources indicated on the
loan application, reviews the credit history of the applicant, calculates the
debt-to-income ratio to determine the applicant's ability to repay the loan, and
reviews the appraisal of the mortgaged property for compliance with Countrywide
Home Loans' underwriting standards.

      Under the Stated Income Program, the borrower's employment and income
sources and amounts must be stated on the borrower's application. The borrower's
income as stated must be reasonable for the related occupation and the
determination as to reasonableness is subject to the loan underwriter's
discretion. However, the borrower's income as stated on the application is not
independently verified. Maximum loan-to-value ratios are generally lower than
those permitted under the Full Doc Program. Except as otherwise stated above,
the same mortgage credit, consumer credit and collateral related underwriting
guidelines apply.

      Under the Full Doc and Stated Income Programs, various risk categories are
used to grade the likelihood that the borrower will satisfy the repayment
conditions of the mortgage loan. These risk categories establish the maximum
permitted loan-to-value ratio, debt-to-income ratio and loan amount, given the
borrower's credit history, the occupancy status of the mortgaged property and
the type of mortgaged property. In general, more (or more recent) derogatory
credit items such as delinquent mortgage payments or prior bankruptcies result
in a loan being assigned to a higher credit risk category.

      Countrywide Home Loans' underwriting guidelines for credit blemished
mortgage loans utilize credit grade categories to grade the likelihood that the
borrower will satisfy the repayment conditions of the mortgage loans. In
general, a credit grade category is assigned by evaluating a borrower's mortgage
history, time since bankruptcy, and time since foreclosure or notice of default.
The credit grade categories establish guidelines for determining maximum
allowable loan-to-value ratios and loan amounts given the borrower's Credit
Bureau Risk Score, and maximum allowable debt-to-income ratios for a given
mortgage loan. A summary of the credit grade categories is set forth below.

Credit Grade Category: "A"
      LOAN-TO-VALUE RATIO: Maximum of 100%
      DEBT-TO-INCOME RATIO: Maximum of 55%
      LOAN AMOUNT: Maximum of $1,000,000
      CONSUMER CREDIT HISTORY: Credit Bureau Risk Score must be greater than or
      equal to 500 for loan amounts up to $400,000, 520 for loan amounts up to
      $500,000, 580 for loan amounts up to $650,000, or 600 for loan amounts of
      $650,001 to $1,000,000. If no Credit Bureau Risk Score is available,
      Countrywide Home Loans evaluates the borrower's consumer credit history
      through alternative means in accordance with its underwriting criteria for
      credit blemished mortgage loans. If the Credit Bureau Risk Score is
      inaccurate, as evidenced by objective criteria provided to Countrywide
      Home Loans by independent third parties, then no more than 4 delinquencies
      of 30 days in the past 12 months and loan amount is restricted to
      $500,000.
      MORTGAGE HISTORY: No more than 1 non-consecutive delinquency of 30 days
      during the past 12 months.
      BANKRUPTCY: At least 2 years since discharge/dismissal of Chapter 7, 11,
      or 13 Bankruptcy.
      FORECLOSURE/NOTICE OF DEFAULT: At least 3 years since foreclosure/notice
      of default released.


                                      S-38



Credit Grade Category: "A-"
      LOAN-TO-VALUE RATIO: Maximum of 90%
      DEBT-TO-INCOME RATIO: Maximum of 55%
      LOAN AMOUNT: Maximum of $500,000
      CONSUMER CREDIT HISTORY: Credit Bureau Risk Score must be greater than or
      equal to 500 for loan amounts up to $400,000, or 520 for loan amounts up
      to $500,000. If no Credit Bureau Risk Score is available, Countrywide Home
      Loans evaluates the borrower's consumer credit history through alternative
      means in accordance with its underwriting criteria for credit blemished
      mortgage loans. If the Credit Bureau Risk Score is inaccurate, as
      evidenced by objective criteria provided to Countrywide Home Loans by
      independent third parties, then no more than 6 delinquencies of 30 days,
      and 2 delinquencies of 60 days in the past 12 months.
      MORTGAGE HISTORY: No more than 2 non-consecutive delinquencies of 30 days
      during the past 12 months.
      BANKRUPTCY: At least 2 years since discharge/dismissal of Chapter 7 or 11
      Bankruptcy, and 2 years since filing or dismissal of Chapter 13
      Bankruptcy. Additionally, a Chapter 13 Bankruptcy must be discharged prior
      to the loan application date if it has not been dismissed.
      FORECLOSURE/NOTICE OF DEFAULT: At least 3 years since foreclosure/notice
      of default released.

Credit Grade Category: "B"
      LOAN-TO-VALUE RATIO: Maximum of 85%
      DEBT-TO-INCOME RATIO: Maximum of 55%
      LOAN AMOUNT: Maximum of $500,000
      CONSUMER CREDIT HISTORY: Credit Bureau Risk Score must be greater than or
      equal to 500 for loan amounts up to $400,000, or 520 for loan amounts up
      to $500,000. If no Credit Bureau Risk Score is available, Countrywide Home
      Loans evaluates the borrower's consumer credit history through alternative
      means in accordance with its underwriting criteria for credit blemished
      mortgage loans. If the Credit Bureau Risk Score is inaccurate, as
      evidenced by objective criteria provided to Countrywide Home Loans by
      independent third parties, then no more than 10 delinquencies of 30 days,
      4 delinquencies of 60 days, and 2 delinquencies of 90 days or more in the
      past 12 months.
      MORTGAGE HISTORY: No more than 1 delinquency of 60 days in the past 12
      months. Delinquencies of 30 days are not restricted.
      BANKRUPTCY: At least 18 months since discharge or dismissal of Chapter 7
      or 11 Bankruptcy and 18 months since filing or dismissal of Chapter 13
      Bankruptcy.
      FORECLOSURE/NOTICE OF DEFAULT: At least 2 years since foreclosure/notice
      of default released.

Credit Grade Category: "C"
      LOAN-TO-VALUE RATIO: Maximum of 80%
      DEBT-TO-INCOME RATIO: Maximum of 55%
      LOAN AMOUNT: Maximum of $450,000.
      CONSUMER CREDIT HISTORY: The minimum Credit Bureau Risk Score is 500 for
      loan amounts up to $400,000, or 520 for loan amounts up to $450,000. If no
      Credit Bureau Risk Score is available, Countrywide Home Loans evaluates
      the borrower's consumer credit history through alternative means in
      accordance with its underwriting criteria for credit blemished mortgage
      loans. If the Credit Bureau Risk Score is inaccurate, as evidenced by
      objective criteria provided to Countrywide Home Loans by independent third
      parties, then no more than 8 delinquencies of 60 days, and 4 delinquencies
      of 90 days or more in the past 12 months.
      MORTGAGE HISTORY: No more than 1 delinquency of 90 days during the past 12
      months. Delinquencies of 30 days and 60 days are not restricted.
      BANKRUPTCY: At least 1 year since discharge or dismissal of Chapter 7 or
      11 Bankruptcy and 1 year since filing or dismissal of Chapter 13
      Bankruptcy.
      FORECLOSURE/NOTICE OF DEFAULT: At least 1 year since foreclosure/notice of
      default released.

Credit Grade Category: "C-"
      LOAN-TO-VALUE RATIO: Maximum of 70%
      DEBT-TO-INCOME RATIO: Maximum of 55%
      LOAN AMOUNT: Maximum of $350,000.
      CONSUMER CREDIT HISTORY: The minimum Credit Bureau Risk Score is 500. If
      no Credit Bureau Risk


                                      S-39



      Score is available, Countrywide Home Loans evaluates the borrower's
      consumer credit history through alternative means in accordance with its
      underwriting criteria for credit blemished mortgage loans. If the Credit
      Bureau Risk Score is inaccurate, as evidenced by objective criteria
      provided to Countrywide Home Loans by independent third parties, then no
      more than 12 delinquencies of 60 days, and 8 delinquencies of 90 days or
      more in the past 12 months.
      MORTGAGE HISTORY: No more than 2 delinquencies of 90 days during the past
      12 months. Delinquencies of 30 days and 60 days are not restricted.
      BANKRUPTCY: Chapter 13 Bankruptcy must be discharged/dismissed, or
      paid-off through escrow at funding. Chapter 7 Bankruptcy must be
      discharged/dismissed at least 1 day prior to funding.
      FORECLOSURE/NOTICE OF DEFAULT: None at time of funding.

Credit Grade Category: "D"
      LOAN-TO-VALUE RATIO: Maximum of 65%
      DEBT-TO-INCOME RATIO: Maximum of 45%
      LOAN AMOUNT: Maximum of $250,000
      CONSUMER CREDIT HISTORY: The minimum Credit Bureau Risk Score is 500. If
      no Credit Bureau Risk Score is available, Countrywide Home Loans evaluates
      the borrower's consumer credit history through alternative means in
      accordance with its underwriting criteria for credit blemished mortgage
      loans. If the Credit Bureau Risk Score is inaccurate, as evidenced by
      objective criteria provided to Countrywide Home Loans by independent third
      parties, then no more than 12 delinquencies of 60 days, and 8
      delinquencies of 90 days or more in the past 12 months.
      MORTGAGE HISTORY: Open Notice of default must be cured at time of funding.
      BANKRUPTCY: Chapter 13 Bankruptcy must be discharged/dismissed, or
      paid-off through escrow at funding. Chapter 7 Bankruptcy must be
      discharged or dismissed at least 1 day prior to funding.
      FORECLOSURE/NOTICE OF DEFAULT: Notice of default is acceptable but must be
      cured at time of funding.

      The loan-to-value ratios, debt-to-income ratios, and loan amounts stated
above are maximum levels for a given credit grade category. There are additional
restrictions on loan-to-value ratios, debt-to-income ratios, and loan amounts
depending on, but not limited to, the occupancy status of the mortgaged
property, the type of mortgaged property, and the documentation program.

      The "CREDIT BUREAU RISK SCORE" is a statistical credit score obtained by
Countrywide Home Loans in connection with the loan application to help assess a
borrower's creditworthiness. Credit Bureau Risk Scores are generated by models
developed by a third party and are made available to mortgage lenders through
three national credit bureaus. 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. The Credit Bureau Risk Scores are based
on a borrower's historical credit data, including, among other things, payment
history, delinquencies on accounts, levels of outstanding indebtedness, length
of client history, types of credit, and bankruptcy experience. Credit Bureau
Risk Scores range from approximately 250 to approximately 900, with higher
scores indicating an individual with a more favorable credit history compared to
an individual with a lower score. However, a Credit Bureau Risk 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 Bureau Risk 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 Bureau Risk
Scores were not developed specifically for use in connection with mortgage
loans, but for consumer loans in general. Therefore, a Credit Bureau Risk Score
does not take into consideration the effect of mortgage loan characteristics on
the probability of repayment by the borrower. The Credit Bureau Risk Scores set
forth in Annex A hereto were obtained either at the time of origination of the
Mortgage Loan or more recently. The Credit Bureau Risk Score is used as an aid
to, not a substitute for, the underwriter's judgment.

      In determining a Credit Bureau Risk Score for a particular borrower,
Countrywide Home Loans attempts to obtain Credit Bureau Risk Scores from each of
the three national credit bureaus that produce these scores. Although different
scores may be available from each of the three national credit bureaus for a
particular borrower, Countrywide Home Loans will use only one score in its
determination of whether to underwrite a mortgage loan, based on the following
methodology: if scores are available from each of the three national credit
bureaus, Countrywide Home Loans will disregard the highest and lowest scores,
and use the remaining score; and if scores


                                      S-40



are available from only two of the three national credit bureau, Countrywide
Home Loans will use the lower of the two scores. In the case of a mortgage loan
with more than one applicant, Countrywide Home Loans will use the Credit Bureau
Risk Score of the applicant contributing the highest percentage of the total
qualifying income.

      If only one score is available, or no score is available, Countrywide Home
Loans will follow its Limited Credit guidelines. Under the Limited Credit
guidelines, credit histories may be developed using rent verification from
current and/or previous landlords, proof of payment to utilities such as
telephone, or verification from other sources of credit or services for which
the applicant has (or had) a regular financial obligation. In general,
applications with the aforementioned type of credit documentation are limited to
A- risk and 80% loan-to-value ratio. For applicants with established mortgage
payment history of at least 12 months and one credit score or no credit score,
the mortgage payment history may be used in lieu of a credit score to determine
a risk grade.

                         SERVICING OF THE MORTGAGE LOANS

GENERAL

      The Master Servicer will master service all of the Mortgage Loans in
accordance with the terms set forth in the Pooling and Servicing Agreement. The
Master Servicer has agreed to service and administer the mortgage loans in
accordance with customary and usual standards of practice of prudent mortgage
loan lenders. The Master Servicer has also agreed to represent and protect the
interest of the Trustee in the Mortgage Loans in the same manner as it currently
protects its own interest in mortgage loans in its own portfolio in any claim,
proceeding or litigation regarding a Mortgage Loan. The Master Servicer is
permitted to make a modification, waiver or amendment of a Mortgage Loan so long
as the modification, waiver or amendment would comply with the general servicing
standard described above, not cause any REMIC to fail to qualify as a REMIC, not
result in the imposition of certain taxes and not extend the due date for a
payment due on the related Mortgage Note for a period greater than 180 days. A
modification, waiver or amendment may initially result in a reduction in the
payments made under a Mortgage Loan, but it is expected that a modification,
waiver or amendment will increase the payments made under the Mortgage Loan over
the life of the Mortgage Loan.

      The Master Servicer may perform any of its obligations under the Pooling
and Servicing Agreement through one or more subservicers (including the Special
Servicer). Notwithstanding any subservicing arrangement, the Master Servicer
will remain liable for its servicing duties and obligations under the Pooling
and Servicing Agreement as if the Master Servicer alone were servicing the
Mortgage Loans.

      The Master Servicer is a party to a Special Sub-Servicing Agreement, dated
as of March 1, 2005 (the "SPECIAL SUB-SERVICING AGREEMENT"), by and among
Countrywide Home Loans, Inc., the Master Servicer, Credit-Based Asset Servicing
and Securitization LLC ("C-BASS"), Sunfish Mortgage Fund Ltd. ("SUNFISH") and
Litton Loan Servicing LP ("LITTON" or the "SPECIAL SERVICER"). The Special
Sub-Servicing Agreement provides for, among other things, the special servicing
by the Special Servicer of mortgage loans included in certain securitization
trusts sponsored by Countrywide Home Loans, Inc. that become sixty or more days
delinquent. As of the Closing Date, the Special Sub-Servicing Agreement will
apply to the securitization transaction contemplated by this prospectus
supplement. As a result, subject to certain exceptions set forth in the Special
Sub-Servicing Agreement, the Special Servicer will be responsible for the
primary servicing of any Mortgage Loan that is sixty or more days delinquent
(each, a "SPECIALLY SERVICED MORTGAGE LOAN"). In addition, once a Mortgage Loan
is transferred to the Special Servicer, that Mortgage Loan will continue to be
primary serviced by the Special Servicer even if it is returned to performing
status. However, as long as either C-BASS or Sunfish owns at least 51% of the
Class CF and Class CV Certificates or of the most subordinate class of any net
interest margin securities secured by the Class CF and Class CV Certificates,
C-BASS or Sunfish, as the case may be, will have the right under the Special
Sub-Servicing Agreement to discontinue the special servicing obligations of the
Special Servicer under the Special Sub-Servicing Agreement with respect to the
securitization transaction contemplated by this prospectus supplement. See "--
The Special Sub-Servicing Agreement" below.


                                      S-41



COUNTRYWIDE HOME LOANS SERVICING LP

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

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

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

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

COUNTRYWIDE HOME LOANS

      Countrywide Home Loans is the sponsor for the transaction and also a
seller. Countrywide Home Loans is a New York corporation and a direct wholly
owned subsidiary of Countrywide Financial Corporation, a Delaware corporation
("COUNTRYWIDE FINANCIAL"). The principal executive offices of Countrywide Home
Loans are located at 4500 Park Granada, Calabasas, California 91302. Countrywide
Home Loans is engaged primarily in the mortgage banking business, and as part of
that business, originates, purchases, sells and services mortgage loans.
Countrywide Home Loans originates mortgage loans through a retail branch system
and through mortgage loan brokers and correspondents nationwide. Mortgage loans
originated by Countrywide Home Loans are principally first-lien, fixed or
adjustable rate mortgage loans secured by single-family residences.

      Countrywide Home Loans has historically sold substantially all the
mortgage loans that it has originated and purchased, generally through
securitizations. Countrywide Home Loans does not always sell mortgage loans
immediately after origination or acquisition, but may decide to sell certain
mortgage loans in later periods as part of its overall management of interest
rate risk. Countrywide Home Loans has been involved in the securitization of
mortgage loans since 1969 when it was approved as a Federal National Mortgage
Association seller/servicer. Countrywide Home Loans reviews the structure of its
securitizations and discusses the structure with the related underwriters.

      Except as otherwise indicated, reference in the remainder of this
prospectus supplement to "COUNTRYWIDE HOME LOANS" should be read to include
Countrywide Home Loans and its consolidated subsidiaries, including Countrywide
Servicing. Countrywide Home Loans services substantially all of the mortgage
loans it originates or


                                      S-42



acquires. In addition, Countrywide Home Loans has purchased in bulk the rights
to service mortgage loans originated by other lenders. Countrywide Home Loans
has in the past and may in the future sell to mortgage bankers and other
institutions a portion of its portfolio of loan servicing rights. As of December
31, 2002, December 31, 2003, December 31, 2004 and December 31, 2005,
Countrywide Home Loans provided servicing for mortgage loans with an aggregate
principal balance of approximately $452.405 billion, $644.855 billion, $838.322
billion and $1,111.090 billion, respectively, substantially all of which were
being serviced for unaffiliated persons. As of December 31, 2005, Countrywide
Home Loans provided servicing for approximately $117.488 billion in credit
blemished mortgage loans (excluding mortgage loans being subserviced by
Countrywide Home Loans).

      Mortgage Loan Production

      The following table sets forth, by number and dollar amount of mortgage
loans, Countrywide Home Loans' residential mortgage loan production for the
periods indicated.



                                                               CONSOLIDATED MORTGAGE LOAN PRODUCTION
                                          -------------------------------------------------------------------------------
                                                          TEN MONTHS                      YEARS ENDED
                                           YEAR ENDED       ENDED                         DECEMBER 31,
                                          FEBRUARY 28,   DECEMBER 31,   -------------------------------------------------
                                              2001           2001          2002         2003         2004         2005
                                          ------------   ------------   ----------   ----------   ----------   ----------
                                                         (DOLLARS IN MILLIONS, EXCEPT AVERAGE LOAN AMOUNT)

Conventional Conforming Loans
  Number of Loans ......................       240,608        504,975      999,448    1,517,743      846,395      809,630
  Volume of Loans ......................  $     34,434   $     76,432   $  150,110   $  235,868   $  138,845   $  167,675
     Percent of Total Dollar Volume ....          50.0%          61.7%        59.6%        54.2%        38.2%        34.1%
Conventional Non-conforming Loans
  Number of Loans ......................        86,600        137,593      277,626      554,571      509,711      826,178
  Volume of Loans ......................  $     11,394   $     22,209   $   61,627   $  136,664   $  140,580   $  225,217
     Percent of Total Dollar Volume ....          16.5%          17.9%        24.5%        31.4%        38.7%        45.9%
FHA/VA Loans
  Number of Loans ......................       118,673        118,734      157,626      196,063      105,562       80,528
  Volume of Loans ......................  $     13,075   $     14,109   $   19,093   $   24,402   $   13,247   $   10,712
     Percent of Total Dollar Volume ....          18.9%          11.4%         7.6%         5.6%         3.6%         2.2%
Prime Home Equity Loans
  Number of Loans ......................       119,045        164,503      316,049      453,817      587,046      683,887
  Volume of Loans ......................  $      4,660   $      5,639   $   11,650   $   18,103   $   30,893   $   42,706
     Percent of Total Dollar Volume ....           6.8%           4.5%         4.6%         4.2%         8.5%         8.7%
Nonprime Mortgage Loans
  Number of Loans ......................        51,706         43,359       63,195      124,205      250,030      278,112
  Volume of Loans ......................  $      5,360   $      5,580   $    9,421   $   19,827   $   39,441   $   44,637
     Percent of Total Dollar Volume ....           7.8%           4.5%         3.7%         4.6%        11.0%         9.1%
Total Loans
  Number of Loans ......................       616,632        969,164    1,813,944    2,846,399    2,298,744    2,678,335
  Volume of Loans ......................  $     68,923   $    123,969   $  251,901   $  434,864   $  363,006   $  490,947
  Average Loan Amount ..................  $    112,000   $    128,000   $  139,000   $  153,000   $  158,000   $  183,000
  Non-Purchase Transactions(1) .........            33%            63%          66%          72%          51%          53%
  Adjustable-Rate Loans(1) .............            14%            12%          14%          21%          52%          52%


___________

(1)   Percentage of total loan production based on dollar volume.

LOAN SERVICING

      The Master Servicer has established standard policies for the servicing
and collection of mortgages. Servicing includes, but is not limited to:

            (a) collecting, aggregating and remitting mortgage loan payments;

            (b) accounting for principal and interest;

            (c) holding escrow (impound) funds for payment of taxes and
                insurance;

            (d) making inspections as required of the mortgaged properties;


                                      S-43



            (e) preparation of tax related information in connection with the
                mortgage loans;

            (f) supervision of delinquent mortgage loans;

            (g) loss mitigation efforts;

            (h) foreclosure proceedings and, if applicable, the disposition of
                mortgaged properties; and

            (i) generally administering the mortgage loans, for which it
                receives servicing fees.

      Billing statements with respect to mortgage loans are mailed monthly by
the Master Servicer. The statement details all debits and credits and specifies
the payment due. Notice of changes in the applicable loan rate are provided by
the Master Servicer to the borrower with these statements.

COLLECTION PROCEDURES

      Credit Blemished Mortgage Loans. When a borrower fails to make a payment
on a credit blemished mortgage loan, the Master Servicer attempts to cause the
deficiency to be cured by corresponding with the borrower. In most cases,
deficiencies are cured promptly. Pursuant to the Master Servicer's servicing
procedures for credit blemished loans, the Master Servicer generally mails to
the borrower a notice of intent to foreclose after the loan becomes 31 days past
due (two payments due but not received) and, generally within 59 days
thereafter, if the loan remains delinquent, institutes appropriate legal action
to foreclose on the mortgaged property. Foreclosure proceedings may be
terminated if the delinquency is cured. Mortgage loans to borrowers in
bankruptcy proceedings may be restructured in accordance with law and with a
view to maximizing recovery of the loans, including any deficiencies.

      Once foreclosure is initiated by the Master Servicer, a foreclosure
tracking system is used to monitor the progress of the proceedings. The system
includes state specific parameters to monitor whether proceedings are
progressing within the time frame typical for the state in which the mortgaged
property is located. During the foreclosure proceeding, the Master Servicer
determines the amount of the foreclosure bid and whether to liquidate the
mortgage loan.

      If foreclosed, the mortgaged property is sold at a public or private sale
and may be purchased by Countrywide Home Loans. After foreclosure, the Master
Servicer may liquidate the mortgaged property and charge-off the loan balance
which was not recovered through liquidation proceeds.

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

FORECLOSURE AND DELINQUENCY EXPERIENCE

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


                                      S-44



      For purposes of the following table:

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

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

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

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



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

Total Portfolio            $  10,499,524,958         100.00%    $  20,666,799,653         100.00%
Delinquency Percentage
    30-59 Days             $     776,262,183           7.39%    $   1,237,075,953           5.99%
    60-89 Days                   272,447,833           2.59           369,166,559           1.79
    90+ Days                     112,192,109           1.07           101,415,871           0.49
                           -----------------     ----------     -----------------     ----------
Sub-Total                  $   1,160,902,125          11.06%    $   1,707,658,383           8.26%
                           -----------------     ----------     -----------------     ----------
Foreclosure Rate           $     277,872,737           2.65%    $     322,166,334           1.56%
Bankruptcy Rate            $     293,013,841           2.79%    $     305,504,468           1.48%




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

Total Portfolio            $  41,677,307,627         100.00%    $  51,901,239,700         100.00%
Delinquency Percentage
    30-59 Days             $   2,672,783,223           6.41%        4,178,866,875           8.05%
    60-89 Days                   833,545,644           2.00         1,466,730,528           2.83
    90+ Days                     316,611,150           0.76         1,025,893,257           1.98
                           -----------------     ----------     -----------------     ----------
Sub-Total                  $   3,822,940,017           9.17%        6,671,490,660          12.85%
                           -----------------     ----------     -----------------     ----------
Foreclosure Rate           $     610,898,746           1.47%          843,053,715           1.62%
Bankruptcy Rate            $     438,848,649           1.05%          570,785,302           1.10%


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

SERVICING COMPENSATION AND PAYMENT OF EXPENSES

      The Master Servicer will be paid a monthly fee (the "MASTER SERVICING
FEE") from collections with respect to each Mortgage Loan other than a Specially
Serviced Mortgage Loan (as well as from any liquidation proceeds or Subsequent
Recoveries) equal to one-twelfth of the Stated Principal Balance thereof
multiplied by the Servicing Fee Rate. The "SERVICING FEE RATE" for each Mortgage
Loan will equal 0.50% per annum. The amount of the monthly Master Servicing Fee
is subject to adjustment with respect to Mortgage Loans that are prepaid in
full, as described in this prospectus supplement under "-- Adjustment to Master
Servicing Fee in Connection with Certain Prepaid Mortgage Loans." The Special
Servicer will be paid a monthly fee (the "SPECIAL SERVICING FEE") from
collections with respect to each Specially Serviced Mortgage Loan (as well as
from any liquidation proceeds or Subsequent Recoveries) equal to one-twelfth of
the Stated Principal Balance thereof multiplied by the Servicing Fee Rate.


                                      S-45



      The Master Servicer is also entitled to receive, as additional servicing
compensation, amounts in respect of interest paid on Principal Prepayments
received during that portion of a Prepayment Period from the related Due Date to
the end of the Prepayment Period ("PREPAYMENT INTEREST EXCESS"), all late
payment fees, assumption fees and other similar charges (excluding prepayment
charges), in each case with respect to the Mortgage Loans other than the
Specially Serviced Mortgage Loans, and all investment income earned on amounts
on deposit in the Certificate Account and Distribution Account. The Master
Servicer is obligated to pay certain ongoing expenses associated with the
Mortgage Loans and incurred by the Trustee in connection with its
responsibilities under the Pooling and Servicing Agreement. The Special Servicer
is also entitled to receive, as additional servicing compensation, Prepayment
Interest Excess, all late payment fees, assumption fees and other similar
charges (excluding prepayment charges), in each case with respect to the
Specially Serviced Mortgage Loans, and all investment income earned on amounts
on deposit in the Special Servicing Account.

ADJUSTMENT TO MASTER SERVICING FEE IN CONNECTION WITH CERTAIN PREPAID MORTGAGE
LOANS

      When a borrower prepays all or a portion of a Mortgage Loan between
scheduled monthly payment dates ("DUE DATES"), the borrower pays interest on the
amount prepaid only to the date of prepayment. Principal Prepayments which are
received during that portion of the Prepayment Period from the related Due Date
in the Prepayment Period to the end of the Prepayment Period reduce the
Scheduled Payment of interest for the following Due Date but are included in a
distribution that occurs on or prior to the distribution of the Scheduled
Payment, and accordingly no shortfall in interest otherwise distributable to
holders of the Certificates results. Conversely, Principal Prepayments received
from that portion of the Prepayment Period from the beginning of the Prepayment
Period to related Due Date in that Prepayment Period reduce the Scheduled
Payment of interest for that Due Date and are included in a distribution that
occurs on or after the distribution of the Scheduled Payment, and accordingly an
interest shortfall (a "PREPAYMENT INTEREST SHORTFALL") could result. In order to
mitigate the effect of any Prepayment Interest Shortfall on interest
distributions to holders of the Certificates on any Distribution Date, one-half
of the amount of the Master Servicing Fee otherwise payable to the Master
Servicer for the month (calculated as if the Master Servicing Fee were payable
to the Master Servicer with respect to all of the Mortgage Loans rather than
only those Mortgage Loans that are not Specially Serviced Mortgage Loans) will,
to the extent of the Prepayment Interest Shortfall, be deposited by the Master
Servicer in the Certificate Account for distribution to holders of the
Certificates entitled thereto on the Distribution Date. The amount of this
deposit by the Master Servicer is referred to as "COMPENSATING INTEREST" and
will be reflected in the distributions to holders of the Certificates entitled
thereto made on the Distribution Date on which the Principal Prepayments
received would be distributed.

ADVANCES

      Subject to the following limitations, on the Business Day prior to each
Distribution Date, the Master Servicer will be required to advance (an
"ADVANCE") from its own funds, or funds in the Certificate Account that are not
required to be distributed on the Distribution Date, on the Business Day
immediately preceding the Distribution Date (a "MASTER SERVICER ADVANCE DATE"),
the sum of:

  o   an amount equal to the aggregate of payments of principal and interest on
      the Mortgage Loans (with the Mortgage Rate adjusted to a rate equal to the
      Mortgage Rate minus the Servicing Fee Rate (as so adjusted, the "NET
      MORTGAGE RATE")) that were due on the related Due Date and delinquent on
      the related Determination Date; and

  o   an amount equivalent to interest (adjusted to the Net Mortgage Rate)
      deemed due on each Mortgage Loan (i) as to which the related Mortgaged
      Property has been acquired by the Master Servicer through foreclosure or
      deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan
      ("REO PROPERTY"), which is calculated after taking into account any rental
      income from such Mortgaged Property or (ii) as to which the related
      Mortgaged Property has been liquidated but as to that Mortgage Loan a
      Final Recovery Determination has not been made.

      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. The Master Servicer is obligated to make Advances to


                                      S-46



the extent that those Advances are, in its judgment, reasonably recoverable from
future payments and collections or insurance payments or proceeds of liquidation
of the related Mortgage Loan. If the Master Servicer determines on any
Determination Date to make an Advance, that Advance will be included with the
distribution to holders of the Certificates on the related Distribution Date.
Any failure by the Master Servicer to make an Advance as required under the
Pooling and Servicing Agreement will constitute an event of default thereunder,
in which case the Trustee, as successor master servicer, or any other entity
that is appointed as successor master servicer, will be obligated to make
Advances in accordance with the terms of the Pooling and Servicing Agreement. An
Advance will be reimbursed from the payments on the Mortgage Loan with respect
to which the Advance was made. However, if an Advance is determined to be
nonrecoverable and the Master Servicer delivers an officer's certificate to the
Trustee indicating that the Advance is nonrecoverable, the Master Servicer will
be entitled to withdraw from the Certificate Account an amount equal to the
nonrecoverable Advance. Reimbursement for Advances and nonrecoverable Advances
will be made prior to distributions on the Certificates.

      The Special Sub-Servicing Agreement provides that the Special Servicer
will be obligated to make Advances to the Master Servicer with respect to the
Specially Serviced Mortgage Loans in accordance with the provisions of the
Pooling and Servicing Agreement and will have comparable rights with respect to
reimbursement of those Advances.

CERTAIN MODIFICATIONS AND REFINANCINGS

      Countrywide Home Loans will be permitted under the Pooling and Servicing
Agreement to solicit borrowers for reductions to the Mortgage Rates of their
respective Mortgage Loans. If a borrower requests such a reduction, the Master
Servicer will be permitted to agree to the rate reduction provided that (i)
Countrywide Home Loans purchases the Mortgage Loan from the Trust Fund
immediately following the modification and (ii) the Stated Principal Balance of
such Mortgage Loan, when taken together with the aggregate of the Stated
Principal Balances of all other Mortgage Loans in the same Loan Group that have
been so modified since the Closing Date at the time of those modifications, does
not exceed an amount equal to 5% of the aggregate Certificate Principal Balance
of the related Certificates. Any purchase of a Mortgage Loan subject to a
modification will be for a price equal to 100% of the Stated Principal Balance
of that Mortgage Loan, plus accrued and unpaid interest on the Mortgage Loan up
to the next Due Date at the applicable Net Mortgage Rate, net of any
unreimbursed Advances of principal and interest on the Mortgage Loan made by the
Master Servicer. Countrywide Home Loans will remit the purchase price to the
Master Servicer for deposit into the Certificate Account within one Business Day
of the purchase of that Mortgage Loan. Purchases of Mortgage Loans may occur
when prevailing interest rates are below the Mortgage Rates on the Mortgage
Loans and borrowers request modifications as an alternative to refinancings.
Countrywide Home Loans will indemnify the Trust Fund against liability for any
prohibited transactions taxes and related interest, additions or penalties
incurred by any REMIC as a result of any modification or purchase.

LITTON LOAN SERVICING LP

      The information set forth in the following paragraphs has been provided by
Litton Loan Servicing LP ("LITTON").

      Litton, a Delaware limited partnership and a wholly owned subsidiary of
Credit-Based Asset Servicing and Securitization LLC ("C-BASS"), will act as the
Special Servicer of the Mortgage Loans pursuant to the Pooling Agreement. The
Special Servicer was formed in December 1996. As of September 30, 2005, the
Special Servicer employed approximately 831 individuals. The main office of the
Special Servicer is located at 4828 Loop Central Drive, Houston, Texas 77081.
The Special Servicer is currently a Fannie Mae and Freddie Mac approved servicer
and an approved FHA and VA lender. The aggregate principal balance of the
Special Servicer's servicing portfolio equaled approximately $36.46 billion as
of September 30, 2005, $33.68 billion as of December 31, 2004 and $17.63 billion
as of December 31, 2003. Most of the mortgage loans in the Special Servicer's
servicing portfolio are either subprime mortgage loans or subperforming mortgage
loans. The Special Servicer is servicing in excess of 200 securitizations for
C-BASS and various third parties.

      Fitch assigned the Special Servicer its RSS1 residential special servicer
rating on November 16, 1999 and reaffirmed that rating in August 2005. The
rating is based on the Special Servicer's ability to manage and liquidate
nonperforming residential mortgage loans and real estate owned assets. This RSS1
rating is the highest special


                                      S-47



servicer rating attainable from Fitch which reflects the Special Servicer's
proprietary default management technology, the financial strength of its parent
and the experience of its management and staff.

      In January 2001, Fitch assigned the Special Servicer its RPS1 primary
servicer rating for subprime and high loan to value ratio product and reaffirmed
that rating in August 2005. The RPS1 rating is currently the highest subprime
primary servicer rating attainable from Fitch for any subprime servicer, which
is based on the Special Servicer's loan administration processes including its
loan set up procedures and related technology, loan accounting/cash management
and loan reporting. The RPS1 rating for high loan to value ratio product is
based, in part, on the Special Servicer's focus on early collection and loss
mitigation.

      In March 2001, Moody's Investors Service, Inc. assigned the Special
Servicer its top servicer quality rating (SQ1) as a primary servicer of prime
and subprime mortgage loans, second liens and as a special servicer and
reaffirmed that rating in November 2005. The rating is based on the Special
Servicer's ability as a servicer and the stability of its servicing operations.

      In April 2001, S&P raised the Special Servicer's ranking from "Above
Average" to "Strong" for both its residential special and subprime servicing
categories and reaffirmed that rating in April 2004. The "Strong" rating is
S&P's highest possible rating for these categories. The rankings are based on
the Special Servicer's established history of servicing distressed assets for a
diverse investor base, technological improvements that have increased
operational efficiencies, management depth, and internal controls.

      As of the date of this prospectus supplement, each of the ratings
described above remains in effect with respect to the Special Servicer.

      From time to time the Special Servicer may acquire servicing portfolios
from third parties which acquisitions may be significant in relation to the
Special Servicer's current portfolio. The Special Servicer does not believe that
any such acquisition, if effected, would have an adverse effect on its ability
to service the mortgage loans in accordance with the Pooling Agreement.

      On December 1, 2004, the Special Servicer and C-BASS closed a transaction
with The Provident Bank, pursuant to which the Special Servicer acquired the
mortgage servicing rights on a portfolio of mortgage loans with an aggregate
principal balance of approximately $8.5 billion in conjunction with C-BASS's
acquisition of residual mortgage-backed securities relating to certain of such
loans.

      The Special Servicer utilizes its proprietary technology to identify high
severity assets and develops specific loss mitigation strategies to apply to
those assets. As mortgage loans become delinquent, the Special Servicer first
tries to determine whether the mortgagor is facing a short term or long term
series of issues that created the default. If the default is created by a short
term issue, repayment plans or forbearance agreements may be negotiated so that
the default can be cured over the plan's specified period. However, if a long
term issue exists, the mortgage loan is referred to the Special Servicer's loss
mitigation department. If the mortgagor has experienced a long-term event but
wishes to continue to reside in the home, a modification of the mortgage loan
may be pursued. The modification may include some or all of the following: a
decrease in the mortgage interest rate, an extension of the term of the
mortgage, a reduction in certain amounts owed (including unpaid principal or
advances) and/or the capitalization of any past due amounts. Any modification
will be done in accordance with the applicable terms of the Pooling and
Servicing Agreement. Consistent with the terms of the Pooling and Servicing
Agreement, the Special Servicer may waive, modify or vary any term of any
mortgage loan or consent to the postponement of strict compliance with any such
term or in any manner grant indulgence to any borrower if in the Special
Servicer's reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the certificateholders.
If the borrower either does not want to make or does not have the ability to
make monthly payments on the mortgage loan, the Special Servicer will attempt to
pursue programs such as short sales or a deed in lieu of foreclosure. These
programs are designed to assist the borrower in liquidating the mortgaged
property while decreasing the Special Servicer's liquidation timeframe and the
associated liquidation expenses with the goal of ultimately reducing cumulative
losses. The Special Servicer has a default processing in source agreement for
contract employees to perform certain routine foreclosure, bankruptcy, and other
default related functions under the supervision of the Special Servicer's
management personnel.


                                      S-48



      There have been no material changes to the Special Servicer's servicing
policies and procedures during the past three years. During such time, the
Special Servicer also has not been terminated as a servicer in a residential
mortgage loan securitization due to a servicing default or application of a
servicing performance test or trigger, has not failed to make any required
advance with respect to any issuance of residential mortgage backed securities
and has not disclosed material noncompliance with the servicing criteria
applicable to any such securitization.

      Delinquency and Foreclosure Experience.

      The following table sets forth the delinquency and foreclosure experience
of the mortgage loans the Special Servicer serviced as of the dates indicated.
The Special Servicer's portfolio of mortgage loans may differ significantly from
the Mortgage Loans in the Mortgage Pool in terms of interest rates, principal
balances, geographic distribution, types of properties and other possibly
relevant characteristics. There can be no assurance, and no representation is
made, that the delinquency and foreclosure experience with respect to the
Mortgage Loans in the Mortgage Pool will be similar to that reflected in the
table below, nor is any representation made as to the rate at which losses may
be experienced on liquidation of defaulted Mortgage Loans in the Mortgage Pool.
The actual delinquency experience on the Mortgage Loans in the Mortgage Pool
will depend, among other things, upon the value of the real estate securing such
Mortgage Loans in the Mortgage Pool and the ability of the related borrower to
make required payments. It should be noted that the Special Servicer's business
includes the acquisition of servicing rights with respect to non performing and
subperforming mortgage loans and the Special Servicer has been an active
participant in the market for such servicing rights since 1997, although the
amount of such acquisitions (as a percentage of aggregate acquisitions) has
decreased in the past few years. The acquisition of such servicing rights may
have affected the delinquency and foreclosure experience of the Special
Servicer.

                    DELINQUENCY AND FORECLOSURE EXPERIENCE(1)



                                     As of September 30, 2005                 As of December 31, 2004
                              --------------------------------------   --------------------------------------
                                                             % by                                     % by
                               No. of       Principal      Principal    No. of       Principal      Principal
                               Loans       Balance(2)       Balance     Loans       Balance(2)       Balance
                              --------   ---------------   ---------   --------   ---------------   ---------

Period of Delinquency(3)       213,579   $28,558,941,190       78.33%   209,161   $25,418,836,059       75.47%

30-59 Days                      28,034     3,232,696,960        8.87%    30,872     3,366,957,309       10.00%
60-89 Days                      11,329     1,254,539,329        3.44%    13,627     1,435,281,813        4.26%
90 Days or more                  9,185       999,843,025        2.74%     9,483       924,532,429        2.74%
                              --------   ---------------   ---------   --------   ---------------   ---------
Total Delinquency               48,548   $ 5,487,079,314       15.05%    53,982   $ 5,726,771,551       17.00%
                              ========   ===============   =========   ========   ===============   =========

Foreclosure/bankruptcies(4)     18,722     1,891,812,884        5.19%    21,085   $ 1,990,423,865        5.91%

Real Estate Owned                5,568       523,076,605        1.43%     6,236       544,216,985        1.62%
                              --------   ---------------   ---------   --------   ---------------   ---------
Total Portfolio                286,417   $36,460,909,993      100.00%   290,464   $33,680,248,460      100.00%
                              ========   ===============   =========   ========   ===============   =========


                                     As of December 31, 2003
                              --------------------------------------
                                                             % by
                               No. of       Principal      Principal
                               Loans       Balance(2)       Balance
                              --------   ---------------   ---------

Period of Delinquency(3)       117,507   $12,259,524,842       69.54%

30-59 Days                      19,576     1,846,650,352       10.47%
60-89 Days                       8,097       759,456,004        4.31%
90 Days or more                  6,576       544,508,354        3.09%
                              --------   ---------------   ---------
Total Delinquency               34,249   $ 3,150,614,710       17.87%
                              ========   ===============   =========

Foreclosure/bankruptcies(4)     19,954   $ 1,807,441,681       10.25%

Real Estate Owned                4,611       411,683,483        2.34%
                              --------   ---------------   ---------
Total Portfolio                176,321   $17,629,264,716      100.00%
                              ========   ===============   =========


_________________
(1)   The table shows mortgage loans which were delinquent or for which
foreclosure proceedings had been instituted as of the date indicated.

(2)   For the Real Estate Owned properties, the principal balance is at the time
of foreclosure.

(3)   No mortgage loan is included in this section of the table as delinquent
until it is 30 days past due.

(4)   Exclusive of the number of loans and principal balance shown in Period of
Delinquency.

      It is unlikely that the delinquency experience of the Mortgage Loans
comprising the Mortgage Pool will correspond to the delinquency experience of
the Special Servicer's mortgage loan portfolio set forth in the foregoing table.
The statistics shown above represent the delinquency experience for the Special
Servicer's mortgage loan servicing portfolio only for the periods presented,
whereas the aggregate delinquency experience on the Mortgage Loans comprising
the Mortgage Pool will depend on the results obtained over the life of the
Mortgage Pool. There can be no assurance that the Mortgage Loans comprising the
Mortgage Pool will perform consistently with the delinquency or foreclosure
experience described in this prospectus supplement. It should be noted that if
the residential real estate market should experience an overall decline in
property values, the actual rates of delinquencies and foreclosures could be
higher than those previously experienced by the Special Servicer. In addition,
adverse economic conditions may affect the timely payment by borrowers of
scheduled payments of


                                      S-49



principal and interest on the Mortgage Loans in the Mortgage Pool and,
accordingly, the actual rates of delinquencies and foreclosures with respect to
the Mortgage Pool.

THE SPECIAL SUB-SERVICING AGREEMENT

      General.

      The following is a summary of the material terms of the Special
Sub-Servicing Agreement to the extent that such terms are not described
elsewhere in this prospectus supplement. The Special Sub-Servicing Agreement
will be filed with the SEC as an exhibit to a Current Report on Form 8-K after
the Closing Date.

      The Special Sub-Servicing Agreement provides that the Special Servicer
will be obligated to service the Specially Serviced Mortgage Loans in accordance
with the provisions of the Pooling and Servicing Agreement. The Special Servicer
will be obligated to establish a separate account (the "SPECIAL SERVICING
ACCOUNT") into which collections in respect of the Specially Serviced Mortgage
Loans are required to be deposited. The Special Servicing Account must be
maintained with a depository institution meeting the same guidelines that are
set forth in the Pooling and Servicing Agreement with respect to the Certificate
Account. Moreover, the Special Servicer will be required to make such deposits
into the Special Servicing Account, and will be permitted to make such
withdrawals from the Special Servicing Account, as are permitted by the Pooling
and Servicing Agreement with respect to the Certificate Account. The Special
Servicer will also be required to establish escrow accounts with respect to the
Specially Serviced Mortgage Loans to the extent that the Master Servicer would
otherwise be required to do so under the Pooling and Servicing Agreement.

      The Special Servicer will be required to remit to the Master Servicer on
the 18th day of each month (or, if the 18th day is not a business day, on the
preceding business day) those amounts collected with respect to the Specially
Serviced Mortgage Loans that the Master Servicer is obligated to remit to the
Trustee with respect to those Mortgage Loans with respect to the Distribution
Date occurring in that calendar month. In addition, the Special Servicer will be
required to remit to the Master Servicer any Insurance Proceeds, Liquidation
Proceeds and principal prepayments to the Master Servicer within 5 days of the
Special Servicer's receipt thereof, together with a report relating to that
remittance in such detail as may be required to allow the Master Servicer to
deliver on a timely basis all information that the Master Servicer is required
to deliver to the Trustee under the Pooling and Servicing Agreement.

      The Special Sub-Servicing Agreement provides that the Special Servicer is
obligated to provide to the Master Servicer reports in a form and in such detail
as may be required by the Master Servicer in order to properly account for, and
apply, all funds remitted to the Master Servicer under the Special Sub-Servicing
Agreement and permit compliance by the Master Servicer with its obligations
under the Pooling and Servicing Agreement.

      In connection with the transfer of servicing of any Specially Serviced
Mortgage Loan to the Special Servicer, the Special Servicer will be obligated to
reimburse the Master Servicer for any previously unreimbursed Master Servicing
Fees and Advances with respect to that Specially Serviced Mortgage Loan, upon
such reimbursement the Special Servicer will have the right to be reimbursed for
those items as and when provided by the Pooling and Servicing Agreement.

      The Special Sub-Servicing Agreement may be amended by the parties thereto.

      Special Servicer Events of Default and Early Termination Events.

      The Special Sub-Servicing Agreement provides that the Master Servicer will
have the right, immediately upon written notice, to terminate the Special
Servicer's right and obligation to service the Specially Serviced Mortgage Loans
upon the occurrence of one or more of the following events (each, a "SPECIAL
SERVICER EVENT OF DEFAULT"):

            (1)   any failure by the Special Servicer to remit to the Master
      Servicer for distribution to certificateholders any payment (including,
      without limitation, any failure to make any required Advance)


                                      S-50



      required to be made under the terms of the Special Sub-Servicing Agreement
      or the Pooling and Servicing Agreement which continues unremedied for a
      period of one day after the date upon which written notice of the failure
      shall have been given to the Special Servicer by the Master Servicer,

            (2)   any failure on the part of the Special Servicer duly to
      observe or perform in any material respect any other of the covenants or
      agreements in the Pooling and Servicing Agreement which continues
      unremedied for the period of time, if any, in which the breach must be
      cured,

            (3)   any failure on the part of the Special Servicer duly to
      observe or perform in any material respect any other of the covenants or
      agreements contained in the Special Sub-Servicing Agreement (including any
      breach of a representation or warranty contained in the Special
      Sub-Servicing Agreement which materially and adversely affects the
      interests of the certificateholders) which continues unremedied for a
      period of 30 days after the date upon which written notice of the failure
      shall have been given to the Special Servicer by the Master Servicer,

            (4)   a decree or order of a court or agency or supervisory
      authority having jurisdiction in an involuntary case under any present or
      future federal or state bankruptcy, insolvency or similar law or the
      appointment of a conservator or receiver or liquidator in any insolvency,
      readjustment of debt, marshalling of assets and liabilities or similar
      proceedings, or for the winding-up or liquidation of its affairs, shall
      have been entered against the Special Servicer and the decree or order
      shall have remained in force undischarged or unstayed for a period of 60
      consecutive days,

            (5)   the Special Servicer shall consent to the appointment of a
      conservator or receiver or liquidator in any insolvency, readjustment of
      debt, marshalling of assets and liabilities or similar proceedings of or
      relating to the Special Servicer or of or relating to all or substantially
      all of its property, or

            (6)   the Special Servicer shall admit in writing its inability to
      pay its debts generally as they become due, file a petition to take
      advantage of or otherwise voluntarily commence a case or proceeding under
      any applicable bankruptcy, insolvency, reorganization or other similar
      statute, make an assignment for the benefit of its creditors, or
      voluntarily suspend payment of its obligations.

      If a Special Servicer Event of Default occurs, then, upon receipt of
written notice from the Master Servicer, the Special Servicer will be required
to immediately remit to the Master Servicer all collections with respect to the
Specially Serviced Mortgage Loans that are in its possession, and the rights of
the Special Servicer to perform the special servicing of the Specially Serviced
Mortgage Loans will terminate. The Special Servicer is required to cooperate
with the Master Servicer to effect the transfer of the servicing of the
Specially Serviced Mortgage Loans to the Master Servicer.

      It will be an early termination event under the Special Sub-Servicing
Agreement upon the earliest to occur of the following three events:

            (1)   neither C-BASS nor Sunfish owns at least 51% of the Class CF
      and Class CV Certificates or the most subordinate class of any net
      interest margin securities secured by the Class CF and Class CV
      Certificates,

            (2)   the date on which a Rating Agency downgrades one or more
      classes of certificates as a result of the transfer of the special
      servicing rights to the Special Servicer pursuant to the Special
      Sub-Servicing Agreement, or

            (3)   the termination of Countrywide Servicing as the Master
      Servicer under the Pooling and Servicing Agreement.

      At any time following the occurrence of an early termination event
described in clause (1) or (2) of the preceding sentence, no Mortgage Loan that
is not a Specially Serviced Mortgage Loan will be deemed to be a


                                      S-51



Specially Serviced Mortgage Loan pursuant to the Special Sub-Servicing
Agreement, and Countrywide Home Loans, Inc. or Countrywide Servicing will have
the option to terminate the Special Servicer's right to service any Specially
Serviced Mortgage Loan upon at least 15 days' prior written notice to the
Special Servicer. Upon the occurrence of an early termination event described in
clause (3) of the second preceding sentence, the Special Servicer's right to
service the Specially Serviced Mortgage Loans will terminate immediately.

      Upon any termination of the Special Servicer's rights and obligations to
service any Specially Serviced Mortgage Loan, the Master Servicer will be
required to reimburse the Special Servicer for any Advances and Special
Servicing Fees owing to it.

      Resignation.

      The Special Servicer is not permitted to resign from its obligations and
duties under the Special Sub-Servicing Agreement except upon a determination
that its duties thereunder are no longer permissible under applicable law. In
the event of any such resignation, C-BASS or Sunfish will appoint a successor to
the Special Servicer with the written consent of the Master Servicer, which
consent may not be unreasonably withheld. The successor special servicer must
have the characteristics set forth in clauses (i) and (ii) of the following
paragraph and will succeed to all rights and assume all of the responsibilities,
duties and liabilities of the predecessor Special Servicer under the Special
Sub-Servicing Agreement simultaneously with the termination of the predecessor
Special Servicer's responsibilities, duties and liabilities thereunder. The
removal of the Special Servicer will not become effective until a successor is
appointed.

      Any successor Special Servicer must (i) be an institution having a net
worth of not less than $1,000,000, and (ii) have and keep in full effect its
existence, rights and franchises as a corporation (or such other corporate
form), and shall obtain its qualification to do business as a foreign
corporation (or such other corporate form) in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of the Special Sub-Servicing Agreement or any of the Specially
Serviced Mortgage Loans and to perform its duties under the Special
Sub-Servicing Agreement. Any successor appointed must execute, acknowledge and
deliver the Master Servicer an instrument accepting such appointment, wherein
the successor will make the representations and warranties set forth in the
Special Sub-Servicing Agreement, whereupon the successor shall become fully
vested with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Special Servicer under the Special Sub-Servicing Agreement.

      Within 30 days of the appointment of a successor special servicer, the
predecessor Special Servicer will be required to prepare, execute and deliver to
the successor entity any and all documents and other instruments, place in such
successor's possession all servicing files related to the Specially Serviced
Mortgage Loans, and do or cause to be done all other acts or things necessary or
appropriate to effect the purposes of the notice of termination. The predecessor
Special Servicer will be required to cooperate with the successor in effecting
the termination of the predecessor Special Servicer's responsibilities and
rights hereunder and the transfer of servicing responsibilities to the successor
special servicer, including without limitation, the transfer to such successor
of all amounts received by it with respect to the Specially Serviced Mortgage
Loans.

      Review of Special Servicing Activities.

      Countrywide Home Loans, Inc., the Master Servicer, C-BASS and Sunfish have
the right under the Special Sub-Servicing Agreement to review any and all of the
books, records, or other information of the Special Servicer which may be
relevant to the sub-servicing the Specially Serviced Mortgage Loans in
accordance with the terms of the Special Sub-Servicing Agreement and the Pooling
and Servicing Agreement. In order to discuss such books, records or other
information, the Special Servicer is required to make personnel available who
are knowledgeable about such matters.

      Indemnification.

      Each of the parties to the Special Sub-Servicing Agreement is required to
defend, indemnify and hold the other parties thereto harmless from and against
any and all claims, losses, damages, penalties, fines, forfeitures,


                                      S-52



reasonable and necessary legal fees and related costs, judgments, and any other
costs, fees and expenses (individually and collectively, the "CLAIMS") that the
indemnified party may sustain as a result of the breach by any indemnifying
party of the indemnifying party's obligations under the terms of the Special
Sub-Servicing Agreement. However, the obligation of the Special Servicer to
indemnify for losses arising from or incurred in connection with the servicing
of Specially Serviced Mortgage Loans (including REO Property) will be determined
in accordance with the indemnification standards applicable to the Master
Servicer under the Pooling and Servicing Agreement. In addition, none of the
parties to the Special Sub-Servicing Agreement or any of their respective
directors, officers, employees or agents will be liable for any action taken or
for refraining from the taking of any action in good faith pursuant to the
Special Sub-Servicing Agreement, or for errors in judgment. Notwithstanding the
foregoing, in the event that the Master Servicer is required to indemnify the
Trust pursuant to the terms of the Pooling and Servicing Agreement for Claims
arising from or incurred in connection with the servicing of a Specially
Serviced Mortgage Loan (including an REO Property) on or after the date such
Mortgage Loan was transferred to the Special Servicer, the Special Servicer is
required to indemnify and hold the Master Servicer harmless with respect to
those Claims. The Special Servicer is required to defend, indemnify and hold
Countrywide Home Loans, Inc. and the Master Servicer harmless from and against
any and all Claims that they may sustain in any way related to any negligence,
willful misconduct, or any action taken by, or failure to act on the part of the
Special Servicer in connection with the performance of the sub-servicing
activities pursuant to the Special Sub-Servicing Agreement. To the extent that
the Master Servicer is required to indemnify the Special Servicer pursuant to
the foregoing and the Master Servicer is entitled to reimbursement from the
Trust pursuant to the Pooling and Servicing Agreement, the Master Servicer is
expected to seek reimbursement from the Trust for the indemnities payable to the
Special Servicer. See "Description of the Certificates -- Certain Matters
related to the Master Servicer, the Depositor, the Sellers and the NIM Insurer"
in this prospectus supplement.

      Pursuant to the Special Sub-Servicing Agreement, Countrywide Home Loans,
Inc. and the Master Servicer have agreed to indemnify and hold harmless C-BASS
and Sunfish against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses (including the reasonable cost of
investigating and defending against any claims therefor) that are directly
related to or arise from a breach of any one of certain representation and
warranties set forth in the Pooling and Servicing Agreement and specified in the
Special Sub-Servicing Agreement relating to compliance with applicable laws in
the origination of a Mortgage Loan.

                               THE ISSUING ENTITY

      In connection with the issuance of the Certificates, the Depositor has
formed CWABS Asset-Backed Certificates Trust 2006-1, a common law trust created
under the laws of the State of New York pursuant to the Pooling and Servicing
Agreement. CWABS Asset-Backed Certificates Trust 2006-1 is referred to in this
prospectus supplement as the "ISSUING ENTITY" and is referred to in the
prospectus as the "TRUST" or the "TRUST FUND." The Trustee serves as trustee of
the issuing entity and acts on behalf of the issuing entity as the issuing
entity does not have any directors, officers or employees. The fiscal year end
of the issuing entity is December 31.

      The issuing entity's activities are limited to the transactions and
activities entered into in connection with the securitization described in this
prospectus supplement, and except for those activities, the issuing entity is
not authorized and has no power to borrow money or issue debt, merge with
another entity, reorganize, liquidate or sell assets or engage in any business
or activities. Consequently, the issuing entity is not permitted to hold any
assets, or incur any liabilities, other than those described in this prospectus
supplement. Since the issuing entity is created pursuant to the Pooling and
Servicing Agreement, the issuing entity and its permissible activities can only
be amended or modified by amending the Pooling and Servicing Agreement.

      Since the issuing entity is a common law trust, it may not be eligible for
relief under the federal bankruptcy laws, unless it can be characterized as a
"business trust" for purposes of the federal bankruptcy laws. Bankruptcy courts
look at various considerations in making this determination, so it is not
possible to predict with any certainty whether or not the issuing entity would
be characterized as a "business trust."


                                      S-53



                                STATIC POOL DATA

      Certain static pool data with respect to the delinquency, cumulative loss
and prepayment data for Countrywide Home Loans is available online at
http://www.countrywidedealsdata.com?CWDD=02200602. This static pool data is not
deemed part of the prospectus or the registration statement of which the
prospectus is a part to the extent that the static pool data relates to:

      o     prior securitized pools of Countrywide Home Loans that do not
            include the Mortgage Loans and that were established before January
            1, 2006; or

      o     in the case of information regarding the Mortgage Loans, information
            about the Mortgage Loans for periods before January 1, 2006.

                         DESCRIPTION OF THE CERTIFICATES

GENERAL

      The Certificates will be issued pursuant to the Pooling and Servicing
Agreement. We summarize below the material terms and provisions pursuant to
which the Certificates will be issued. The summaries are subject to, and are
qualified in their entirety by reference to, the provisions of the Pooling and
Servicing Agreement. When particular provisions or terms used in the Pooling and
Servicing Agreement are referred to, the actual provisions (including
definitions of terms) are incorporated by reference. We will file a final copy
of the Pooling and Servicing Agreement after the issuing entity issues the
Certificates.

      The CWABS, Inc., Asset-Backed Certificates, Series 2006-1 (the
"CERTIFICATES") will consist of: Class AF-1, Class AF-2, Class AF-3, Class AF-4,
Class AF-5, Class AF-6, Class MF-1, Class MF-2, Class MF-3, Class MF-4, Class
MF-5, Class MF-6, Class MF-7, Class MF-8, Class BF, Class AV-1, Class AV-2,
Class AV-3, Class MV-1, Class MV-2, Class MV-3, Class MV-4, Class MV-5, Class
MV-6, Class MV-7, Class MV-8, Class BV, Class A-R, Class PF, Class PV, Class CF
and Class CV Certificates.

      When describing the Certificates in this prospectus supplement we use the
following terms:



                DESIGNATION                                                   CLASS OF CERTIFICATES
-------------------------------------------   --------------------------------------------------------------------------------------

CLASS AF CERTIFICATES:                        Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5 and Class AF-6 Certificates

FIXED RATE SUBORDINATE CERTIFICATES:          Class MF-1, Class MF-2, Class MF-3, Class MF-4, Class MF-5, Class MF-6, Class MF-7,
                                              Class MF-8 and Class BF Certificates

CLASS AV CERTIFICATES:                        Class AV-1, Class AV-2 and Class AV-3 Certificates

ADJUSTABLE RATE SUBORDINATE CERTIFICATES:     Class MV-1, Class MV-2, Class MV-3, Class MV-4, Class MV-5, Class MV-6, Class MV-7,
                                              Class MV-8 and Class BV Certificates

SENIOR CERTIFICATES:                          Class AF, Class AV and Class A-R Certificates

SUBORDINATE CERTIFICATES:                     Fixed Rate Subordinate Certificates and Adjustable Rate Subordinate Certificates

FIXED RATE CERTIFICATES:                      Class AF-2, Class AF-3, Class AF-4, Class AF-5 and Class AF-6 Certificates and Fixed
                                              Rate Subordinate Certificates

ADJUSTABLE RATE CERTIFICATES:                 Class AF-1 and Class AV Certificates and Adjustable Rate Subordinate Certificates

GROUP 1 CERTIFICATES :                        Class AF Certificates and Fixed Rate Subordinate Certificates

GROUP 2 CERTIFICATES OR SWAP CERTIFICATES:    Class AV Certificates and Adjustable Rate Subordinate Certificates

OFFERED CERTIFICATES:                         Class AF, Class MF-1, Class MF-2, Class MF-3, Class MF-4, Class MF-5, Class MF-6,
                                              Class AV, Class MV-1, Class MV-2, Class MV-3, Class MV-4, Class MV-5, Class MV-6,
                                              Class MV-7 and Class AR Certificates



                                      S-54



The Certificates are generally referred to as the following types:



                             CLASS                                            TYPE
---------------------------------------------------------------    ---------------------------

Class AF-1, Class AV-1, Class AV-2, Class AV-3 Certificates:       Senior/Adjustable Rate

Class AF-2, Class AF-3, Class AF-4 and Class AF-5 Certificates:    Senior/Fixed Rate

Class AF-6 Certificates:                                           Senior/Fixed Rate/NAS

Fixed Rate Subordinate Certificates:                               Subordinate/Fixed Rate

Adjustable Rate Subordinate Certificates:                          Subordinate/Adjustable Rate

Class A-R Certificates:                                            Senior/REMIC Residual

Class PF and Class PV Certificates:                                Prepayment Charges

Class CF and Class CV Certificates:                                Residual


      Generally:

      o     distributions of principal and interest on the Class AF Certificates
            and the Fixed Rate Subordinate Certificates will be based on amounts
            available for distribution in respect of the Mortgage Loans in Loan
            Group 1;

      o     distributions of principal and interest on the Class AV Certificates
            and the Adjustable Rate Subordinate Certificates will be based on
            amounts available for distribution in respect of the Mortgage Loans
            in Loan Group 2;

      o     distributions on the Class PF and Class CF Certificates, to the
            extent provided in the Pooling and Servicing Agreement, will be
            based on amounts available for distribution in respect of the
            Mortgage Loans in Loan Group 1;

      o     distributions on the Class PV and Class CV Certificates, to the
            extent provided in the Pooling and Servicing Agreement, will be
            based on amounts available for distribution in respect of the
            Mortgage Loans in Loan Group 2; and

      o     distributions on the Class A-R Certificates, to the extent provided
            in the Pooling and Servicing Agreement, will be based on amounts
            available for distribution in respect of the Mortgage Loans in Loan
            Group 1 and Loan Group 2.

BOOK-ENTRY CERTIFICATES; DENOMINATIONS

      The Offered Certificates (other than the Class A-R Certificates) will be
book-entry certificates (the "BOOK-ENTRY CERTIFICATES"). The Class A-R
Certificates will be issued as two certificates in fully registered certificated
form. Persons acquiring beneficial ownership interests in the Book-Entry
Certificates ("CERTIFICATE OWNERS") may elect to hold their Book-Entry
Certificates through the Depository Trust Company ("DTC") in the United States,
or Clearstream, Luxembourg or the Euroclear System ("EUROCLEAR"), in Europe, if
they are participants of these systems, or indirectly through organizations
which are participants in these systems. Each class of Book-Entry Certificates
will be issued in one or more certificates which equal the aggregate Certificate
Principal Balance of the applicable class of the Book-Entry Certificates and
will initially be registered in the name of Cede & Co., the nominee of DTC.
Beneficial interests in the Book-Entry Certificates may be held in minimum
denominations representing Certificate Principal Balances of $20,000 and
integral multiples of $1,000 in excess thereof. Except as set forth under
"Description of the Securities--Book-Entry Registration of the Securities" in
the prospectus, no person acquiring a beneficial ownership interest in a
Book-Entry Certificate (each, a "BENEFICIAL OWNER") will be entitled to receive
a physical certificate representing the person's beneficial ownership interest
in the Book-Entry Certificate (a "DEFINITIVE CERTIFICATE"). Unless and until
Definitive Certificates are issued, it is anticipated that the only
certificateholder of the Book-Entry Certificates will be Cede & Co., as nominee
of DTC. Certificate Owners will not be certificateholders as that term is used
in the Pooling and Servicing Agreement. Certificate Owners are


                                      S-55



only permitted to exercise their rights indirectly through the participating
organizations that utilize the services of DTC, including securities brokers and
dealers, banks and trust companies and clearing corporations and certain other
organizations ("PARTICIPANTS") and DTC. See "Description of the
Securities--Book-Entry Registration of the Securities" in the prospectus.

GLOSSARY OF TERMS

      The following terms have the meanings shown below to help describe the
cash flow on the Certificates. The definitions are organized based on the
context in which they are most frequently used. However, certain definitions may
be used in multiple contexts.

      General Definitions.

      "ADJUSTED NET MORTGAGE RATE" with respect to each Mortgage Loan means the
Mortgage Rate less the related Expense Fee Rate.

      "BUSINESS DAY" is any day other than:

            (1)   A Saturday or Sunday or

            (2)   A day on which banking institutions in the state of New York
                  or California are required or authorized by law to be closed.

      "CERTIFICATE PRINCIPAL BALANCE" means for any class of Certificates (other
than the Class CF and Class CV Certificates), the aggregate outstanding
principal balance of all Certificates of the class, less:

            (1)   all amounts previously distributed to holders of Certificates
                  of that class as scheduled and unscheduled payments of
                  principal; and

            (2)   the Applied Realized Loss Amounts allocated to the class;

provided, however, that if Applied Realized Loss Amounts have been allocated to
the Certificate Principal Balance of any class of Certificates, the Certificate
Principal Balance thereof will be increased on each Distribution Date after the
allocation of Applied Realized Loss Amounts, sequentially by class in the order
of distribution priority, by the amount of Subsequent Recoveries for the related
Loan Group, collected during the related Due Period (if any) (but not by more
than the amount of the Unpaid Realized Loss Amount for the class); and provided
further, however, that any amounts distributed to one or more classes of Senior
Certificates related to a Loan Group or Loan Groups in respect of Applied
Realized Loss Amounts will be distributed to those classes on a pro rata basis
according to the respective Unpaid Realized Loss Amounts for those classes.

      After any allocation of amounts in respect of Subsequent Recoveries to the
Certificate Principal Balance of a class of Certificates, a corresponding
decrease will be made on the Distribution Date to the Unpaid Realized Loss
Amount for that class or classes. Although Subsequent Recoveries, if any, will
be allocated to increase the Certificate Principal Balance of a class of
Certificates, the Subsequent Recoveries will be included in the applicable
Principal Remittance Amount and distributed in the priority set forth below
under "--Distributions--Distributions of Principal." Therefore these Subsequent
Recoveries may not be used to make any principal payments on the class or
classes of Certificates for which the Certificate Principal Balances have been
increased by allocation of Subsequent Recoveries. Additionally, holders of these
Certificates will not be entitled to any payment in respect of interest that
would have accrued on the amount of the increase in Certificate Principal
Balance for any Accrual Period preceding the Distribution Date on which the
increase occurs.

      "DISTRIBUTION DATE" means the 25th day of each month, or if the 25th day
is not a Business Day, on the first Business Day thereafter, commencing in
February 2006.


                                      S-56



      "DUE PERIOD" means with respect to any Distribution Date, the period
beginning on the second day of the calendar month preceding the calendar month
in which the Distribution Date occurs and ending on the first day of the month
in which the Distribution Date occurs.

      "EXCESS PROCEEDS" with respect to a liquidated Mortgage Loan means the
amount, if any, by which the sum of any Liquidation Proceeds and Subsequent
Recoveries exceed the sum of (i) the unpaid principal balance of the Mortgage
Loan plus (ii) accrued interest on the Mortgage Loan at the Mortgage Rate during
each Due Period as to which interest was not paid or advanced on the Mortgage
Loan.

      "FINAL RECOVERY DETERMINATION" means a determination by the Master
Servicer that it has received all proceeds it expects to receive with respect to
the liquidation of a Mortgage Loan.

      "INSURANCE PROCEEDS" means all proceeds of any insurance policy received
prior to or in connection with a Final Recovery Determination (to the extent
that the proceeds are not applied to the restoration of the property or released
to the borrower in accordance with the Master Servicer's normal servicing
procedures), other than proceeds that represent reimbursement of the Master
Servicer's costs and expenses incurred in connection with presenting claims
under the related insurance policy.

      "LIQUIDATION PROCEEDS" means any Insurance Proceeds and all other net
proceeds received prior to or in connection with a Final Recovery Determination
in connection with the partial or complete liquidation of a Mortgage Loan
(whether through trustee's sale, foreclosure sale or otherwise) or in connection
with any condemnation or partial release of the related Mortgaged Property,
together with the net proceeds received prior to or in connection with a Final
Recovery Determination with respect to any Mortgaged Property acquired by the
Master Servicer by foreclosure or deed in lieu of foreclosure in connection with
a defaulted Mortgage Loan (other than the amount of the net proceeds
representing Excess Proceeds and net of reimbursable expenses).

      "PERCENTAGE INTEREST" with respect to any Certificate, means the
percentage derived by dividing the denomination of the Certificate by the
aggregate denominations of all Certificates of the applicable class.

      "RECORD DATE" means:

            (1)   in the case of the Adjustable Rate Certificates, the Business
      Day immediately preceding the Distribution Date, unless the
      Adjustable-Rate Certificates are no longer book-entry certificates, in
      which case the Record Date will be the last Business Day of the month
      preceding the month of the Distribution Date, and

            (2)   in the case of the Fixed Rate Certificates and the Class A-R
      Certificates, (i) for the first Distribution Date, the Closing Date, and
      (ii) for any other Distribution Date, the last Business Day of the month
      preceding the month of the Distribution Date.

      "SUBSEQUENT RECOVERIES" means, with respect to any Mortgage Loan in
respect of which a Realized Loss was incurred, any proceeds of the type
described in the definitions of "Insurance Proceeds" and "Liquidation Proceeds"
received in respect of the Mortgage Loan after a Final Recovery Determination
(other than the amount of the net proceeds representing Excess Proceeds and net
of reimbursable expenses).

      Definitions related to Interest Calculations and Distributions.

      "ACCRUAL PERIOD" for any Distribution Date and the Adjustable Rate
Certificates, means the period from and including the preceding Distribution
Date (or from and including the Closing Date in the case of the first
Distribution Date) to and including the day prior to the current Distribution
Date, and for the Fixed Rate Certificates, means the calendar month immediately
preceding the month in which the Distribution Date occurs.

      "CURRENT INTEREST" with respect to each class of interest-bearing
certificates and each Distribution Date means the interest accrued at the
Pass-Through Rate for the applicable Accrual Period on the Certificate Principal
Balance of the class immediately prior to the Distribution Date.


                                      S-57



      "EXPENSE FEE RATE" with respect to each Mortgage Loan is equal to the sum
of the Servicing Fee Rate and the Trustee Fee Rate and, with respect to any
Mortgage Loan covered by a lender paid mortgage insurance policy, the related
mortgage insurance premium rate.

      "INTEREST CARRY FORWARD AMOUNT," with respect to each class of
interest-bearing certificates and each Distribution Date, is the excess of:

            (a)   Current Interest for such class with respect to prior
      Distribution Dates over

            (b)   the amount actually distributed to such class with respect to
      interest on prior Distribution Dates.

      "INTEREST DETERMINATION DATE" means for the Adjustable Rate Certificates,
the second LIBOR Business Day preceding the commencement of each Accrual Period.

      "INTEREST FUNDS" means for any Loan Group and any Distribution Date (1)
the Interest Remittance Amount for that Loan Group and the Distribution Date,
less (2) the portion of the Trustee Fee allocable to that Loan Group for the
Distribution Date.

      "INTEREST REMITTANCE AMOUNT" means with respect to each Loan Group and any
Distribution Date:

            (a)   the sum, without duplication, of:

                  (1)   all scheduled interest collected during the related Due
            Period, less the related Master Servicing Fees and Special Servicing
            Fees,

                  (2)   all interest on prepayments, other than Prepayment
            Interest Excess,

                  (3)   all Advances relating to interest,

                  (4)   all Compensating Interest,

                  (5)   all Liquidation Proceeds collected during the related
            Due Period (to the extent that the Liquidation Proceeds relate to
            interest), and

                  (6)   the allocable portion of any Seller Shortfall Interest
            Requirement, less

            (b)   all Advances relating to interest and certain expenses
      reimbursed during the related Due Period,

in each case with respect to the Mortgage Loans in the Loan Group.

      "NET RATE CAP" for each Distribution Date means:

      (i)   with respect to each class of Class AF Certificates and each class
of Fixed Rate Subordinate Certificates, the weighted average Adjusted Net
Mortgage Rate of the Mortgage Loans in Loan Group 1 as of the first day of the
related Due Period (after giving effect to principal prepayments received during
the Prepayment Period that ends during such Due Period) adjusted, in the case of
the Class AF-1 Certificates only, to an effective rate reflecting the
calculation of interest on the basis of the actual number of days elapsed during
the related Accrual Period and a 360-day year, and

      (ii)  with respect to each class of Class AV Certificates and each class
of Adjustable Rate Subordinate Certificates, the weighted average Adjusted Net
Mortgage Rate of the Mortgage Loans in Loan Group 2 as of the first day of the
related Due Period (after giving effect to principal prepayments received during
the Prepayment Period that ends during such Due Period), adjusted to an
effective rate reflecting the calculation of interest on the


                                      S-58



basis of the actual number of days elapsed during the related Accrual Period and
a 360-day year, minus the Swap Adjustment Rate for the Distribution Date.

      "NET RATE CARRYOVER" for a class of interest-bearing certificates on any
Distribution Date means the excess of:

            (1)   the amount of interest that the class would have accrued for
      the Distribution Date had the Pass-Through Rate for that class and the
      related Accrual Period not been calculated based on the applicable Net
      Rate Cap, over

            (2)   the amount of interest the class accrued on the Distribution
      Date based on the applicable Net Rate Cap,

      plus the unpaid portion of this excess from prior Distribution Dates (and
interest accrued thereon at the then applicable Pass-Through Rate, without
giving effect to the applicable Net Rate Cap).

      "PASS-THROUGH MARGIN" for each class of Adjustable Rate Certificates means
the following:

                                                    (1)              (2)
                                                 ----------       ----------
            Class AF-1 ...................         0.130%           0.130%
            Class AV-1 ...................         0.080%           0.160%
            Class AV-2 ...................         0.190%           0.380%
            Class AV-3 ...................         0.300%           0.600%
            Class MV-1 ...................         0.390%           0.585%
            Class MV-2 ...................         0.410%           0.615%
            Class MV-3 ...................         0.440%           0.660%
            Class MV-4 ...................         0.560%           0.840%
            Class MV-5 ...................         0.600%           0.900%
            Class MV-6 ...................         0.660%           0.990%
            Class MV-7 ...................         1.300%           1.950%
            Class MV-8 ...................         1.500%           2.250%
            Class BV .....................         2.250%           3.375%

____________
(1) For each Accrual Period relating to any Distribution Date occurring on or
prior to the Optional Termination Date.

(2) For each Accrual Period relating to any Distribution Date occurring after
the Optional Termination Date.

      "PASS-THROUGH RATE" with respect to each Accrual Period and each class of
Adjustable Rate Certificates means a per annum rate equal to the lesser of:

            (1)   One-Month LIBOR for the Accrual Period (calculated as
      described below under "-- Calculation of One-Month LIBOR") plus the
      Pass-Through Margin for the class and Accrual Period, and

            (2)   the applicable Net Rate Cap for the related Distribution Date.

      "PASS-THROUGH RATE" with respect to each Accrual Period and the Fixed Rate
Certificates means a per annum rate equal to the lesser of:

            (1)   the per annum fixed rate for the class and the Accrual Period
      set forth in the table below and

            (2)   the applicable Net Rate Cap for the related Distribution Date.


                                      S-59



                                                    (1)              (2)
                                                 ----------       ----------
            Class AF-2 ...................         5.281%           5.281%
            Class AF-3 ...................         5.348%           5.348%
            Class AF-4 ...................         5.714%           5.714%
            Class AF-5 ...................         5.884%           6.384%
            Class AF-6 ...................         5.526%           5.526%
            Class MF-1 ...................         5.917%           5.917%
            Class MF-2 ...................         6.016%           6.016%
            Class MF-3 ...................         6.115%           6.115%
            Class MF-4 ...................         6.200%           6.200%
            Class MF-5 ...................         6.200%           6.200%
            Class MF-6 ...................         6.200%           6.200%
            Class MF-7 ...................         6.200%           6.200%
            Class MF-8 ...................         6.200%           6.200%
            Class BF .....................         6.200%           6.200%

____________
(1) For each Accrual Period relating to any Distribution Date occurring on or
prior to the Optional Termination Date.

(2) For each Accrual Period relating to any Distribution Date occurring after
the Optional Termination Date.

      "REFERENCE BANK RATE" with respect to any Accrual Period means the
arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple of
0.03125%) of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest Determination Date to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of all the Adjustable Rate Certificates for the
Accrual Period, provided that at least two Reference Banks provide the rate. If
fewer than two offered rates appear, the Reference Bank Rate will be the
arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple of
0.03125%) of the rates quoted by one or more major banks in New York City,
selected by the Trustee, as of 11:00 a.m., New York City time, on that date for
loans in U.S. dollars to leading European banks for a period of one month in
amounts approximately equal to the aggregate Certificate Principal Balance of
all the Adjustable Rate Certificates for the Accrual Period.

      "LIBOR BUSINESS DAY" means a day on which banks are open for dealing in
foreign currency and exchange in London and New York City.

      "REFERENCE BANKS" means leading banks selected by the Trustee and engaged
in transactions in Eurodollar deposits in the international Eurocurrency market:

            (1)   with an established place of business in London,

            (2)   which have been designated as a Reference Bank by the Trustee
      and

            (3)   which are not controlling, controlled by, or under common
      control with, the Depositor, Countrywide Home Loans, the Master Servicer
      or any successor Master Servicer.

      "SELLER SHORTFALL INTEREST REQUIREMENT" with respect to the Master
Servicer Advance Date in each of February 2006, March 2006 and April 2006 means
the sum of:

            (a)   the product of (1) the excess of the aggregate Stated
      Principal Balance for the Distribution Date of all the Mortgage Loans in
      the Mortgage Pool (including the Subsequent Mortgage Loans, if any) owned
      by the issuing entity at the beginning of the related Due Period, over the
      aggregate Stated Principal Balance for the Distribution Date of the
      Mortgage Loans (including the Subsequent Mortgage Loans, if any) that have
      a scheduled payment of interest due in the related Due Period, and (2) a
      fraction, the numerator of which is the weighted average Net Mortgage Rate
      of all the Mortgage Loans in


                                      S-60



      the Mortgage Pool (including the Subsequent Mortgage Loans, if any)
      (weighted on the basis of the Stated Principal Balances thereof for the
      Distribution Date) and the denominator of which is 12; and

            (b)   the lesser of:

                  (i)   the product of (1) the amount on deposit in the
            Pre-Funding Account at the beginning of the related Due Period, and
            (2) a fraction, the numerator of which is the weighted average Net
            Mortgage Rate of the Mortgage Loans (including Subsequent Mortgage
            Loans, if any) owned by the issuing entity at the beginning of the
            related Due Period (weighted on the basis of the Stated Principal
            Balances thereof for the Distribution Date) and the denominator of
            which is 12; and

                  (ii)  the excess of (x) the sum of the amount of Current
            Interest and Interest Carry Forward Amount due and payable on the
            Fixed Rate Certificates and the Adjustable Rate Certificates for the
            Distribution Date over (y) the sum of (1) Interest Funds (less any
            portion of Interest Funds for Loan Group 2 allocated to the swap
            trust to cover any Net Swap Payment due to the Swap Counterparty
            with respect to such Distribution Date) available to pay the amounts
            specified in clause (b)(ii)(x) of this definition (after giving
            effect to the addition of any amounts in clause (a) of this
            definition of Seller Shortfall Interest Requirement to Interest
            Funds for the Distribution Date) and (2) any Net Swap Payment
            received by the Swap Contract Administrator from the Swap
            Counterparty for the Distribution Date and allocated to the swap
            trust to pay Current Interest and Interest Carry Forward Amounts on
            the Class AV Certificates and the Adjustable Rate Subordinate
            Certificates for the Distribution Date.

      "SWAP ADJUSTMENT RATE" with respect to any Distribution Date is a
fraction, expressed as a percentage, the numerator of which is equal to the sum
of (a) the Net Swap Payment payable to the Swap Counterparty with respect to
such Distribution Date times a fraction, the numerator of which is equal to 360
and the denominator of which is equal to the actual number of days in the
related Accrual Period and (b) any Swap Termination Payment payable to the Swap
Counterparty for the Distribution Date (other than a Swap Termination Payment
due to a Swap Counterparty Trigger Event), and the denominator of which is equal
to the sum of the aggregate Stated Principal Balance of the Mortgage Loans in
Loan Group 2 and the amount on deposit in the Pre-Funding Account in respect of
Loan Group 2.

      "TRUSTEE FEE RATE" means a rate equal to 0.009% per annum.

      Definitions related to Principal Calculations and Distributions.

      "ADJUSTABLE RATE CUMULATIVE LOSS TRIGGER EVENT" with respect to any
Distribution Date on or after the Adjustable Rate Stepdown Date, an Adjustable
Rate Cumulative Loss Trigger Event is in effect if (x) the aggregate amount of
Realized Losses on the Mortgage Loans in Loan Group 2 from the Cut-off Date for
each Mortgage Loan in Loan Group 2 to (and including) the last day of the
related Due Period (reduced by the aggregate amount of any Subsequent Recoveries
related to Loan Group 2 received through the last day of that Due Period)
exceeds (y) the applicable percentage, for the Distribution Date, of the sum of
the aggregate Initial Cut-off Date Principal Balance of the Initial Mortgage
Loans in Loan Group 2 and the original Pre-Funded Amount in respect of Loan
Group 2, as set forth below:



      Distribution Date                      Percentage
      -----------------                      ----------

      February 2008 -- January 2009 .....    1.75% with respect to February 2008, plus an additional 1/12th of
                                             2.00% for each month thereafter through January 2009

      February 2009 -- January 2010 .....    3.75% with respect to February 2009, plus an additional 1/12th of
                                             1.25% for each month thereafter through January 2010



                                      S-61





      Distribution Date                      Percentage
      -----------------                      ----------

      February 2010 -- January 2011 .....    5.00% with respect to February 2010, plus an additional 1/12th of
                                             1.00% for each month thereafter through January 2011

      February 2011 -- January 2012 .....    6.00% with respect to February 2011, plus an additional 1/12th of
                                             0.50% for each month thereafter through January 2012

      February 2012 and thereafter ......    6.50%


      "ADJUSTABLE RATE DELINQUENCY TRIGGER EVENT" with respect to any
Distribution Date on or after the Adjustable Rate Stepdown Date exists if the
Rolling Sixty-Day Delinquency Rate for the outstanding Mortgage Loans in Loan
Group 2 equals or exceeds the product of (x) the Adjustable Rate Senior
Enhancement Percentage for the Distribution Date and (y) the applicable
percentage listed below for the most senior class of outstanding Class AV
Certificates and Adjustable Rate Subordinate Certificates:

                             Class               Percentage
                      -------------------    -------------------

                      AV ................          36.75%
                      MV-1 ..............          45.06%
                      MV-2 ..............          56.76%
                      MV-3 ..............          66.73%
                      MV-4 ..............          79.35%
                      MV-5 ..............          97.85%
                      MV-6 ..............         122.69%
                      MV-7 ..............         161.11%
                      MV-8 ..............         224.64%
                      BV ................         318.99%

      "ADJUSTABLE RATE OVERCOLLATERALIZATION REDUCTION AMOUNT" for any
Distribution Date is an amount equal to the lesser of (i) the Adjustable Rate
Excess Overcollateralization Amount for the Distribution Date and (ii) the
Principal Remittance Amount for Loan Group 2 for the Distribution Date.

      "ADJUSTABLE RATE EXCESS OVERCOLLATERALIZATION AMOUNT" for any Distribution
Date, is the excess, if any, of the Adjustable Rate Overcollateralized Amount
for the Distribution Date over the Adjustable Rate Overcollateralization Target
Amount for the Distribution Date.

      "ADJUSTABLE RATE OC FLOOR" means an amount equal to 0.50% of the sum of
the aggregate Initial Cut-off Date Principal Balance of the Initial Mortgage
Loans in Loan Group 2 and the original Pre-Funded Amount in respect of Loan
Group 2.

      "ADJUSTABLE RATE OVERCOLLATERALIZATION DEFICIENCY AMOUNT" with respect to
any Distribution Date means the amount, if any, by which the Adjustable Rate
Overcollateralization Target Amount exceeds the Adjustable Rate
Overcollateralized Amount on the Distribution Date (after giving effect to
distribution of the Principal Distribution Amount (other than the portion
thereof consisting of the Extra Principal Distribution Amount) for Loan Group 2
on the Distribution Date).

      "ADJUSTABLE RATE OVERCOLLATERALIZATION TARGET AMOUNT" with respect to any
Distribution Date means (a) prior to the Adjustable Rate Stepdown Date, an
amount equal to 2.50% of the sum of the aggregate Initial Cut-off Date Principal
Balance of the Initial Mortgage Loans in Loan Group 2 and the original
Pre-Funded Amount in respect of Loan Group 2 and (b) on or after the Adjustable
Rate Stepdown Date, the greater of (i) an amount equal to 5.00% of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2 for the current
Distribution Date and (ii) the Adjustable Rate OC Floor; provided, however, that
if an Adjustable Rate Trigger Event is in effect on any Distribution Date, the
Adjustable Rate Overcollateralization Target Amount will be the Adjustable Rate
Overcollateralization Target Amount as in effect for the prior Distribution
Date.


                                      S-62



      "ADJUSTABLE RATE OVERCOLLATERALIZED AMOUNT" for any Distribution Date
means the amount, if any, by which (x) the sum of the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 2 for the Distribution Date and any
amount on deposit in the Pre-Funding Account in respect of Loan Group 2 on the
Distribution Date exceeds (y) the sum of the aggregate Certificate Principal
Balance of the Class AV Certificates and the Adjustable Rate Subordinate
Certificates as of the Distribution Date (after giving effect to distribution of
the Principal Remittance Amount for Loan Group 2 to be made on the Distribution
Date and, in the case of the Distribution Date immediately following the end of
the Funding Period, any amounts to be released from the Pre-Funding Account in
respect of Loan Group 2).

      "ADJUSTABLE RATE SENIOR ENHANCEMENT PERCENTAGE" with respect to any
Distribution Date on or after the Adjustable Rate Stepdown Date means a fraction
(expressed as a percentage):

            (1)   the numerator of which is the excess of:

                  (a)   the aggregate Stated Principal Balance of the Mortgage
            Loans in Loan Group 2 for the preceding Distribution Date over

                  (b)   (i) before the Certificate Principal Balances of the
            Class AV Certificates have been reduced to zero, the sum of the
            Certificate Principal Balances of the Class AV Certificates, or (ii)
            after the Certificate Principal Balances of the Class AV
            Certificates have been reduced to zero, the Certificate Principal
            Balance of the most senior class of Adjustable Rate Subordinate
            Certificates outstanding, as of the preceding Master Servicer
            Advance Date, and

            (2)   the denominator of which is the aggregate Stated Principal
      Balance of the Mortgage Loans in Loan Group 2 for the preceding
      Distribution Date.

      "ADJUSTABLE RATE STEPDOWN DATE" is the earlier to occur of:

            (a)   the Distribution Date on which the aggregate Certificate
      Principal Balance of the Class AV Certificates is reduced to zero, and

            (b)   the later to occur of (x) the Distribution Date in February
      2009 and (y) the first Distribution Date on which the aggregate
      Certificate Principal Balance of the Class AV Certificates (after
      calculating anticipated distributions on the Distribution Date) is less
      than or equal to 56.60% of the aggregate Stated Principal Balance of the
      Mortgage Loans in Loan Group 2 for the Distribution Date.

      "ADJUSTABLE RATE SUBORDINATE CLASS PRINCIPAL DISTRIBUTION AMOUNT" for each
class of Adjustable Rate Subordinate Certificates and Distribution Date means
the excess of:

            (1)   the sum of:

                  (a)   the aggregate Certificate Principal Balance of the Class
            AV Certificates (after taking into account distribution of the Class
            AV Principal Distribution Amount for the Distribution Date),

                  (b)   the aggregate Certificate Principal Balance of any
            classes of Adjustable Rate Subordinate Certificates that are senior
            to the subject class (in each case, after taking into account
            distribution of the Adjustable Rate Subordinate Class Principal
            Distribution Amount(s) for the senior class(es) of Certificates for
            the Distribution Date), and

                  (c)   the Certificate Principal Balance of the subject class
            of Adjustable Rate Subordinate Certificates immediately prior to the
            Distribution Date over

            (2)   the lesser of (a) the product of (x) 100% minus the Stepdown
      Target Subordination Percentage for the subject class of Certificates and
      (y) the aggregate Stated Principal Balance of the


                                      S-63



      Mortgage Loans in Loan Group 2 for the Distribution Date and (b) the
      aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2
      for the Distribution Date minus the Adjustable Rate OC Floor;

provided, however, that if a class of Adjustable Rate Subordinate Certificates
is the only class of Adjustable Rate Subordinate Certificates outstanding on the
Distribution Date, that class will be entitled to receive the entire remaining
Principal Distribution Amount for Loan Group 2 until the Certificate Principal
Balance thereof is reduced to zero.

      "ADJUSTABLE RATE TRIGGER EVENT" with respect to any Distribution Date on
or after the Adjustable Rate Stepdown Date means either an Adjustable Rate
Delinquency Trigger Event with respect to that Distribution Date or an
Adjustable Rate Cumulative Loss Trigger Event with respect to that Distribution
Date.

      "CLASS AF PRINCIPAL DISTRIBUTION AMOUNT" for any Distribution Date means
the excess of:

            (1)   the aggregate Certificate Principal Balance of the Class AF
      Certificates immediately prior to the Distribution Date, over

            (2)   the lesser of (i) 63.40% of the aggregate Stated Principal
      Balance of the Mortgage Loans in Loan Group 1 for the Distribution Date
      and (ii) the aggregate Stated Principal Balance of the Mortgage Loans in
      Loan Group 1 for the Distribution Date minus the Fixed Rate OC Floor.

      "CLASS AV PRINCIPAL DISTRIBUTION AMOUNT" for any Distribution Date means
the excess of:

            (1)   the aggregate Certificate Principal Balance of the Class AV
      Certificates immediately prior to the Distribution Date, over

            (2)   the lesser of (x) 56.60% of the aggregate Stated Principal
      Balance of the Mortgage Loans in Loan Group 2 for the Distribution Date
      and (y) the aggregate Stated Principal Balance of the Mortgage Loans in
      Loan Group 2 for the Distribution Date minus the Adjustable Rate OC Floor.

      "EXTRA PRINCIPAL DISTRIBUTION AMOUNT" with respect to any Distribution
Date and (A) Loan Group 1 means the lesser of (1) the Fixed Rate
Overcollateralization Deficiency Amount and (2) the sum of the Fixed Rate Loan
Group Excess Cashflow available for payment thereof in the priority set forth in
this prospectus supplement and (B) Loan Group 2, is the lesser of (1) the
Adjustable Rate Overcollateralization Deficiency Amount and (2) the Adjustable
Rate Loan Group Excess Cashflow available for payment thereof in the priority
set forth in this prospectus supplement.

      "FIXED RATE CUMULATIVE LOSS TRIGGER EVENT" with respect to any
Distribution Date on or after the Fixed Rate Stepdown Date, a Fixed Rate
Cumulative Loss Trigger Event occurs if (x) the aggregate amount of Realized
Losses on the Mortgage Loans in Loan Group 1 from the Cut-off Date for each
Mortgage Loan in Loan Group 1 to (and including) the last day of the related Due
Period (reduced by the aggregate amount of any Subsequent Recoveries related to
Loan Group 1 received through the last day of that Due Period) exceeds (y) the
applicable percentage, for the Distribution Date, of the sum of the aggregate
Initial Cut-off Date Principal Balance of the Initial Mortgage Loans in Loan
Group 1 and the original Pre-Funded Amount in respect of Loan Group 1, as set
forth below:



      Distribution Date                      Percentage
      -----------------                      ----------

      February 2008 -- January 2009 .....    0.85% with respect to February 2008, plus an additional 1/12th of
                                             1.10% for each month thereafter through January 2009

      February 2009 -- January 2010 .....    1.95% with respect to February 2009, plus an additional 1/12th of
                                             1.35% for each month thereafter through January 2010



                                      S-64





      Distribution Date                      Percentage
      -----------------                      ----------

      February 2010 -- January 2011 .....    3.30% with respect to February 2010, plus an additional 1/12th of
                                             0.95% for each month thereafter through January 2011

      February 2011 -- January 2012 .....    4.25% with respect to February 2011, plus an additional 1/12th of
                                             0.25% for each month thereafter through January 2012

      February 2012 and thereafter ......    4.50%


      "FIXED RATE DELINQUENCY TRIGGER EVENT" with respect to any Distribution
Date on or after the Fixed Rate Stepdown Date exists if the Rolling Sixty-Day
Delinquency Rate for the outstanding Mortgage Loans in Loan Group 1 equals or
exceeds the product of (x) the Fixed Rate Senior Enhancement Percentage for the
Distribution Date and (y) the applicable percentage listed below for the most
senior class of outstanding Class AF Certificates and Fixed Rate Subordinate
Certificates:

                             Class               Percentage
                      -------------------    -------------------

                      AF ................          43.50%
                      MF-1 ..............          52.03%
                      MF-2 ..............          63.43%
                      MF-3 ..............          73.03%
                      MF-4 ..............          84.24%
                      MF-5 ..............          98.89%
                      MF-6 ..............         117.07%
                      MF-7 ..............         142.15%
                      MF-8 ..............         174.96%
                      BF ................         224.24%

      "FIXED RATE OVERCOLLATERALIZATION REDUCTION AMOUNT" for any Distribution
Date is an amount equal to the lesser of (i) the Fixed Rate Excess
Overcollateralization Amount for the Distribution Date and (ii) the Principal
Remittance Amount for Loan Group 1 for the Distribution Date.

      "FIXED RATE EXCESS OVERCOLLATERALIZATION AMOUNT" for any Distribution
Date, is the excess, if any, of the Fixed Rate Overcollateralized Amount for the
Distribution Date over the Fixed Rate Overcollateralization Target Amount for
the Distribution Date.

      "FIXED RATE OC FLOOR" means an amount equal to 0.50% of the sum of the
aggregate Initial Cut-off Date Principal Balance of the Initial Mortgage Loans
in Loan Group 1 and the original Pre-Funded Amount in respect of Loan Group 1.

      "FIXED RATE OVERCOLLATERALIZATION DEFICIENCY AMOUNT" with respect to any
Distribution Date means the amount, if any, by which the Fixed Rate
Overcollateralization Target Amount exceeds the Fixed Rate Overcollateralized
Amount on the Distribution Date (after giving effect to distribution of the
Principal Distribution Amount (other than the portion thereof consisting of the
Extra Principal Distribution Amount) for Loan Group 1 on the Distribution Date).

      "FIXED RATE OVERCOLLATERALIZATION TARGET AMOUNT" means with respect to any
Distribution Date (a) prior to the Fixed Rate Stepdown Date, an amount equal to
3.55% of the sum of the aggregate Initial Cut-off Date Principal Balance of the
Initial Mortgage Loans in Loan Group 1 and the original Pre-Funded Amount in
respect of Loan Group 1 and (b) on or after the Fixed Rate Stepdown Date, the
greater of (i) an amount equal to 7.10% of the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 1 for the current Distribution Date
and (ii) the Fixed Rate OC Floor; provided, however, that if a Fixed Rate
Trigger Event is in effect on any Distribution Date, the Fixed Rate
Overcollateralization Target Amount will be the Fixed Rate Overcollateralization
Target Amount as in effect for the prior Distribution Date.


                                      S-65



      "FIXED RATE OVERCOLLATERALIZED AMOUNT" for any Distribution Date means the
amount, if any, by which (x) the sum of the aggregate Stated Principal Balance
of the Mortgage Loans in Loan Group 1 for the Distribution Date and any amount
on deposit in the Pre-Funding Account in respect of Loan Group 1 on the
Distribution Date exceeds (y) the aggregate Certificate Principal Balance of the
Class AF Certificates and the Fixed Rate Subordinate Certificates as of the
Distribution Date (after giving effect to distribution of the Principal
Remittance Amount from Loan Group 1 to be made on the Distribution Date and, in
the case of the Distribution Date immediately following the end of the Funding
Period, any amounts to be released from the Pre-Funding Account in respect of
Loan Group 1).

      "FIXED RATE SENIOR ENHANCEMENT PERCENTAGE" with respect to any
Distribution Date on or after the Fixed Rate Stepdown Date means a fraction
(expressed as a percentage):

            (1)   the numerator of which is the excess of:

                  (a)   the aggregate Stated Principal Balance of the Mortgage
            Loans in Loan Group 1 for the preceding Distribution Date over

                  (b)   (i) before the Certificate Principal Balances of the
            Class AF Certificates have been reduced to zero, the sum of the
            Certificate Principal Balances of the Class AF Certificates, or (ii)
            after the Certificate Principal Balances of the Class AF
            Certificates have been reduced to zero, the Certificate Principal
            Balance of the most senior class of Fixed Rate Subordinate
            Certificates outstanding, as of the preceding Master Servicer
            Advance Date, and

            (2)   the denominator of which is the aggregate Stated Principal
      Balance of the Mortgage Loans in Loan Group 1 for the preceding
      Distribution Date.

      "FIXED RATE STEPDOWN DATE" is the earlier to occur of:

                  (a)   the Distribution Date on which the aggregate Certificate
            Principal Balance of the Class AF Certificates is reduced to zero,
            and

                  (b)   the later to occur of (x) the Distribution Date in
            February 2009 and (y) the first Distribution Date on which the
            aggregate Certificate Principal Balance of the Class AF Certificates
            (after calculating anticipated distributions on the Distribution
            Date) is less than or equal to 63.40% of the aggregate Stated
            Principal Balance of the Mortgage Loans in Loan Group 1 for the
            Distribution Date.

      "FIXED RATE SUBORDINATE CLASS PRINCIPAL DISTRIBUTION AMOUNT" for each
class of Fixed Rate Subordinate Certificates and Distribution Date means the
excess of:

            (1)   the sum of:

                  (a)   the aggregate Certificate Principal Balance of the Class
            AF Certificates (after taking into account distribution of the Class
            AF Principal Distribution Amount for the Distribution Date),

                  (b)   the aggregate Certificate Principal Balance of any
            class(es) of Fixed Rate Subordinate Certificates that are senior to
            the subject class (in each case, after taking into account
            distribution of the Fixed Rate Subordinate Class Principal
            Distribution Amount(s) for the senior class(es) of Certificates of
            Subordinate Certificates for the Distribution Date), and

                  (c)   the Certificate Principal Balance of the subject class
            of Fixed Rate Subordinate Certificates immediately prior to the
            subject Distribution Date over

            (2)   the lesser of (a) the product of (x) 100% minus the Stepdown
      Target Subordination Percentage for the subject class of Certificates and
      (y) the aggregate Stated Principal Balance of the Mortgage Loans in Loan
      Group 1 for the Distribution Date and (b) the aggregate Stated Principal
      Balance of the Mortgage Loans in Loan Group 1 for the Distribution Date
      minus the Fixed Rate OC Floor;


                                      S-66



provided, however, that if a class of Fixed Rate Subordinate Certificates is the
only class of Fixed Rate Subordinate Certificates outstanding on the
Distribution Date, that class will be entitled to receive the entire remaining
Principal Distribution Amount for Loan Group 1 until the Certificate Principal
Balance thereof is reduced to zero.

      "FIXED RATE TRIGGER EVENT" with respect to any Distribution Date on or
after the Fixed Rate Stepdown Date means either a Fixed Rate Delinquency Trigger
Event with respect to that Distribution Date or a Fixed Rate Cumulative Loss
Trigger Event with respect to that Distribution Date.

      "INITIAL TARGET SUBORDINATION PERCENTAGE" and "STEPDOWN TARGET
SUBORDINATION PERCENTAGE" for any class of Subordinate Certificates means the
respective percentages indicated in the following table:

                                          Initial Target       Stepdown Target
                                          Subordination         Subordination
                                            Percentage            Percentage
                                        ------------------   -------------------
      Class MF-1 ...................          15.30%                30.60%
      Class MF-2 ...................          12.55%                25.10%
      Class MF-3 ...................          10.90%                21.80%
      Class MF-4 ...................           9.45%                18.90%
      Class MF-5 ...................           8.05%                16.10%
      Class MF-6 ...................           6.80%                13.60%
      Class MF-7 ...................           5.60%                11.20%
      Class MF-8 ...................           4.55%                 9.10%
      Class BF .....................           3.55%                 7.10%
      Class MV-1 ...................          17.70%                35.40%
      Class MV-2 ...................          14.05%                28.10%
      Class MV-3 ...................          11.95%                23.90%
      Class MV-4 ...................          10.05%                20.10%
      Class MV-5 ...................           8.15%                16.30%
      Class MV-6 ...................           6.50%                13.00%
      Class MV-7 ...................           4.95%                 9.90%
      Class MV-8 ...................           3.55%                 7.10%
      Class BV .....................           2.50%                 5.00%

      The Initial Target Subordination Percentages will not be used to calculate
distributions on the Subordinate Certificates, but rather are presented in order
to provide a better understanding of the credit enhancement provided by the
Subordinate Certificates and the related overcollateralization amount. The
Initial Target Subordination Percentage for any class of Certificates is equal
to a fraction, expressed as a percentage, the numerator of which is equal to the
aggregate original Certificate Principal Balance of any class(es) of
Certificates subordinate to the subject class plus the initial related
Overcollateralization Target Amount and the denominator of which is equal to the
sum of the aggregate Initial Cut-off Date Principal Balance of the Initial
Mortgage Loans in the related Loan Group and the original Pre-Funded Amount in
respect of the related Loan Group.

      "NAS PRINCIPAL DISTRIBUTION AMOUNT" for any Distribution Date means the
product of:

            (1)   a fraction, the numerator of which is the Certificate
      Principal Balance of the Class AF-6 Certificates and the denominator of
      which is the aggregate Certificate Principal Balance of the Class AF
      Certificates, in each case immediately prior to the Distribution Date,

            (2)   any amounts to be distributed to the Class AF Certificates on
      the Distribution Date pursuant to clause (1)(A) or (2)(A) under
      "--Distributions of Principal Distribution Amount for Loan Group 1" below
      and

            (3)   the applicable percentage for the Distribution Date set forth
      in the following table:


                                      S-67



                            Distribution Date                   Percentage
                      -----------------------------           --------------
                      February 2006 -- January 2009                  0%
                      February 2009 -- January 2011                 45%
                      February 2011 -- January 2012                 80%
                      February 2012 -- January 2013                100%
                      February 2013 and thereafter                 300%

      "PRINCIPAL DISTRIBUTION AMOUNT" with respect to each Distribution Date and
a Loan Group means the sum of:

            (1)   the Principal Remittance Amount for the Loan Group for the
      Distribution Date (in the case of Loan Group 2, less any portion of such
      amount used to cover any payment due to the Swap Counterparty with respect
      to such Distribution Date),

            (2)   the Extra Principal Distribution Amount for the Loan Group for
      the Distribution Date, and

            (3)   with respect to the Distribution Date immediately following
      the end of the Funding Period, the amount, if any, remaining in the
      Pre-Funding Account at the end of the Funding Period (net of any
      investment income therefrom) allocable to the Loan Group.

            minus

            (4)   (a) the Fixed Rate Overcollateralization Reduction Amount for
      the Distribution Date, in the case of Loan Group 1, and (b) the Adjustable
      Rate Overcollateralization Reduction Amount for the Distribution Date, in
      the case of Loan Group 2.

      "PRINCIPAL REMITTANCE AMOUNT" with respect to each Loan Group and any
Distribution Date means:

            (a)   the sum, without duplication, of:

                  (1)   the scheduled principal collected during the related Due
            Period or advanced with respect to the Distribution Date,

                  (2)   prepayments collected in the related Prepayment Period,

                  (3)   the Stated Principal Balance of each Mortgage Loan that
            was repurchased by a Seller or purchased by the Master Servicer,

                  (4)   the amount, if any, by which the aggregate unpaid
            principal balance of any Replacement Mortgage Loans delivered by
            Countrywide Home Loans in connection with a substitution of a
            Mortgage Loan is less than the aggregate unpaid principal balance of
            any Deleted Mortgage Loans, and

                  (5)   all Liquidation Proceeds (to the extent that the
            Liquidation Proceeds relate to principal) and Subsequent Recoveries
            collected during the related Due Period, less

            (b)   all Advances relating to principal and certain expenses
      reimbursed during the related Due Period,

in each case with respect to the Mortgage Loans in the Loan Group.

      "REALIZED LOSS" means with respect to any defaulted Mortgage Loan, the
excess of the Stated Principal Balance of the defaulted Mortgage Loan over the
Liquidation Proceeds allocated to principal that have been


                                      S-68



received with respect to the defaulted Mortgage Loan on or at any time prior to
the last day of the related Due Period during which the defaulted Mortgage Loan
is liquidated.

      "ROLLING SIXTY-DAY DELINQUENCY RATE" with respect to any Distribution Date
on or after the related Stepdown Date and any Loan Group, means the average of
the Sixty-Day Delinquency Rates for the Loan Group and the Distribution Date and
the two immediately preceding Distribution Dates.

      "SIXTY-DAY DELINQUENCY RATE" with respect to any Distribution Date on or
after the related Stepdown Date and any Loan Group, means a fraction, expressed
as a percentage, the numerator of which is the aggregate Stated Principal
Balance for the Distribution Date of all Mortgage Loans in the Loan Group 60 or
more days delinquent as of the close of business on the last day of the calendar
month preceding the Distribution Date (including Mortgage Loans in foreclosure,
bankruptcy and REO Properties) and the denominator of which is the aggregate
Stated Principal Balance for the Distribution Date of all Mortgage Loans in the
Loan Group.

      "TRIGGER EVENT" means an Adjustable Rate Trigger Event or a Fixed Rate
Trigger Event, as the case may be.

      "UNPAID REALIZED LOSS AMOUNT" means for any class of Certificates, (x) the
portion of the aggregate Applied Realized Loss Amount previously allocated to
that class remaining unpaid from prior Distribution Dates minus (y) any increase
in the Certificate Principal Balance of that class due to the allocation of
Subsequent Recoveries to the Certificate Principal Balance of that class.

DEPOSITS TO THE CERTIFICATE ACCOUNT

      The Master Servicer will establish and initially maintain a certificate
account (the "CERTIFICATE ACCOUNT") for the benefit of the Trustee on behalf of
the certificateholders. The Master Servicer will initially establish the
Certificate Account at Countrywide Bank, N.A., which is an affiliate of the
Master Servicer. On a daily basis within two Business Days after receipt, the
Master Servicer will deposit or cause to be deposited into the Certificate
Account the following payments and collections received by it in respect to the
Mortgage Loans after the Cut-off Date (other than any scheduled principal due on
or prior to the Cut-off Date and any interest accruing prior to the Cut-off
Date):

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

            (2)   all payments on account of interest (other than interest
      accruing on the Mortgage Loans prior to the Cut-off Date) on the Mortgage
      Loans, net of the related Master Servicing Fees and Special Servicing Fees
      on the Mortgage Loans and net of Prepayment Interest Excess,

            (3)   all Insurance Proceeds, Liquidation Proceeds and Subsequent
      Recoveries,

            (4)   all payments made by the Master Servicer in respect of
      Compensating Interest,

            (5)   all payments made by a Seller in connection with the
      repurchase of any Mortgage Loan due to the breach of certain
      representations, warranties or covenants by the Seller that obligates the
      Seller to repurchase the Mortgage Loan in accordance with the Pooling and
      Servicing Agreement,

            (6)   all payments made by the Master Servicer in connection with
      the purchase of any Mortgage Loans which are 150 days delinquent in
      accordance with the Pooling and Servicing Agreement,

            (7)   all prepayment charges paid by a borrower in connection with
      the full or partial prepayment of the related Mortgage Loan,

            (8)   any amount required to be deposited by the Master Servicer in
      connection with any losses on investment of funds in the Certificate
      Account,


                                      S-69



            (9)   any amounts required to be deposited by the Master Servicer
      with respect to any deductible clause in any blanket hazard insurance
      policy maintained by the Master Servicer in lieu of requiring each
      borrower to maintain a primary hazard insurance policy,

            (10)  all amounts required to be deposited in connection with
      shortfalls in the principal amount of Replacement Mortgage Loans, and

            (11)  all Advances.

      On the Business Day prior to the Master Servicer Advance Date in each of
February 2006, March 2006 and April 2006, Countrywide Home Loans will remit to
the Master Servicer, and the Master Servicer will deposit in the Certificate
Account, the Seller Shortfall Interest Requirement (if any) for the Master
Servicer Advance Date. Prior to their deposit in the Collection Account,
payments and collections on the Mortgage Loans will be commingled with payments
and collections on other mortgage loans and other funds of the Master Servicer.
For a discussion of the risks that arise from the commingling of payments and
collections, see "Risk Factors -- Bankruptcy Or Insolvency May Affect The Timing
And Amount Of Distributions On The Securities" in the prospectus.

WITHDRAWALS FROM THE CERTIFICATE ACCOUNT

      The Master Servicer may from time to time withdraw funds from the
Certificate Account prior to the related Distribution Account Deposit Date for
the following purposes:

            (1)   to pay to the Master Servicer the Master Servicing Fees on the
      Mortgage Loans to the extent not previously paid to or withheld by the
      Master Servicer (subject, in the case of Master Servicing Fees, to
      reduction as described above under "Servicing of the Mortgage Loans --
      Adjustment to Master Servicing Fee in Connection with Prepaid Mortgage
      Loans") and, as additional servicing compensation, assumption fees, late
      payment charges (excluding prepayment charges), net earnings on or
      investment income with respect to funds in or credited to the Certificate
      Account and the amount of Prepayment Interest Excess for the related
      Prepayment Period,

            (2)   to reimburse the Master Servicer for Advances, which right of
      reimbursement with respect to any Mortgage Loan pursuant to this clause
      (2) is limited to amounts received that represent late recoveries of
      payments of principal and/or interest on the related Mortgage Loan (or
      Insurance Proceeds, Liquidation Proceeds or Subsequent Recoveries with
      respect thereto) with respect to which the Advance was made,

            (3)   to reimburse the Master Servicer for any Advances previously
      made that the Master Servicer has determined to be nonrecoverable (and
      prior to the reimbursement, the Master Servicer will deliver to the
      Trustee an officer's certificate indicating the amount of the
      nonrecoverable Advance and identifying the related Mortgage Loan(s), and
      their respective portions of the nonrecoverable advance),

            (4)   to reimburse the Master Servicer from Insurance Proceeds for
      expenses incurred by the Master Servicer and covered by the related
      insurance policy,

            (5)   to pay to the Master Servicer any unpaid Master Servicing Fees
      and to reimburse it for any unreimbursed ordinary and necessary
      out-of-pocket costs and expenses incurred by the Master Servicer in the
      performance of its master servicing obligations including, but not limited
      to, the cost of (i) the preservation, restoration and protection of a
      Mortgaged Property, (ii) any enforcement or judicial proceedings,
      including foreclosures, (iii) the management and liquidation of any REO
      Property and (iv) maintaining any required insurance policies ("SERVICING
      ADVANCES"), which right of reimbursement pursuant to this clause (5) is
      limited to amounts received representing late recoveries of the payments
      of these costs and expenses (or Liquidation Proceeds or Subsequent
      Recoveries, purchase proceeds or repurchase proceeds with respect
      thereto),


                                      S-70



            (6)   to pay to the applicable Seller or the Master Servicer, as
      applicable, with respect to each Mortgage Loan or Mortgaged Property
      acquired in respect thereof that has been purchased by that Seller or the
      Master Servicer from the issuing entity pursuant to the Pooling and
      Servicing Agreement, all amounts received thereon and not taken into
      account in determining the related Purchase Price of the purchased
      Mortgage Loan,

            (7)   after the transfer from the Certificate Account for deposit to
      the Distribution Account of the Interest Remittance Amount and the
      Principal Remittance Amount on the related Distribution Account Deposit
      Date, to reimburse the applicable Seller, the Master Servicer, the NIM
      Insurer or the Depositor for expenses incurred and reimbursable pursuant
      to the Pooling and Servicing Agreement,

            (8)   to withdraw any amount deposited in the Certificate Account
      and not required to be deposited therein, and

            (9)   to clear and terminate the Certificate Account upon
      termination of the Pooling and Servicing Agreement.

      In addition, not later than 1:00 p.m. Pacific Time on the Business Day
immediately preceding each Distribution Date (the "DISTRIBUTION ACCOUNT DEPOSIT
DATE"), the Master Servicer will withdraw from the Certificate Account and remit
to the Trustee the amount of the Interest Remittance Amount and the Principal
Remittance Amount to the extent on deposit in the Certificate Account, and the
Trustee will deposit the amount in the Distribution Account, as described below.

      The Master Servicer is required to maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to clauses (1) through (6)
above.

DEPOSITS TO THE DISTRIBUTION ACCOUNT

      The Trustee will establish and maintain a distribution account (the
"DISTRIBUTION ACCOUNT") on behalf of the certificateholders. The Trustee will,
promptly upon receipt, deposit in the Distribution Account and retain therein:

            (1)   the aggregate amount remitted by the Master Servicer to the
      Trustee,

            (2)   any amount required to be deposited by the Master Servicer in
      connection with any losses on investment of funds in the Distribution
      Account, and

            (3)   the amount, if any, remaining in the Pre-Funding Account (net
      of any investment income therefrom) on the Distribution Date immediately
      following the end of the Funding Period.

WITHDRAWALS FROM THE DISTRIBUTION ACCOUNT

      The Trustee will withdraw funds from the Distribution Account for
distribution to the certificateholders as described below under "--
Distributions" and may from time to time make withdrawals from the Distribution
Account:

            (1)   to pay the Trustee Fee to the Trustee,

            (2)   to pay to the Master Servicer, as additional servicing
      compensation, earnings on or investment income with respect to funds in or
      credited to the Distribution Account,

            (3)   to withdraw any amount deposited in the Distribution Account
      and not required to be deposited therein (which withdrawal may be at the
      direction of the Master Servicer through delivery of a written notice to
      the Trustee describing the amounts deposited in error), and


                                      S-71



            (4)   to clear and terminate the Distribution Account upon the
      termination of the Pooling and Servicing Agreement.

      There is no independent verification of the transaction accounts or the
transaction activity with respect to the Distribution Account.

      Prior to each Determination Date, the Master Servicer is required to
provide the Trustee a report containing the data and information concerning the
Mortgage Loans that is required by the Trustee to prepare the monthly statement
to certificateholders for the related Distribution Date. See " -- Reports to
Certificateholders" in this prospectus supplement. The Trustee is not
responsible for recomputing, recalculating or verifying the information provided
to it by the Master Servicer in that report and will be permitted to
conclusively rely on any information provided to it by the Master Servicer.

INVESTMENTS OF AMOUNTS HELD IN ACCOUNTS

      The Certificate Account, the Distribution Account and the Pre-Funding
Account. All funds in the Certificate Account, the Distribution Account and the
Pre-Funding Account will be invested in Permitted Investments at the direction
of the Master Servicer. In the case of:

  o   the Certificate Account and the Distribution Account, all income and gain
      net of any losses realized from the investment will be for the benefit of
      the Master Servicer as additional servicing compensation and will be
      remitted to it monthly as described herein; and

  o   the Pre-Funding Account, all income and gain net of any losses realized
      from the investment will be for the benefit of Countrywide Home Loans and
      will be remitted to Countrywide Home Loans as described herein.

      The amount of any losses incurred in the Certificate Account or the
Distribution Account in respect of the investments will be deposited by the
Master Servicer in the Certificate Account or paid to the Trustee for deposit
into the Distribution Account out of the Master Servicer's own funds immediately
as realized. The amount of any losses incurred in the Pre-Funding Account in
respect of the investments will be paid by Countrywide Home Loans to the Trustee
for deposit into the Pre-Funding Account out of Countrywide Home Loans' own
funds immediately as realized. The Trustee will not be liable for the amount of
any loss incurred in respect of any investment or lack of investment of funds
held in the Certificate Account, the Distribution Account or the Pre-Funding
Account and made in accordance with the Pooling and Servicing Agreement.

      Carryover Reserve Fund. Funds in the Carryover Reserve Fund may be
invested in Permitted Investments in respect of amounts received under the
Corridor Contract, at the written direction of the majority holder of the Class
CF Certificates.

      If the Trustee does not receive written directions regarding investment,
it will invest all funds in the Carryover Reserve Fund in respect of amounts
received under the Corridor Contract in Permitted Investments. Any net
investment earnings will be paid pro rata to the holders of the class of
Certificates entitled to direct the investments of the amounts, in accordance
with their Percentage Interests. Any losses incurred in the Carryover Reserve
Fund in respect of the investments will be charged against amounts on deposit in
the Carryover Reserve Fund (or the investments) immediately as realized. The
Trustee will not be liable for the amount of any loss incurred in respect of any
investment or lack of investment of funds held in the Carryover Reserve Fund and
made in accordance with the Pooling and Servicing Agreement.

THE SWAP ACCOUNT

      The Trustee, in its capacity as trustee of the swap trust, will establish
and maintain a swap account (the "SWAP ACCOUNT") on behalf of the holders of the
Swap Certificates and the Swap Counterparty. With respect to each Distribution
Date, the Trustee will deposit into the Swap Account any portion of the Interest
Funds for Loan Group 2 for that Distribution Date (and, if necessary, any
portion of the Principal Remittance Amount for Loan Group 2 for that
Distribution Date) that are to be remitted to the Swap Contract Administrator
for payment to the


                                      S-72



Swap Counterparty, as well as any amounts received from the Swap Contract
Administrator in respect of the Swap Contract, each as described below under "--
The Swap Contract". With respect to each Distribution Date, following the
deposits to the Swap Account described in the preceding sentence, the Trustee
will make a corresponding withdrawal from the Swap Account for remittance to the
Swap Contract Administrator or distribution to the holders of the Swap
Certificates, as the case may be depending on whether a Net Swap Payment is due
to the Swap Counterparty or from the Swap Counterparty, as described below under
"-- The Swap Contract".


                                      S-73



FEES AND EXPENSES

      The following summarizes the related fees and expenses to be paid from the
assets of the issuing entity and the source of payments for the fees and
expenses:



  TYPE / RECIPIENT (1)                AMOUNT                 GENERAL PURPOSE              SOURCE (2)                   FREQUENCY
------------------------    ---------------------------    -------------------    ---------------------------     --------------

FEES

Master Servicing Fee /      One-twelfth of the Stated       Compensation          Collections with respect to            Monthly
Master Servicer             Principal Balance of each                             each Mortgage Loan and any
                            Mortgage Loan (other than a                           Liquidation Proceeds or
                            Specially Serviced Mortgage                           Subsequent Recoveries
                            Loan) multiplied by the
                            Servicing Fee Rate (3)

Special Servicing Fee /     One-twelfth of the Stated       Compensation          Collections with respect to            Monthly
SpecialServicer             Principal Balance of each                             each Specially Serviced
                            Specially Serviced Mortgage                           Mortgage Loan and any
                            Loan multiplied by the                                Liquidation Proceeds or
                            Servicing Fee Rate (3)                                Subsequent Recoveries


Additional Servicing        o  Prepayment Interest          Compensation          Interest collections with         Time to time
Compensation / Master          Excess (4)                                         respect to each Mortgage
Servicer and Special                                                              Loan other than a
Servicer                                                                          Specially Serviced
                                                                                  Mortgage Loan (in the
                                                                                  case of the Master
                                                                                  Servicer) or each
                                                                                  Specially Serviced
                                                                                  Mortgage Loan (in the
                                                                                  case of the Special
                                                                                  Servicer)

                            o  All late payment fees,       Compensation          Payments made by obligors         Time to time
                               assumption fees and                                with respect to the
                               other similar charges                              Mortgage Loans other than
                               (excluding prepayment                              the Specially Serviced
                               charges)                                           Mortgage Loans (in the
                                                                                  case of the Master
                                                                                  Servicer) or the
                                                                                  Specially Serviced
                                                                                  Mortgage Loans (in the
                                                                                  case of the Special
                                                                                  Servicer)

                            o  All investment income        Compensation          Investment income related              Monthly
                               earned on amounts on                               to the Certificate
                               deposit in the                                     Account and Distribution
                               Certificate Account                                Account (in the case of
                               and Distribution                                   the Master Servicer) or
                               Account (in the case                               the Special Servicing
                               of the Master                                      Account (in the case of
                               Servicer) or the                                   the Special Servicer)
                               Special Servicing
                               Account (in the case
                               of the Special
                               Servicer).

                            o  Excess Proceeds (5)          Compensation          Liquidation Proceeds and          Time to time
                                                                                  Subsequent Recoveries
                                                                                  with respect to each
                                                                                  Mortgage Loan other than
                                                                                  a Specially Serviced
                                                                                  Mortgage Loan (in the
                                                                                  case of the Master
                                                                                  Servicer) or each
                                                                                  Specially Serviced
                                                                                  Mortgage Loan (in the
                                                                                  case of the Special
                                                                                  Servicer)

Trustee Fee (the            One-twelfth of the              Compensation          Interest Remittance  Amount            Monthly
"TRUSTEE FEE") / Trustee    Trustee Fee Rate
                            multiplied by the sum of
                            (i) the aggregate Stated
                            Principal Balance of the
                            outstanding Mortgage
                            Loans and (ii) any
                            amounts remaining in the
                            Pre-Funding



                                      S-74





  TYPE / RECIPIENT (1)                AMOUNT                 GENERAL PURPOSE              SOURCE (2)                   FREQUENCY
------------------------    ---------------------------    -------------------    ---------------------------     --------------

                            Account (excluding any
                            investment earnings
                            thereon).

EXPENSES

Insurance premiums /        Insurance premium(s) for        Expense               Interest collections on                Monthly
Mortgage Insurer            Mortgage Loan(s) covered                              the related Mortgage
                            by lender-paid mortgage                               Loan(s)
                            insurance policies

Insurance expenses /        Expenses incurred by the        Reimbursement of      To the extent the                 Time to time
Master Servicer and         Master Servicer and             Expenses              expenses are covered by
Special Servicer            Special Servicer                                      an insurance policy with
                                                                                  respect to the Mortgage
                                                                                  Loan

Servicing Advances /        To the extent of funds          Reimbursement of      With respect to each              Time to time
Master Servicer and         available, the amount of        Expenses              Mortgage Loan, late
Special Servicer            any Servicing Advances.                               recoveries of the
                                                                                  payments of the costs and
                                                                                  expenses, Liquidation
                                                                                  Proceeds, Subsequent
                                                                                  Recoveries, purchase
                                                                                  proceeds or repurchase
                                                                                  proceeds for that
                                                                                  Mortgage Loan (6)

Indemnification             Amounts for which the           Indemnification       Amounts on deposit on the              Monthly
expenses / the Sellers,     Sellers, the Master                                   Certificate Account on
the Master Servicer, the    Servicer, the Special                                 any Distribution Account
Special Servicer, the       Servicer, the NIM Insurer                             Deposit Date, following
NIM Insurer and the         and Depositor are                                     the transfer to the
Depositor                   entitled to                                           Distribution Account
                            indemnification (7)


__________
(1)   If the Trustee succeeds to the position of Master Servicer, it will be
      entitled to receive the same fees and expenses of the Master Servicer
      described in this prospectus supplement. Any change to the fees and
      expenses described in this prospectus supplement would require an
      amendment to the Pooling and Servicing Agreement. See "-- Amendment" in
      this prospectus supplement.

(2)   Unless otherwise specified, the fees and expenses shown in this table are
      paid (or retained by the Master Servicer in the case of amounts owed to
      the Master Servicer) prior to distributions on the Certificates.

(3)   The Servicing Fee Rate for each Mortgage Loan will equal 0.50% per annum.
      The amount of the monthly Master Servicing Fee is subject to adjustment
      with respect to Mortgage Loans that are prepaid in full, as described in
      this prospectus supplement under "Servicing of the Mortgage Loans --
      Adjustment to Master Servicing Fee in Connection with Certain Prepaid
      Mortgage Loans."

(4)   Prepayment Interest Excess is described above in the prospectus supplement
      under "Servicing of the Mortgage Loans -- Servicing Compensation and
      Payment of Expenses."

(5)   Excess Proceeds is described above in this prospectus supplement under "--
      Glossary of Terms -- General Definitions."


                                      S-75



(6)   Reimbursement of Servicing Advances for a Mortgage Loan is limited to the
      late recoveries of the payments of the costs and expenses, Liquidation
      Proceeds, Subsequent Recoveries, purchase proceeds or repurchase proceeds
      for that Mortgage Loan.

(7)   Each of the Sellers, the Master Servicer, the NIM Insurer and the
      Depositor are entitled to indemnification of certain expenses as described
      in this prospectus supplement under "-- Certain Matters related to the
      Master Servicer, the Depositor, the Sellers and the NIM Insurer." In
      addition, the Special Servicer is entitled to indemnification from the
      Master Servicer and Countrywide Home Loans, Inc. of certain expenses as
      described in this prospectus supplement under "Servicing of the Mortgage
      Loans -- The Special Sub-Servicing Agreement -- Indemnification."


                                      S-76



DISTRIBUTIONS

      General. Distributions on the Certificates will be made by the Trustee on
each Distribution Date to the persons in whose names the Certificates are
registered at the close of business on the Record Date.

      Distributions will be made by check mailed to the address of the person
entitled thereto as it appears on the Certificate Register or, in the case of
any certificateholder that holds 100% of a class of Certificates or who holds a
class of Certificates with an aggregate initial Certificate Principal Balance of
$1,000,000 or more and that has so notified the Trustee in writing in accordance
with the Pooling and Servicing Agreement, by wire transfer in immediately
available funds to the account of the certificateholder at a bank or other
depository institution having appropriate wire transfer facilities; provided,
however, that the final distribution in retirement of the Certificates will be
made only upon presentation and surrender of the Certificates at the Corporate
Trust Office of the Trustee. On each Distribution Date, a holder of a
Certificate will receive its Percentage Interest of the amounts required to be
distributed with respect to the applicable class of Certificates.

      On each Distribution Date, the Trustee will withdraw all prepayment
charges in the Distribution Account and distribute them (i) in the case of
prepayment charges from the Mortgage Loans in Loan Group 1, to the Class PF
Certificates, and (ii) in the case of prepayment charges from the Mortgage Loans
in Loan Group 2, to the Class PV Certificates.

      Distributions of Interest. On each Distribution Date, the interest
distributable with respect to the interest-bearing certificates is the interest
which has accrued on the Certificate Principal Balance thereof immediately prior
to that Distribution Date at the Pass-Through Rate during the applicable Accrual
Period, and in the case of the Senior Certificates, any Interest Carry Forward
Amount. For each class of Subordinate Certificates, any Interest Carry Forward
Amount will be payable only from excess cashflow (if any) as and to the extent
described under "-- Overcollateralization Provisions."

      All calculations of interest on the Adjustable Rate Certificates will be
made on the basis of a 360-day year and the actual number of days elapsed in the
applicable Accrual Period. All calculations of interest on the Fixed Rate
Certificates will be made on the basis of a 360-day year assumed to consist of
twelve 30-day months.

      The Pass-Through Rates for the Adjustable Rate Certificates are variable
rates that may change from Distribution Date to Distribution Date. Additionally,
the Pass-Through Rate for each of the Adjustable Rate Certificates is subject to
increase after the Optional Termination Date. On each Distribution Date, the
Pass-Through Rate for each class of interest-bearing Certificates will be
subject to the applicable Net Rate Cap. See the related definitions in "--
Glossary of Terms -- Definitions related to Interest Calculations and
Distributions" for a more detailed understanding as to how the Net Rate Cap is
calculated, and applied to the Pass-Through Rate.

      If on any Distribution Date, the Pass-Through Rate for a class of
interest-bearing Certificates is based on the applicable Net Rate Cap, each
holder of the applicable Certificates will be entitled to receive the resulting
shortfall only from remaining excess cashflow (if any) to the extent described
in this prospectus supplement under "-- Overcollateralization Provisions", and
from payments (if any) allocated to the issuing entity in respect of the
Corridor Contract in the case of the Class AF-1 Certificates and the Swap
Contract in the case of the Group 2 Certificates.

      Distributions of Interest Funds For Loan Group 1. On each Distribution
Date, the Interest Funds for that Distribution Date with respect to Loan Group 1
are required to be distributed in the following order of priority, until those
Interest Funds have been fully distributed:

            (1)   concurrently to the classes of Class AF Certificates, the
      Current Interest and Interest Carry Forward Amount for those classes, pro
      rata, based on their respective entitlements,

            (2)   sequentially, to the Class MF-1, Class MF-2, Class MF-3, Class
      MF-4, Class MF-5, Class MF-6, Class MF-7, Class MF-8 and Class BF
      Certificates, in that order, the Current Interest for that class, and


                                      S-77



            (3)   any remainder as part of the Fixed Rate Loan Group Excess
      Cashflow to be allocated as described under "-- Overcollateralization
      Provisions" below.

      Distributions of Interest Funds for Loan Group 2. On each Distribution
Date, the Interest Funds for that Distribution Date with respect to Loan Group 2
are required to be distributed in the following order of priority, until those
Interest Funds have been fully distributed:

            (1)   to the Swap Account, the amount of any Net Swap Payment and
      any Swap Termination Payment (other than a Swap Termination Payment due to
      a Swap Counterparty Trigger Event) payable to the Swap Counterparty with
      respect to such Distribution Date;

            (2)   concurrently to the classes of Class AV Certificates, the
      Current Interest and Interest Carry Forward Amount for those classes, pro
      rata, based on their respective entitlements,

            (3)   sequentially, to the Class MV-1, Class MV-2, Class MV-3, Class
      MV-4, Class MV-5, Class MV-6, Class MV-7, Class MV-8 and Class BV
      Certificates, in that order, the Current Interest for that class, and

            (4)   any remainder as part of the Adjustable Rate Loan Group Excess
      Cashflow to be allocated as described under "--Overcollateralization
      Provisions" below.

      Distributions of Funds from the Corridor Contract. On each Distribution
Date on or prior to the Corridor Contract Termination Date, amounts allocated to
the issuing entity in respect of the Corridor Contract for that Distribution
Date will be deposited in the Carryover Reserve Fund and then distributed to the
Class AF-1 Certificates, to the extent needed to pay any related Net Rate
Carryover.

      Any amounts allocated to the issuing entity in respect of the Corridor
Contract that remain after the application of those amounts as described in the
preceding paragraph will be distributed to the holders of the Class CF
Certificates and will not be available for the payment of any Net Rate Carryover
on any class or classes of Certificates unless the Corridor Contract is subject
to an early termination, in which case the portion of any early termination
payment allocated to the issuing entity in respect of the Corridor Contract will
be deposited by the Trustee in the Carryover Reserve Fund to cover any Net Rate
Carryover on the Class AF-1 Certificates until the Corridor Contract Termination
Date. See "-- Carryover Reserve Fund" below.

      Distributions of Funds from the Swap Contract. On each Distribution Date
on or prior to the Swap Contract Termination Date, amounts allocated to the Swap
Account by the Swap Contract Administrator will be distributed as described
under "-- The Swap Contract" below.

      Distributions of Principal. The manner of distributing principal among the
classes of Certificates will differ depending upon whether a Distribution Date
occurs on or after the related Stepdown Date and, on or after that date, whether
a Trigger Event is in effect. Prior to the Stepdown Date for a Loan Group or if
a Trigger Event for that Loan Group is in effect, all amounts distributable as
principal on a Distribution Date will be allocated first to the related Senior
Certificates, until those Senior Certificates are paid in full, before any
distributions of principal are made on the related Subordinate Certificates.

      On any Distribution Date on or after the Stepdown Date for a Loan Group
and so long as no Trigger Event for that Loan Group is in effect, instead of
allocating all amounts distributable as principal on the Certificates to the
related Senior Certificates until those Senior Certificates are paid in full, a
portion of those amounts distributable as principal will be allocated to the
related Subordinate Certificates. The amount allocated to each class of
Certificates on or after the related Stepdown Date and so long as no related
Trigger Event is in effect will be based on the targeted level of
overcollateralization and subordination for each class of Certificates. After
the related Stepdown Date, if a related Trigger Event is in effect, the priority
of principal payments will revert to the distribution priority prior to the
related Stepdown Date. The amount to be distributed as principal on each
Distribution Date are described in more detail under "-- Glossary of Terms --
Definitions related to Principal Calculations and Distributions", and the order
in which these amounts are distributed are described under "-- Distributions of
Principal Distribution Amount for Loan Group 1" in this prospectus supplement.


                                      S-78



      Distributions of Principal Distribution Amount for Loan Group 1. On each
Distribution Date, the Principal Distribution Amount for Loan Group 1 is
required to be distributed as follows until the Principal Distribution Amount
has been fully distributed (with the Principal Distribution Amount exclusive of
the portion thereof consisting of the Extra Principal Distribution Amount being
applied first and the Extra Principal Distribution Amount being applied
thereafter):

            (1)   For each Distribution Date prior to the Fixed Rate Stepdown
      Date or on which a Fixed Rate Trigger Event is in effect, sequentially:

                  (A) to the classes of Class AF Certificates, in the amounts
            and order of priority set forth in clause (3) below, until the
            Certificate Principal Balances thereof are reduced to zero,

                  (B) sequentially, to the Class MF-1, Class MF-2, Class MF-3,
            Class MF-4, Class MF-5, Class MF-6, Class MF-7, Class MF-8 and Class
            BF Certificates, in that order, in each case until the Certificate
            Principal Balance thereof is reduced to zero, and

                  (C) any remainder as part of the Fixed Rate Loan Group Excess
            Cashflow to be allocated as described under "--Overcollateralization
            Provisions" below.

            (2)   For each Distribution Date on or after the Fixed Rate Stepdown
      Date and so long as a Fixed Rate Trigger Event is not in effect,
      sequentially:

                  (A) in an amount up to the Class AF Principal Distribution
            Amount, to the classes of Class AF Certificates in the amounts and
            order of priority set forth in clause (3) below, until the
            Certificate Principal Balances thereof are reduced to zero,

                  (B) sequentially, to the Class MF-1, Class MF-2, Class MF-3,
            Class MF-4, Class MF-5, Class MF-6, Class MF-7, Class MF-8 and Class
            BF Certificates, in that order, the Fixed Rate Subordinate Class
            Principal Distribution Amount for that class, in each case until the
            Certificate Principal Balance thereof is reduced to zero, and

                  (C) any remainder as part of the Fixed Rate Loan Group Excess
            Cashflow to be allocated as described under "--Overcollateralization
            Provisions" below.

            (3)   On each Distribution Date on which any principal amounts are
      to be distributed to the Classes of Class AF Certificates, those amounts
      will be distributed to the Class AF Certificates in the following order of
      priority:

                  (A) the NAS Principal Distribution Amount to the Class AF-6
            Certificates, until the Certificate Principal Balance thereof is
            reduced to zero,

                  (B) sequentially, to the Class AF-1, Class AF-2, Class AF-3,
            Class AF-4 and Class AF-5 Certificates, in that order, in each case
            until the Certificate Principal Balance thereof is reduced to zero,
            and

                  (C) to the Class AF-6 Certificates, without regard to the NAS
            Principal Distribution Amount, until the Certificate Principal
            Balance thereof is reduced to zero.

      Distributions of Principal Distribution Amount for Loan Group 2. On each
Distribution Date, the Principal Distribution Amount for Loan Group 2 is
required to be distributed as follows until the Principal Distribution Amount
has been fully distributed (with the Principal Distribution Amount exclusive of
the portion thereof consisting of the Extra Principal Distribution Amount being
applied first and the Extra Principal Distribution Amount being applied
thereafter):


                                      S-79



            (1)   For each Distribution Date prior to the Adjustable Rate
      Stepdown Date or on which an Adjustable Rate Trigger Event is in effect,
      sequentially:

                  (A) to the classes of Class AV Certificates, in the amounts
            and order of priority set forth in clause (3) below, until the
            Certificate Principal Balances thereof are reduced to zero,

                  (B) sequentially, to the Class MV-1, Class MV-2, Class MV-3,
            Class MV-4, Class MV-5, Class MV-6, Class MV-7, Class MV-8 and Class
            BV Certificates, in that order, in each case until the Certificate
            Principal Balance thereof is reduced to zero, and

                  (C) any remainder as part of the Adjustable Rate Loan Group
            Excess Cashflow to be allocated as described under
            "--Overcollateralization Provisions" below.

            (2)   For each Distribution Date on or after the Adjustable Rate
      Stepdown Date and so long as an Adjustable Rate Trigger Event is not in
      effect, sequentially:

                  (A) in an amount up to the Class AV Principal Distribution
            Amount, to the classes of Class AV Certificates, in the amounts and
            order of priority set forth in clause (3) below, until the
            Certificate Principal Balances thereof are reduced to zero,

                  (B) sequentially, to the Class MV-1, Class MV-2, Class MV-3,
            Class MV-4, Class MV-5, Class MV-6, Class MV-7, Class MV-8 and Class
            BV Certificates, in that order, the Adjustable Rate Subordinate
            Class Principal Distribution Amount for that class, in each case
            until the Certificate Principal Balance thereof is reduced to zero,
            and

                  (C) any remainder as part of the Adjustable Rate Loan Group
            Excess Cashflow to be allocated as described under
            "--Overcollateralization Provisions" below.

            (3)   On each Distribution Date on which any principal amounts are
      to be distributed to the Class AV Certificates, those amounts will be
      distributed sequentially, to the Class AV-1, Class AV-2 and Class AV-3
      Certificates, in that order, in each case until the Certificate Principal
      Balance thereof is reduced to zero.

      Residual Certificates. The Class A-R Certificates do not bear interest.
The Class A-R Certificates will receive a distribution of $100 of principal on
the first Distribution Date, after which their Certificate Principal Balance
will equal zero. The $100 will be withdrawn from a reserve account established
by the Trustee and funded by the Depositor on the Closing Date for the purposes
of making distributions on the Class A-R, Class PF and Class PV Certificates.
The Class A-R Certificates will remain outstanding for so long as the issuing
entity will exist. In addition to the distribution of principal on the first
Distribution Date, on each Distribution Date, the holders of the Class A-R
Certificates, as provided in the Pooling and Servicing Agreement, will be
entitled to receive any available funds remaining after payment of interest and
principal on the Senior Certificates and on the Subordinate Certificates (as
described above) and payments to the Swap Counterparty (each as described above)
and the Class CF and Class CV Certificates (as provided in the Pooling and
Servicing Agreement). It is not anticipated that there will be any significant
amounts remaining for distribution to the Class A-R Certificates.

OVERCOLLATERALIZATION PROVISIONS

      On the Closing Date, it is expected that:

  o   the sum of the aggregate Stated Principal Balance of the Initial Mortgage
      Loans in Loan Group 1 and the original Pre-Funded Amount in respect of
      Loan Group 1 will exceed the initial aggregate Certificate Principal
      Balance of the Class AF Certificates and the Fixed Rate Subordinate
      Certificates by approximately $11,271,000, which is approximately 2.55% of
      the sum of the aggregate Stated Principal Balance of the Initial Mortgage
      Loans in Loan Group 1 and the original Pre-Funded Amount in respect of
      Loan Group 1; and


                                      S-80



  o   the sum of the aggregate Stated Principal Balance of the Initial Mortgage
      Loans in Loan Group 2 and the original Pre-Funded Amount in respect of
      Loan Group 2 will exceed the initial aggregate Certificate Principal
      Balance of the Class AV Certificates and the Adjustable Rate Subordinate
      Certificates by approximately $8,950,000, which is approximately 2.50% of
      the sum of the aggregate Stated Principal Balance of the Initial Mortgage
      Loans in Loan Group 2 and the original Pre-Funded Amount in respect of
      Loan Group 2.

      In the case of Loan Group 1, the amount of overcollateralization is less
than the initial level of overcollateralization required by the Pooling and
Servicing Agreement. In the case of Loan Group 2, the amount of
overcollateralization is equal to the initial level of overcollateralization
required by the Pooling and Servicing Agreement. The weighted average Adjusted
Net Mortgage Rate for each group of Mortgage Loans is generally expected to be
higher than the weighted average of the Pass-Through Rates on the related
classes of Certificates. As a result, interest collections on the Mortgage Loans
are expected to be generated in excess of the amount of interest payable to the
holders of the related Certificates and the related fees and expenses payable by
the issuing entity. Any interest payments received in respect of the Mortgage
Loans in a Loan Group in excess of the amount that is needed to pay interest on
the related Certificates and the issuing entity's expenses related to that Loan
Group (including, in the case of Loan Group 2, any Net Swap Payments that may be
payable to the Swap Counterparty) will be used to reduce the total Certificate
Principal Balance of the related Certificates, until the required level of
overcollateralization has been achieved (in the case of Loan Group 1) or
maintained or restored (in the case of Loan Group 2). The excess cashflow, if
any, will be applied on each Distribution Date as a payment of principal on the
related class or classes of Offered Certificates then entitled to receive
distributions in respect of principal, but only to the limited extent hereafter
described. Thereafter, any remaining excess cashflow will be allocated to pay
Net Rate Carryover and Unpaid Realized Loss Amounts in the amount and the
priority described below.

      Fixed Rate Loan Group Excess Cashflow.

      The "FIXED RATE LOAN GROUP EXCESS CASHFLOW" with respect to any
Distribution Date is the sum of (i) the amounts remaining as set forth in clause
(3) in "-- Distributions -- Distributions of Interest -- Distributions of
Interest Funds for Loan Group 1" for the Distribution Date and clause (1)(C) or
(2)(C), as applicable, in "-- Distributions -- Distributions of Principal
Distribution Amount for Loan Group 1" for the Distribution Date and (ii) the
Fixed Rate Overcollateralization Reduction Amount for the Distribution Date, if
any.

      With respect to any Distribution Date, any Fixed Rate Loan Group Excess
Cashflow will be paid to the classes of Certificates in the following order of
priority:

            1.  to the holders of the class or classes of Class AF Certificates
                and Fixed Rate Subordinate Certificates then entitled to receive
                distributions in respect of principal, in an amount equal to the
                Extra Principal Distribution Amount for Loan Group 1, payable to
                those holders as part of the Principal Distribution Amount as
                described under "--Distributions--Distributions of Principal
                Distribution Amount for Loan Group 1" above;

            2.  concurrently, to the holders of the classes of Class AF
                Certificates, pro rata based on the Unpaid Realized Loss Amounts
                for those classes, in an amount equal to the Unpaid Realized
                Loss Amount for each such class;

            3.  sequentially, to the holders of the Class MF-1, Class MF-2,
                Class MF-3, Class MF-4, Class MF-5, Class MF-6, Class MF-7,
                Class MF-8 and Class BF Certificates, in that order, in each
                case, first in an amount equal to any Interest Carry Forward
                Amount for that class, and second, in an amount equal to the
                Unpaid Realized Loss Amount for that class;

            4.  to each class of Class AF Certificates and Fixed Rate
                Subordinate Certificates (in the case of the Class AF-1
                Certificates after application of amounts allocated to the
                issuing entity in respect of the Corridor Contract to cover Net
                Rate Carryover), pro rata based on the Certificate Principal
                Balances thereof, to the extent needed to pay any unpaid Net
                Rate Carryover for each such class; and then any Fixed Rate Loan
                Group Excess Cashflow


                                      S-81



                remaining after the allocation to pay Net Rate Carryover based
                on the Certificate Principal Balances of those Certificates will
                be distributed to each class of Class AF Certificates and Fixed
                Rate Subordinate Certificates with respect to which there
                remains any unpaid Net Rate Carryover, pro rata, based on the
                amount of the unpaid Net Rate Carryover;

            5.  to the holders of the class or classes of Class AV Certificates
                and Adjustable Rate Subordinate Certificates then entitled to
                receive distributions in respect of principal, payable to those
                holders as part of the Principal Distribution Amount as
                described under "--Distributions--Distributions of Principal
                Distribution Amount for Loan Group 2" above, in an amount equal
                to the Extra Principal Distribution Amount for Loan Group 2 not
                covered by the Adjustable Rate Loan Group Excess Cashflow and
                Net Swap Payments;

            6.  concurrently, to the holders of each class of Class AV
                Certificates, pro rata based on the Unpaid Realized Loss Amounts
                for those classes remaining undistributed after application of
                the Adjustable Rate Loan Group Excess Cashflow and Net Swap
                Payments, in each case in an amount equal to the Unpaid Realized
                Loss Amount for the class remaining undistributed after
                application of the Adjustable Rate Loan Group Excess Cashflow
                and Net Swap Payments;

            7.  sequentially, to the holders of the Class MV-1, Class MV-2,
                Class MV-3, Class MV-4, Class MV-5, Class MV-6, Class MV-7,
                Class MV-8 and Class BV Certificates, in that order, in each
                case in an amount equal to the Unpaid Realized Loss Amount for
                that class remaining undistributed after application of the
                Adjustable Rate Loan Group Excess Cashflow and Net Swap
                Payments;

            8.  to the Carryover Reserve Fund, in an amount equal to the
                Required Carryover Reserve Fund Deposit (after giving effect to
                other deposits and withdrawals therefrom on the Distribution
                Date without regard to any amounts allocated to the issuing
                entity in respect of the Corridor Contract not required to cover
                Net Rate Carryover on the related class(es) of Certificates on
                that Distribution Date); and

            9.  to fund distributions to the holders of the Class CF and Class
                A-R Certificates, in each case in the amounts specified in the
                Pooling and Servicing Agreement.

      Following the distributions pursuant to clauses 1 through 4 of the
preceding paragraph but prior to the distributions pursuant to clauses 5 through
9 of the preceding paragraph, the Trustee will make certain distributions from
the Swap Account, as described in further detail below under " -- The Swap
Contract".

      Adjustable Rate Loan Group Excess Cashflow.

      The "ADJUSTABLE RATE LOAN GROUP EXCESS CASHFLOW" with respect to any
Distribution Date is the sum of (i) the amounts remaining as set forth in clause
(4) in "--Distributions -- Distributions of Interest -- Distributions of
Interest Funds for Loan Group 2" and clause (1)(C) or (2)(C), as applicable, in
"-- Distributions -- Distributions of Principal Distribution Amount for Loan
Group 2" and (ii) the Adjustable Rate Overcollateralization Reduction Amount for
that Distribution Date, if any.

      With respect to any Distribution Date, any Adjustable Rate Loan Group
Excess Cashflow will be paid to the classes of Certificates in the following
order of priority, in each case to the extent of the remaining Adjustable Rate
Loan Group Excess Cashflow:

            1.  to the holders of the class or classes of Class AV Certificates
                and Adjustable Rate Subordinate Certificates then entitled to
                receive distributions in respect of principal, in an aggregate
                amount equal to the Extra Principal Distribution Amount for Loan
                Group 2, payable to those holders as part of the related
                Principal Distribution Amount as described under
                "--Distributions--Distributions of Principal Distribution Amount
                for Loan Group 2" above;


                                      S-82



            2.  concurrently, to the holders of each class of Class AV
                Certificates, pro rata based on the Unpaid Realized Loss Amounts
                for those classes, in each case in an amount equal to the Unpaid
                Realized Loss Amount for the class;

            3.  sequentially, to the holders of the Class MV-1, Class MV-2,
                Class MV-3, Class MV-4, Class MV-5, Class MV-6, Class MV-7,
                Class MV-8 and Class BV Certificates, in that order, in each
                case, first in an amount equal to any Unpaid Realized Loss
                Amount for that class, and second, in an amount equal to the
                Interest Carry Forward Amount for that class;

            4.  to each class of Class AV Certificates and Adjustable Rate
                Subordinate Certificates, pro rata based on the Certificate
                Principal Balances thereof, to the extent needed to pay any Net
                Rate Carryover for each such class; provided that any Adjustable
                Rate Loan Group Excess Cashflow remaining after the allocation
                to pay Net Rate Carryover based on the Certificate Principal
                Balances of those Certificates will be distributed to each class
                of Class AV Certificates and Adjustable Rate Subordinate
                Certificates with respect to which there remains any unpaid Net
                Rate Carryover (after the distribution based on Certificate
                Principal Balances), pro rata, based on the amount of the unpaid
                Net Rate Carryover;

            5.  if the Fixed Rate Overcollateralization Target Amount has at any
                previous time been met, to the holders of the class or classes
                of Class AF Certificates and Fixed Rate Subordinate Certificates
                then entitled to receive distributions in respect of principal,
                payable to those holders as part of the Principal Distribution
                Amount as described under "--Distributions--Distributions of
                Principal Distribution Amount for Loan Group 1" above, in an
                amount equal to the Extra Principal Distribution Amount for Loan
                Group 1 not covered by the Fixed Rate Loan Group Excess
                Cashflow;

            6.  concurrently, to the holders of each class of Class AF
                Certificates, pro rata based on the Unpaid Realized Loss Amounts
                for those classes remaining undistributed after application of
                the Fixed Rate Loan Group Excess Cashflow, in each case in an
                amount equal to the Unpaid Realized Loss Amount for the class
                remaining undistributed after application of the Fixed Rate Loan
                Group Excess Cashflow;

            7.  sequentially, to the holders of the Class MF-1, Class MF-2,
                Class MF-3, Class MF-4, Class MF-5, Class MF-6, Class MF-7,
                Class MF-8 and Class BF Certificates, in that order, in each
                case in an amount equal to the Unpaid Realized Loss Amount for
                that class remaining undistributed after application of the
                Fixed Rate Loan Group Excess Cashflow;

            8.  to the Carryover Reserve Fund, in an amount equal to the
                Required Carryover Reserve Fund Deposit (after giving effect to
                other deposits and withdrawals therefrom on the Distribution
                Date without regard to any amounts allocated to the issuing
                entity in respect of the Corridor Contract not required to cover
                Net Rate Carryover on the Class AF-1 Certificates on that
                Distribution Date);

            9.  to the Swap Account, in an amount equal to any Swap Termination
                Payment due to the Swap Counterparty as a result of a Swap
                Counterparty Trigger Event; and

            10. to fund distributions to the holders of the Class CV and Class
                A-R Certificates, in each case in the amounts specified in the
                Pooling and Servicing Agreement.

      Following the distributions pursuant to clauses 1 through 4 of the
preceding paragraph but prior to the distributions pursuant to clauses 5 through
10 of the preceding paragraph, the Trustee will make certain distributions from
the Swap Account, as described in further detail below under " -- The Swap
Contract".


                                      S-83



THE CORRIDOR CONTRACT

      Countrywide Home Loans has entered into an interest rate corridor
transaction with Bear Stearns Financial Products, Inc. ("BSFP" or the "CORRIDOR
CONTRACT COUNTERPARTY"), as evidenced by a confirmation between Countrywide Home
Loans and the Corridor Contract Counterparty, the "CORRIDOR CONTRACT") for the
benefit of the Class AF-1 Certificates.

      Pursuant to the Corridor Contract, the terms of an ISDA Master Agreement
were incorporated into the confirmation of the Corridor Contract, as if the ISDA
Master Agreement had been executed by Countrywide Home Loans and the Corridor
Contract Counterparty on the date the Corridor Contract was executed. The
Corridor Contract is subject to certain ISDA definitions. On the Closing Date,
pursuant to a "CORRIDOR CONTRACT ASSIGNMENT AGREEMENT," Countrywide Home Loans
will assign its rights under the Corridor Contract to The Bank of New York, as
corridor contract administrator (in this capacity, the "CORRIDOR CONTRACT
ADMINISTRATOR"), and Countrywide Home Loans, the Corridor Contract Administrator
and the Trustee will enter into a corridor contract administration agreement
(the "CORRIDOR CONTRACT ADMINISTRATION AGREEMENT") pursuant to which the
Corridor Contract Administrator will allocate any payments received under the
Corridor Contract between the Trustee and Countrywide Home Loans as described
below.

      On or prior to the Corridor Contract Termination Date, amounts (if any)
received under the Corridor Contract by the Corridor Contract Administrator and
allocated to the Trustee for the benefit of the issuing entity will be used to
pay Net Rate Carryover on the Class AF-1 Certificates as described above under
"--Distributions--Distributions of Funds from the Corridor Contract." Amounts
allocated to the Trustee in respect of the Corridor Contract will not be
available to pay Net Rate Carryover on any class of Certificates other than the
Class AF-1 Certificates. On any Distribution Date, after application of any
amounts allocated to the Trustee in respect of the Corridor Contract to pay Net
Rate Carryover, any remaining amounts will be distributed as described above
under "--Distributions--Distributions of Funds from the Corridor Contract" and
will not thereafter be available for payments of Net Rate Carryover for any
class of Certificates, unless the remaining amounts are allocated to the Trustee
in connection with an early termination of the Corridor Contract in which case
the amounts will be held by the Trustee until the Corridor Contract Termination
Date for distribution as described above under "-- Distributions --Distributions
of Funds from the Corridor Contract."

      With respect to the Corridor Contract and any Distribution Date on or
prior to the Corridor Contract Termination Date, the amount (if any) payable by
the Corridor Contract Counterparty under the Corridor Contract will equal the
product of:

      (i)     the excess (if any) of (x) the lesser of (A) One-Month LIBOR (as
determined by the Corridor Contract Counterparty) and (B) the Corridor Contract
Ceiling Rate for the Distribution Date over (y) the Corridor Contract Strike
Rate for that Distribution Date,

      (ii)    the Corridor Contract Notional Balance for that Distribution Date,
and

      (iii)   the actual number of days in the related calculation period,
divided by 360.

      Pursuant to the Corridor Contract Administration Agreement, on or prior to
each Distribution Date, the Corridor Contract Administrator will allocate any
payment received from the Corridor Contract Counterparty with respect to the
Corridor Contract and the Distribution Date (other than any termination payment,
which will be allocated as described below):

  o   first, to the Trustee, up to the amount that would be payable under the
      Corridor Contract if clause (ii) of the preceding paragraph were equal to
      the lesser of the Corridor Contract Notional Balance for the Distribution
      Date and the Certificate Principal Balance of the Class AF-1 Certificates
      immediately prior to the Distribution Date, referred to as a "NET CORRIDOR
      CONTRACT PAYMENT," and

  o   second, to Countrywide Home Loans, any remainder, referred to as an
      "EXCESS CORRIDOR CONTRACT PAYMENT."


                                      S-84



      Excess Corridor Contract Payments will not be available to cover Net Rate
Carryover on the Certificates.

      The "CORRIDOR CONTRACT NOTIONAL BALANCE," the "CORRIDOR CONTRACT STRIKE
RATE" and the "CORRIDOR CONTRACT CEILING RATE" for the Corridor Contract for
each Distribution Date are as described in the following table. In addition, the
Distribution Date occurring in the latest calendar month listed in the following
table is the date through which the Corridor Contract is scheduled to remain in
effect and is referred to as the "CORRIDOR CONTRACT TERMINATION DATE" for the
Corridor Contract.

                            CORRIDOR                            CORRIDOR
        MONTH OF            CONTRACT          CORRIDOR          CONTRACT
      DISTRIBUTION          NOTIONAL          CONTRACT          CEILING
          DATE             BALANCE ($)     STRIKE RATE (%)      RATE (%)
      --------------      -------------    ---------------      --------
      February 2006        147,232,000         7.66194          9.00000
      March 2006           144,734,657         7.11440          9.00000
      April 2006           141,927,078         6.42567          9.00000
      May 2006             138,274,932         6.63962          9.00000
      June 2006            133,777,143         6.42520          9.00000
      July 2006            128,437,253         6.63911          9.00000
      August 2006          122,263,735         6.42469          9.00000
      September 2006       115,270,071         6.42444          9.00000
      October 2006         107,480,294         6.63833          9.00000
      November 2006         99,020,838         6.42392          9.00000
      December 2006         90,218,580         6.63802          9.00000
      January 2007          81,592,033         6.42386          9.00000
      February 2007         73,392,786         6.42383          9.00000
      March 2007            65,464,411         7.11206          9.00000
      April 2007            57,702,799         6.42376          9.00000
      May 2007              50,104,467         6.63786          9.00000
      June 2007             42,666,008         6.42371          9.00000
      July 2007             35,384,086         6.63780          9.00000
      August 2007           28,255,431         6.42365          9.00000
      September 2007        21,276,845         6.42361          9.00000
      October 2007          14,445,193         6.63770          9.00000
      November 2007          7,757,408         6.42355          9.00000
      December 2007          1,210,484         6.63763          9.00000

      The Corridor Contract will be subject to early termination only in limited
circumstances. These circumstances generally include certain insolvency or
bankruptcy events in relation to the Corridor Contract Counterparty or the
Corridor Contract Administrator, the failure by the Corridor Contract
Counterparty (within three business days after notice of the failure is received
by the Corridor Contract Counterparty) to make a payment due under the Corridor
Contract, failure by the Corridor Contract Counterparty (within 30 days after
notice of such failure is received) to perform any other agreement made by it
under the Corridor Contract and the Corridor Contract becoming illegal or
subject to certain kinds of taxation.

      It will also be an additional termination event under the Corridor
Contract if the Corridor Contract Counterparty has failed to deliver any
information, report, certification or accountants' consent when and as required
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") and
Item 1115(b)(1) or (b)(2) of the Asset Backed Securities Regulation, 17 C.F.R.
Section Section 229.1100-229.1123 ("REGULATION AB") with respect to certain
reporting obligations of the Depositor with respect to the issuing entity, which
continues unremedied for the time period provided in the Corridor Contract, and
the Corridor Contract Counterparty fails to transfer the Corridor Contract, at
its sole cost and expense, in whole, but not in part, to a counterparty that,
(i) has agreed to deliver any information, report, certification or accountants'
consent when and as required under the Exchange Act and Regulation AB with
respect to certain reporting obligations of the Depositor and the issuing
entity, (ii) satisfies any rating requirement set forth in the Corridor
Contract, and (iii) is approved by the Depositor (which approval shall not be
unreasonably withheld and which approval is not needed if such assignment is to
a subsidiary of The Bear Stearns Companies, Inc., provided the Depositor is
given notice) and any rating agency, if applicable.

      If the Corridor Contract is terminated, the Corridor Contract Counterparty
may owe a termination payment, payable in a lump sum. Any termination payment
will be allocated by the Corridor Contract Administrator between the Trustee and
Countrywide Home Loans, based on, with respect to the Trustee, a fraction, the
numerator of which is the lesser of (x) the Corridor Contract Notional Balance
at the time of termination and (y) the Certificate Principal Balance of the
Class AF-1 Certificates at the time of termination, and the denominator of which
is the Corridor Contract Notional Balance at the time of termination, and with
respect to Countrywide Home Loans, a fraction, the numerator of which is the
excess, if any, of (x) the Corridor Contract Notional Balance at the time of
termination over (y) the Certificate Principal Balance of the Class AF-1
Certificates at the time of termination, and the denominator of which is the
Corridor Contract Notional Balance at the time of termination. The portion of
any termination payment that is allocated to the issuing entity will be held by
the Trustee until the applicable Corridor Contract Termination Date to pay any
Net Rate Carryover on the Class AF-1 Certificates. However, if a termination
occurs, we cannot assure you that a termination payment will be owing to the
Trustee. The Pooling and Servicing


                                      S-85



Agreement does not provide for the substitution of a replacement corridor
contract in the event of a termination of an existing Corridor Contract or in
any other circumstance.

      The significance percentage for the Corridor Contract is less than 10%.
The "SIGNIFICANCE PERCENTAGE" for the Corridor Contract is the percentage that
the significance estimate of the Corridor Contract represents of the Certificate
Principal Balance of the Class AF-1 Certificates. The "SIGNIFICANCE ESTIMATE" of
the Corridor Contract is determined based on a reasonable good-faith estimate of
the maximum probable exposure of the Corridor Contract, made in substantially
the same manner as that used in Countrywide Home Loans' internal risk management
process in respect of similar instruments.

      BSFP, a Delaware corporation, is a bankruptcy remote derivatives product
company based in New York, New York that has been established as a wholly owned
subsidiary of The Bear Stearns Companies, Inc. BSFP engages in a wide array of
over-the-counter interest rate, currency, and equity derivatives, typically with
counterparties who require a highly rated derivative provider. BSFP has a
ratings classification of "AAA" from Standard & Poor's and "Aaa" from Moody's
Investors Service.

      The Certificates do not represent an obligation of the Corridor Contract
Counterparty or the Corridor Contract Administrator. The holders of the
Certificates are not parties to or beneficiaries under any Corridor Contract or
the Corridor Contract Administration Agreement and will not have any right to
proceed directly against the Corridor Contract Counterparty in respect of its
obligations under any Corridor Contract or against the Corridor Contract
Administrator in respect of its obligations under the Corridor Contract
Administration Agreement.

      The Corridor Contract, the Corridor Contract Assignment Agreement and the
Corridor Contract Administration Agreement will each be filed with the SEC as an
exhibit to a Current Report on Form 8-K after the Closing Date.

THE SWAP CONTRACT

      Countrywide Home Loans has entered into an interest rate swap transaction
with Bear Stearns Financial Products, Inc. (the "SWAP COUNTERPARTY"), as
evidenced by a confirmation between Countrywide Home Loans and the Swap
Counterparty (the "SWAP CONTRACT"). Pursuant to the Swap Contract, the terms of
an ISDA Master Agreement were incorporated into the confirmation of the Swap
Contract, as if the ISDA Master Agreement had been executed by Countrywide Home
Loans and the Swap Counterparty on the date that the Swap Contract was executed.
The Swap Contract is subject to certain ISDA definitions. On the Closing Date,
pursuant to a "SWAP CONTRACT ASSIGNMENT AGREEMENT," Countrywide Home Loans will
assign its rights under the Swap Contract to The Bank of New York, as swap
contract administrator (in such capacity, the "SWAP CONTRACT ADMINISTRATOR"),
and Countrywide Home Loans, the Swap Contract Administrator and the Trustee
(acting as trustee of the swap trust) will enter into a swap contract
administration agreement (the "SWAP CONTRACT ADMINISTRATION AGREEMENT") pursuant
to which the Swap Contract Administrator will allocate any payments received
under the Swap Contract between the Trustee (acting as trustee of the swap
trust) and Countrywide Home Loans as described below and pursuant to which the
Swap Contract Administrator will remit to the Swap Counterparty any funds
received from the Trustee (acting as trustee of the swap trust) for payment to
the Swap Counterparty.

      With respect to any Distribution Date on or prior to the Swap Contract
Termination Date, the amount payable by the Swap Contract Administrator to the
Swap Counterparty under the Swap Contract will equal the product of:

      (i)    a fixed rate of 4.72% per annum,

      (ii)   the lesser of (a) the Swap Contract Notional Balance for the
Distribution Date and (b) the aggregate Certificate Principal Balance of the
Swap Certificates immediately prior to such Distribution Date, and

      (iii)  the number of days in the related calculation period (calculated on
the basis of a 360-day year of twelve 30-day months), divided by 360.


                                      S-86



      With respect to any Distribution Date on or prior to the Swap Contract
Termination Date, the amount payable by the Swap Counterparty to the Swap
Contract Administrator under the Swap Contract will equal the product of:

      (i)    One-Month LIBOR (as determined by the Swap Counterparty),

      (ii)   the lesser of (a) the Swap Contract Notional Balance for the
Distribution Date and (b) the aggregate Certificate Principal Balance of the
Swap Certificates immediately prior to such Distribution Date, and

      (iii)  the actual number of days in the related calculation period,
divided by 360.

      With respect to any Distribution Date, the Swap Contract Administrator or
the Swap Counterparty, as the case may be, will only be required to make a "NET
SWAP PAYMENT" to the other party that is equal to the excess of the payment that
it is obligated to make to the other party as described in the two preceding
paragraphs over the payment that it is entitled to receive from that other party
as described in the two preceding paragraphs. Any Net Swap Payment owed by the
Swap Counterparty with respect to any Distribution Date will be payable on the
business day preceding such Distribution Date, while any Net Swap Payment owed
to the Swap Counterparty with respect to any Distribution Date will be payable
on such Distribution Date.

      In the event that a Net Swap Payment and/or a Swap Termination Payment
(other than a Swap Termination Payment due to a Swap Counterparty Trigger Event)
is payable to the Swap Counterparty with respect to any Distribution Date, the
Trustee will deduct from Interest Funds for Loan Group 2 the amount of such Net
Swap Payment or Swap Termination Payment as described under clause (1) under "--
Distributions -- Distributions of Interest Funds for Loan Group 2" above (and to
the extent that Interest Funds for Loan Group 2 are insufficient, the Trustee
will deduct from the Principal Remittance Amount for Loan Group 2 any additional
amounts necessary to make such Net Swap Payment and/or Swap Termination Payment
due to the Swap Counterparty) and deposit the amount of such Net Swap Payment or
Swap Termination Payment in the Swap Account maintained on behalf of the swap
trust.

      In the event that a Swap Termination Payment due to a Swap Counterparty
Trigger Event is payable to the Swap Counterparty with respect to any
Distribution Date, the Trustee will deduct from Adjustable Rate Loan Group
Excess Cashflow the amount of such Swap Termination Payment as described under
clause (9) under "-- Overcollateralization Provisions -- Adjustable Rate Loan
Group Excess Cashflow" above and remit such amount to the Swap Account
maintained on behalf of the swap trust.

      In the event that a Net Swap Payment is payable from the Swap Counterparty
with respect to any Distribution Date, the Swap Contract Administrator will
remit to the Trustee on behalf of the swap trust and for deposit into the Swap
Account an amount equal to the sum of (a) any Current Interest and Interest
Carry Forward Amounts with respect to the Swap Certificates, (b) any Net Rate
Carryover with respect to the Swap Certificates and (c) any Unpaid Realized Loss
Amounts with respect to the Swap Certificates, in each case that remain unpaid
following distribution of the Interest Funds for Loan Group 2 and the Adjustable
Rate Loan Group Excess Cashflow for the Distribution Date, as well as (d) any
remaining Adjustable Rate Overcollateralization Deficiency Amount that remains
following distribution of the Interest Funds for Loan Group 2 and the Adjustable
Rate Loan Group Excess Cashflow for the Distribution Date. Any portion of any
Net Swap Payment not remitted by the Swap Contract Administrator to the Trustee
(acting as trustee of the swap trust) with respect to any Distribution Date will
be remitted to Countrywide Home Loans and will not be available to make
distributions in respect of any class of Certificates.

      In the event that the Swap Contract is terminated, Countrywide Home Loans
will be required to assist the Swap Contract Administrator in procuring a
replacement swap contract with terms approximating those of the original Swap
Contract. In the event that a Swap Termination Payment was payable by the Swap
Counterparty in connection with the termination of the original Swap Contract,
that Swap Termination Payment will be used to pay any upfront amount in
connection with the replacement swap contract, and any remaining portion of that
Swap Termination Payment will be distributed to Countrywide Home Loans and will
not be available for distribution on any class of certificates. In the event
that the swap counterparty in respect of a replacement swap contract pays any
upfront amount to the Swap Contract Administrator in connection with entering
into the replacement swap contract,


                                      S-87



if that upfront amount is received prior to the Distribution Date on which the
Swap Termination Payment is due to the Swap Counterparty under the original Swap
Contract, that upfront amount will be included in the Interest Funds for Loan
Group 2 and the Principal Distribution Amount for Loan Group 2 on that
Distribution Date to the extent necessary to cover that Swap Termination
Payment, and any excess will be distributed to Countrywide Home Loans, Inc. If
that upfront amount is received after the Distribution Date on which the Swap
Termination Payment was due to the Swap Counterparty under the original Swap
Contract, or in the event that the Swap Contract is terminated and no
replacement swap contract can be procured on terms approximating those of the
original Swap Contract and a Swap Termination Payment was payable by the Swap
Counterparty, that upfront amount or Swap Termination Payment payable by the
Swap Counterparty, as the case may be, will be retained by the Swap Contract
Administrator and remitted to the Trustee on behalf of the swap trust on
subsequent Distribution Dates up to and including the Swap Contract Termination
Date to cover the amounts described in clauses (a), (b), (c) and (d) of the
preceding paragraph. Following the Swap Contract Termination Date, any remainder
of an upfront amount paid by a replacement swap counterparty, or of a Swap
Termination Payment paid by a Swap Counterparty, will be distributed to
Countrywide Home Loans and will not be available to make distributions in
respect of any class of certificates.

      Following the distributions of Adjustable Rate Loan Group Excess Cashflow
pursuant to clauses 1 through 4 under " -- Overcollateralization Provisions --
Adjustable Rate Loan Group Excess Cashflow" and following the distributions of
Fixed Rate Loan Group Excess Cashflow pursuant to clauses 1 through 4 under " --
Overcollateralization Provisions -- Fixed Rate Loan Group Excess Cashflow", the
Trustee, acting on behalf of the swap trust, shall distribute all amounts on
deposit in the Swap Account in the following amounts and order of priority:

            (1)   to the Swap Contract Administrator for payment to the Swap
      Counterparty, any Net Swap Payment payable to the Swap Counterparty with
      respect to such Distribution Date;

            (2)   to the Swap Contract Administrator for payment to the Swap
      Counterparty, any Swap Termination Payment (other than a Swap Termination
      Payment due to a Swap Counterparty Trigger Event) payable to the Swap
      Counterparty with respect to such Distribution Date;

            (3)   concurrently to the holders of each class of Class AV
      Certificates, any remaining Current Interest and Interest Carry Forward
      Amount, pro rata based on their respective entitlements;

            (4)   sequentially, to the holders of the Class MV-1, Class MV-2,
      Class MV-3, Class MV-4, Class MV-5, Class MV-6, Class MV-7, Class MV-8 and
      Class BV Certificates, in that order, in each case in an amount equal to
      any remaining Current Interest and Interest Carry Forward Amount for the
      class;

            (5)   to the holders of the class or classes of Class AV
      Certificates and Adjustable Rate Subordinate Certificates then entitled to
      receive distributions in respect of principal, in an aggregate amount
      equal to the Adjustable Rate Overcollateralization Deficiency Amount
      remaining unpaid following the distribution of Adjustable Rate Loan Group
      Excess Cashflow as described above under " -- Overcollateralization
      Provisions" payable to such holders of each such class in the same manner
      in which the Extra Principal Distribution Amount in respect of Loan Group
      2 would be distributed to such classes as described under " --
      Overcollateralization Provisions -- Adjustable Rate Loan Group Excess
      Cashflow" above;

            (6)   to the holders of each class of Class AV Certificates and
      Adjustable Rate Subordinate Certificates, to the extent needed to pay any
      remaining Net Rate Carryover for each such class, pro rata, based on the
      amount of such remaining Net Rate Carryover;

            (7)   concurrently, to the holders of each class of Class AV
      Certificates, pro rata based on the remaining Unpaid Realized Loss Amounts
      for those classes, in each case in an amount equal to the remaining Unpaid
      Realized Loss Amount for the class; and


                                      S-88



            (8)   sequentially, to the holders of the Class MV-1, Class MV-2,
      Class MV-3, Class MV-4, Class MV-5, Class MV-6, Class MV-7, Class MV-8 and
      Class BV Certificates, in that order, in each case in an amount equal to
      the remaining Unpaid Realized Loss Amount for the class.

      Following the distributions of Adjustable Rate Loan Group Excess Cashflow
pursuant to clauses 5 through 10 under " -- Overcollateralization Provisions --
Adjustable Rate Loan Group Excess Cashflow" and following the distributions of
Fixed Rate Loan Group Excess Cashflow pursuant to clauses 5 through 9 under "--
Overcollateralization Provisions -- Fixed Rate Loan Group Excess Cashflow", the
Trustee, acting on behalf of the swap trust, shall distribute any remaining
amount on deposit in the Swap Account to the Swap Contract Administrator for
payment to the Swap Counterparty, only to the extent necessary to cover any Swap
Termination Payment due to a Swap Counterparty Trigger Event payable to the Swap
Counterparty with respect to such Distribution Date.

      The "SWAP CONTRACT NOTIONAL BALANCE" for each Distribution Date is as
described in the following table. In addition, the Distribution Date occurring
in the latest calendar month listed in the following table is the date through
which the Swap Contract is scheduled to remain in effect and is referred to as
the "SWAP CONTRACT TERMINATION DATE" for the Swap Contract.

                      MONTH OF             SWAP CONTRACT
                    DISTRIBUTION             NOTIONAL
                        DATE                BALANCE ($)
                 -------------------      --------------
                 February 2006......        284,442,757
                 March 2006.........        282,536,757
                 April 2006.........        280,260,618
                 May 2006...........        277,617,234
                 June 2006..........        274,610,947
                 July 2006..........        271,247,566
                 August 2006........        267,534,362
                 September 2006.....        263,480,318
                 October 2006.......        259,095,342
                 November 2006......        254,391,014
                 December 2006......        249,380,290
                 January 2007.......        244,077,457
                 February 2007......        238,498,073
                 March 2007.........        232,659,104
                 April 2007.........        226,578,245
                 May 2007...........        220,274,443
                 June 2007..........        213,767,602
                 July 2007..........        207,078,482
                 August 2007........        200,229,776
                 September 2007.....        193,603,912
                 October 2007.......        187,196,147
                 November 2007......        180,999,335
                 December 2007......        175,006,557
                 January 2008.......        169,211,124
                 February 2008......        161,503,607
                 March 2008.........        154,184,242
                 April 2008.........        147,231,658
                 May 2008...........        140,625,821
                 June 2008..........        134,347,865
                 July 2008..........        128,380,016
                 August 2008........        124,031,364
                 September 2008.....        119,829,471
                 October 2008.......        115,769,329
                 November 2008......        111,846,171
                 December 2008......        108,055,388
                 January 2009.......        104,392,527
                 February 2009......         98,844,408
                 March 2009.........         93,610,582
                 April 2009.........         88,672,384
                 May 2009...........         84,012,338
                 June 2009..........         79,614,028
                 July 2009..........         75,462,041
                 August 2009........         72,814,411
                 September 2009.....         70,259,367
                 October 2009.......         67,793,642
                 November 2009......         65,414,124
                 December 2009......         63,117,807
                 January 2010.......         60,901,790
                 February 2010......         58,769,593
                 March 2010.........         56,711,786
                 April 2010.........         54,725,784
                 May 2010...........         52,809,083
                 June 2010..........         50,959,273
                 July 2010..........         49,174,025
                 August 2010........         47,454,425
                 September 2010.....         45,794,758
                 October 2010.......         44,192,939
                 November 2010......         42,646,959
                 December 2010......         41,154,874
                 January 2011.......         39,713,897

      A "SWAP TERMINATION PAYMENT" is a termination payment required to be made
by either the Swap Contract Administrator or the Swap Counterparty pursuant to
the Swap Contract as a result of an early termination of the Swap Contract.

      The Swap Contract will be subject to early termination upon an event of
default or an early termination event under the Swap Contract. Events of default
under the Swap Contract include, among other things, the following:

      o     failure to make a payment due under the Swap Contract, three
            business days after notice of such failure is received,

      o     certain insolvency or bankruptcy events, and

      o     a merger by the Swap Counterparty without an assumption of its
            obligations under the Swap Contract.


                                      S-89



      Early termination events under the Swap Contract include, among other
things:

      o     illegality (which generally relates to changes in law causing it to
            become unlawful for either party (or its guarantor, if applicable)
            to perform its obligations under the Swap Contract or guaranty, as
            applicable),

      o     a tax event (which generally relates to either party to the Swap
            Contract receiving a payment under the Swap Contract from which an
            amount has been deducted or withheld for or on account of taxes or
            paying an additional amount on account of an indemnifiable tax),

      o     a tax event upon merger (which generally relates to either party
            receiving a payment under the Swap Contract from which an amount has
            been deducted or withheld for or on account of taxes or paying an
            additional amount on account of an indemnifiable tax, in each case,
            resulting from a merger),

      o     an amendment to the Pooling and Servicing Agreement that would
            materially adversely affect the Swap Counterparty is made without
            the prior written consent of the Swap Counterparty, and

      o     an Applied Realized Loss Amount is applied to reduce the Certificate
            Principal Balance of any class of Class AF or Class AV Certificates.

      In addition to the termination events specified above, it will be a
termination event under the Swap Contract in the event that (A) either (i) the
unsecured, long-term senior debt obligations of the Swap Counterparty are rated
below "A1" by Moody's or are rated "A1" by Moody's and such rating is on watch
for possible downgrade (but only for so long as it is on watch for possible
downgrade) or (ii) the unsecured, short-term debt obligations of the Swap
Counterparty are rated below "P-1" by Moody's or are rated "P-1" by Moody's and
such rating is on watch for possible downgrade (but only for so long as it is on
watch for possible downgrade), (B) no short-term rating is available from
Moody's and the unsecured, long-term senior debt obligations of the Swap
Counterparty are rated below "Aa3" by Moody's or are rated "Aa3" by Moody's and
such rating is on watch for possible downgrade (but only for so long as it is on
watch for possible downgrade), or (C) either (i) the unsecured, short-term debt
obligations of the Swap Counterparty are rated below "A-1" by S&P or (ii) if the
Swap Counterparty does not have a short-term rating from S&P, the unsecured,
long-term senior debt obligations of the Swap Counterparty are rated below "A+"
by S&P (such an event a, "Collateralization Event"), and the Swap Counterparty
does not, within 30 days, (a) cause another entity to replace the Swap
Counterparty that meets or exceeds the Swap Counterparty Ratings Requirement and
that is approved by the Swap Contract Administrator on terms substantially
similar to the Swap Contract; (b) obtain a guaranty of, or a contingent
agreement of another person that satisfies the Swap Counterparty Ratings
Requirement, to honor the Swap Counterparty's obligations under the Swap
Contract, provided that such other person is approved by the Swap Contract
Administrator; (c) post collateral satisfactory to the applicable Rating
Agencies; or (d) establish any other arrangement satisfactory to the applicable
Rating Agency which will be sufficient to restore the immediately prior ratings
of the Swap Certificates.

      "SWAP COUNTERPARTY RATINGS REQUIREMENT" means (a) either (i) the
unsecured, short-term debt obligations of the substitute counterparty (or its
credit support provider) are rated at least "A-1" by S&P or (ii) if the
substitute counterparty does not have a short-term rating from S&P, the
unsecured, long-term senior debt obligations of the substitute counterparty (or
its credit support provider) are rated at least "A+" by S&P, and (b) either (i)
the unsecured, long-term senior debt obligations of such substitute counterparty
(or its credit support provider) are rated at least "A1" by Moody's (and if
rated "A1" by Moody's, such rating is not on watch for possible downgrade) and
the unsecured, short-term debt obligations of such substitute counterparty (or
its credit support provider) are rated at least "P-1" by Moody's (and if rated
"P-1" by Moody's, such rating is not on watch for possible downgrade and
remaining on watch for possible downgrade), or (ii) if such substitute
counterparty (or its credit support provider) does not have a short-term debt
rating from Moody's, the unsecured, long-term senior debt obligations of such
substitute counterparty (or its credit support provider) are rated at least
"Aa3" by Moody's (and if rated "Aa3" by Moody's, such rating is not on watch for
possible downgrade).


                                      S-90



      It will also be a termination event under the Swap Contract if the Swap
Counterparty fails to satisfy the following ratings criteria: (A) the unsecured,
long-term senior debt obligations of the Swap Counterparty are rated at least
"BBB-" by S&P, and (B) either (i) the unsecured, long-term senior debt
obligations of the Swap Counterparty are rated at least "A2" by Moody's
(including if such rating is on watch for possible downgrade) and the unsecured,
short-term debt obligations of the Swap Counterparty are rated at least "P-1" by
Moody's (including if such rating is on watch for possible downgrade) or (ii) if
the Swap Counterparty does not have a short-term rating from Moody's, the
unsecured, long-term senior debt obligations of the Swap Counterparty are rated
at least "A1" by Moody's (including if such rating is on watch for possible
downgrade); and the Swap Counterparty does not, within 10 days, after the
occurrence of such a downgrade or withdrawal by S&P or Moody's, as applicable,
take the action described in either clause (a) or (b) above.

      Finally, an additional termination event under the Swap Contract will
exist if the Swap Counterparty has failed to deliver any information, report,
certification or accountants' consent when and as required under the Exchange
Act and Item 1115(b)(1) or (b)(2) of Regulation AB with respect to certain
reporting obligations of the Depositor with respect to the issuing entity, which
continues unremedied for the time period provided in the Swap Contract, and the
Swap Counterparty fails to transfer the Swap Contract at its sole cost and
expense, in whole, but not in part, to a counterparty that, (i) has agreed to
deliver any information, report, certification or accountants' consent when and
as required under the Exchange Act and Regulation AB with respect to certain
reporting obligations of the Depositor and the issuing entity, (ii) satisfies
any rating requirement set forth in the Swap Contract, and (iii) is approved by
the Depositor (which approval shall not be unreasonably withheld and which
approval is not needed if such assignment is to a subsidiary of The Bear Stearns
Companies, Inc., provided the Depositor is given notice) and any rating agency,
if applicable

      "SWAP COUNTERPARTY TRIGGER EVENT" means an event of default under the Swap
Contract with respect to which the Swap Counterparty is the sole defaulting
party or a termination event under the Swap Contract (other than illegality, a
tax event or a tax event upon merger of the Swap Counterparty) with respect to
which the Swap Counterparty is the sole affected party or with respect to a
termination resulting from a ratings downgrade of the Swap Counterparty (as
described above).

      The significance percentage for the Swap Contract is less than 10%. The
"SIGNIFICANCE PERCENTAGE" for the Swap Contract is the percentage that the
significance estimate of the Swap Contract represents of the aggregate
Certificate Principal Balance of the Swap Certificates. The "SIGNIFICANCE
ESTIMATE" of the Swap Contract is determined based on a reasonable good-faith
estimate of the maximum probable exposure of the Swap Contract, made in
substantially the same manner as that used in Countrywide Home Loans' internal
risk management process in respect of similar instruments.

      The Certificates do not represent an obligation of the Swap Counterparty
or the Swap Contract Administrator. The holders of the Certificates are not
parties to or beneficiaries under the Swap Contract or the Swap Contract
Administration Agreement and will not have any right to proceed directly against
the Swap Counterparty in respect of its obligations under the Swap Contract or
against the Swap Contract Administrator in respect of its obligations under the
Swap Contract Administration Agreement.

      The Swap Contract, the Swap Contract Assignment Agreement and the Swap
Contract Administration Agreement will each be filed with the SEC as an exhibit
to a Current Report on Form 8-K after the Closing Date.

CALCULATION OF ONE-MONTH LIBOR

      On the second LIBOR Business Day preceding the commencement of each
Accrual Period for the Adjustable Rate Certificates (each such date, an
"INTEREST DETERMINATION DATE"), the Trustee will determine the London interbank
offered rate for one-month United States dollar deposits ("ONE-MONTH LIBOR") for
the Accrual Period on the basis of such rate as it is quoted on the Bloomberg
Terminal for that Interest Determination Date. If such rate is not quoted on the
Bloomberg terminal (or such other service, or if such service is no longer
offered, such other service for displaying LIBOR or comparable rates as may be
reasonably selected by the Trustee), One-Month LIBOR for the applicable Accrual
Period will be the Reference Bank Rate as defined in this prospectus supplement.
If no such quotations can be obtained and no Reference Bank Rate is available,
One-Month LIBOR will be the One-Month LIBOR applicable to the preceding Accrual
Period. The "REFERENCE BANK RATE" with respect to any Accrual


                                      S-91



Period, means the arithmetic mean (rounded upwards, if necessary, to the nearest
whole multiple of 0.0125%) of the offered rates for United States dollar
deposits for one month that are quoted by the Reference Banks as of 11:00 a.m.,
New York City time, on the related Interest Determination Date to prime banks in
the London interbank market for a period of one month in amounts approximately
equal to the aggregate Certificate Principal Balance of all Adjustable Rate
Certificates for the Accrual Period, provided that at least two such Reference
Banks provide such rate. If fewer than two offered rates appear, the Reference
Bank Rate will be the arithmetic mean (rounded upwards, if necessary, to the
nearest whole multiple of 0.03125%) of the rates quoted by one or more major
banks in New York City, selected by the Trustee, as of 11:00 a.m., New York City
time, on such date for loans in U.S. dollars to leading European banks for a
period of one month in amounts approximately equal to the aggregate Certificate
Principal Balance of all Adjustable Rate Certificates for the Accrual Period. As
used in this section, "LIBOR BUSINESS DAY" means a day on which banks are open
for dealing in foreign currency and exchange in London and New York City; and
"REFERENCE BANKS" means leading banks selected by the Trustee and engaged in
transactions in Eurodollar deposits in the international Eurocurrency market:

            (1)   with an established place of business in London,

            (2)   which have been designated as such by the Trustee and

            (3)   which are not controlling, controlled by, or under common
                  control with, the Depositor, Countrywide Servicing or any
                  successor Master Servicer.

      The establishment of One-Month LIBOR on each Interest Determination Date
by the Trustee and the Trustee's calculation of the rate of interest applicable
to the Adjustable Rate Certificates for the related Accrual Period will (in the
absence of manifest error) be final and binding.

CARRYOVER RESERVE FUND

      The Pooling and Servicing Agreement will require the Trustee to establish
an account (the "CARRYOVER RESERVE FUND"), which is held in trust by the Trustee
on behalf of the holders of the interest-bearing certificates. On the Closing
Date, Countrywide Home Loans will deposit $10,000 in the Carryover Reserve Fund.
The Carryover Reserve Fund will not be an asset of any REMIC.

      On each Distribution Date, the Trustee will deposit in the Carryover
Reserve Fund amounts allocated to the issuing entity in respect of the Corridor
Contract. On each Distribution Date, the amounts allocated to the issuing entity
in respect of the Corridor Contract will be distributed to the Class AF-1
Certificates to pay any Net Rate Carryover on the Class AF-1 Certificates as
described under "-- Distributions -- Distributions of Funds from the Corridor
Contract" above.

      On each Distribution Date, to the extent that Fixed Rate Loan Group Excess
Cashflow is available as described under "-- Overcollateralization Provisions --
Fixed Rate Loan Group Excess Cashflow" above or Adjustable Rate Loan Group
Excess Cashflow is available as described under "-- Overcollateralization
Provisions -- Adjustable Rate Loan Group Excess Cashflow" above, the Trustee
will deposit in the Carryover Reserve Fund the amount needed to pay any Net Rate
Carryover as described under "-- Overcollateralization Provisions" above.

      On each Distribution Date, to the extent that Fixed Rate Loan Group Excess
Cashflow is available as described under "-- Overcollateralization Provisions --
Fixed Rate Loan Group Excess Cashflow" above or Adjustable Rate Loan Group
Excess Cashflow is available as described under "-- Overcollateralization
Provisions -- Adjustable Rate Loan Group Excess Cashflow" above, the Trustee
will deposit in the Carryover Reserve Fund an amount equal to the excess, if
any, of (i) $1,000 over (ii) the amount of funds on deposit in the Carryover
Reserve Fund following all other deposits to, and withdrawals from, the
Carryover Reserve Fund on the Distribution Date (the "REQUIRED CARRYOVER RESERVE
FUND DEPOSIT").


                                      S-92



APPLIED REALIZED LOSS AMOUNTS

      If on any Distribution Date, after giving effect to the distributions
described above, the aggregate Certificate Principal Balance of the Class AF and
Fixed Rate Subordinate Certificates exceeds the sum of the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 1 and the amount on
deposit in the Pre-Funding Account in respect of Loan Group 1, the amount of the
excess will be applied first to reduce the Certificate Principal Balances of the
Class BF, Class MF-8, Class MF-7, Class MF-6, Class MF-5, Class MF-4, Class
MF-3, Class MF-2 and Class MF-1 Certificates, in that order, in each case until
the Certificate Principal Balance of the class has been reduced to zero, and
then to reduce the Certificate Principal Balance of each class of Class AF
Certificates, on a pro rata basis according to their respective Certificate
Principal Balances, until the Certificate Principal Balances of such classes
have been reduced to zero.

      If on any Distribution Date, after giving effect to the distributions
described above, the aggregate Certificate Principal Balance of the Class AV
Certificates and Adjustable Rate Subordinate Certificates exceeds the sum of the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2 and the
amount on deposit in the Pre-Funding Account in respect of Loan Group 2, the
amount of the excess will be applied first to reduce the Certificate Principal
Balances of the Class BV, Class MV-8, Class MV-7, Class MV-6, Class MV-5, Class
MV-4, Class MV-3, Class MV-2 and Class MV-1 Certificates, in that order, in each
case until the Certificate Principal Balance of the class has been reduced to
zero, and then to reduce the Certificate Principal Balance of each class of
Class AV Certificates, on a pro rata basis according to their respective
Certificate Principal Balances, until the Certificate Principal Balances of such
classes have been reduced to zero. A reduction described in this paragraph or
the immediately preceding paragraph is referred to as an "APPLIED REALIZED LOSS
AMOUNT."

      If the Certificate Principal Balance of a class of Certificates has been
reduced through the application of Applied Realized Loss Amounts as described
above, interest will accrue on the Certificate Principal Balance as so reduced
unless the Certificate Principal Balance is subsequently increased due to the
allocation of Subsequent Recoveries to the Certificate Principal Balance of the
class as described in the definition of "Certificate Principal Balance"
described in this prospectus supplement under "-- Glossary of Terms --
Definitions Related to Distribution Dates and Collections."

REPORTS TO CERTIFICATEHOLDERS

      On each Distribution Date, the Trustee will forward by first class mail to
each certificateholder, the Master Servicer and the Depositor a statement
generally setting forth, among other information:

            (1)   the amount of the related distribution to holders of the
      Certificates allocable to principal, separately identifying:

                  (a)   the aggregate amount of any Principal Prepayments
                        included therein, and

                  (b)   the aggregate of all Scheduled Payments of principal
                        included therein,

            (2)   the amount of the distribution to holders of the Certificates
      allocable to interest,

            (3)   the Interest Carry Forward Amounts for each class of
      Certificates (if any),

            (4)   the Certificate Principal Balance of each class of
      Certificates after giving effect to (i) all distributions allocable to
      principal on the Distribution Date, (ii) the allocation of any Applied
      Realized Loss Amounts for the Distribution Date and (iii) the allocation
      of any Subsequent Recoveries for the Distribution Date,

            (5)   the aggregate Stated Principal Balance of the Mortgage Loans
      in each Loan Group for the following Distribution Date,


                                      S-93



            (6)   the amount of the Master Servicing Fees and Special Servicing
      Fees paid to or retained by the Master Servicer and the Special Servicer,
      respectively, for the related Due Period,

            (7)   the Pass-Through Rate for each class of Certificates for the
      Distribution Date,

            (8)   the amount of Advances for each Loan Group included in the
      distribution on the Distribution Date,

            (9)   the number and aggregate principal amounts of Mortgage Loans
      in each Loan Group:

                  (a)   delinquent (exclusive of related Mortgage Loans in
                        foreclosure):

                        30 to 59 days,

                        60 to 89 days and

                        90 or more days, and

                  (b)   in foreclosure and delinquent:

                        30 to 59 days,

                        60 to 89 days and

                        90 or more days,

      in each case as of the close of business on the last day of the calendar
      month preceding the Distribution Date,

            (10)  with respect to any Mortgage Loan in each Loan Group that
      became an REO Property during the preceding calendar month, the loan
      number and Stated Principal Balance for the Distribution Date of the
      Mortgage Loan and the date of acquisition thereof,

            (11)  whether a Fixed Rate Trigger Event or an Adjustable Rate
      Trigger Event is in effect,

            (12)  the total number and Stated Principal Balance of any REO
      Properties in each Loan Group as of the close of business on the
      Determination Date preceding the Distribution Date,

            (13)  any Net Rate Carryover paid and all remaining Net Rate
      Carryover remaining on each class of Certificates on the Distribution
      Date,

            (14)  the amounts, if any, due to the issuing entity, and the
      amounts received, in respect of the Corridor Contract for the Distribution
      Date,

            (15)  the amount of any Net Swap Payment and any Swap Termination
      Payment (a) payable to the Swap Counterparty with respect to such
      Distribution Date or (b) payable to the Swap Contract Administrator for
      the Distribution Date and allocated to the swap trust;

            (16)  the amount of Applied Realized Loss Amounts and Subsequent
      Recoveries, if any, applied to each class of Certificates for the
      Distribution Date, and

            (17)  all payments made by the Master Servicer in respect of
      Compensating Interest for the Distribution Date.

      The monthly statement is prepared by the Trustee based on information
provided by the Master Servicer. The Trustee is not responsible for recomputing,
recalculating or verifying the information provided to it by the Master Servicer
and will be permitted to conclusively rely on any information provided to it by
the Master Servicer. The report to certificateholders may include additional or
other information of a similar nature to that specified above.


                                      S-94



      The Trustee may, at its option, make the statements described above
available to certificateholders on the Trustee's website (assistance in using
the website service may be obtained by calling the Trustee's customer service
desk at (800) 254-2826). In addition, within 60 days after the end of each
calendar year, the Trustee will prepare and deliver to each certificateholder of
record during the previous calendar year a statement containing information
necessary to enable certificateholders to prepare their tax returns. The
statements will not have been examined and reported upon by an independent
public accountant.

AMENDMENT

      The Pooling and Servicing Agreement may be amended by the Depositor, the
Master Servicer, the Sellers and the Trustee, with the consent of the NIM
Insurer but without the consent of any of the certificateholders, for any of the
purposes set forth under "The Agreements -- Amendment" in the prospectus. In
addition, the Pooling and Servicing Agreement may be amended by the Depositor,
the Master Servicer, the Sellers, the Trustee and the holders of a majority in
interest of each class of Certificates affected thereby for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Pooling and Servicing Agreement or of modifying in any manner
the rights of the certificateholders; provided, however, that no amendment may:

            (1)   reduce in any manner the amount of, or delay the timing of,
      payments required to be distributed on any Certificate without the consent
      of the holder of the Certificate,

            (2)   adversely affect in any material respect the interests of the
      holders of any class of Certificates in a manner other than as set forth
      in clause (1) above, without the consent of the holders of Certificates of
      the class evidencing, as to that class, Percentage Interests aggregating
      66%, or

            (3)   reduce the aforesaid percentage of aggregate outstanding
      principal amounts of Certificates of each class, the holders of which are
      required to consent to an amendment, without the consent of the holders of
      all Certificates of the class.

VOTING RIGHTS

      As of any date of determination:

  o   holders of the Class PF, Class PV, Class CF, Class CV and Class A-R
      Certificates will each be allocated 1% of all voting rights in respect of
      the Certificates (collectively, the "VOTING RIGHTS") (for a total of 5% of
      the Voting Rights), and

  o   holders of the other classes of Certificates will be allocated the
      remaining Voting Rights in proportion to their respective outstanding
      Certificate Principal Balances.

      Voting Rights will be allocated among the Certificates of each class in
accordance with their respective Percentage Interests.

OPTIONAL PURCHASE OF DEFAULTED LOANS

      As to any Mortgage Loan that is delinquent in payment by 150 days or more,
the Master Servicer may, at its option but subject to certain conditions
specified in the Pooling and Servicing Agreement, purchase the Mortgage Loan at
a price equal to 100% of the Stated Principal Balance thereof plus accrued
interest thereon at the applicable Net Mortgage Rate from the date through which
interest was last paid by the related borrower or advanced to the first day of
the month in which the amount is to be distributed to certificateholders. The
Master Servicer must exercise this right, if at all, on or before the last day
of the calendar month in which the related Mortgage Loan became 150 days
delinquent.


                                      S-95



EVENTS OF DEFAULT; REMEDIES

      Events of Default will consist of:

            (1)   any failure by the Master Servicer to deposit in the
      Certificate Account or the Distribution Account the required amounts or
      remit to the Trustee any payment (including an Advance required to be made
      under the terms of the Pooling and Servicing Agreement) which continues
      unremedied for five calendar days (or in the case of an Advance, one
      Business Day) after written notice of the failure shall have been given to
      the Master Servicer by the Trustee, the NIM Insurer or the Depositor, or
      to the Trustee, the NIM Insurer and the Master Servicer by the holders of
      Certificates evidencing not less than 25% of the Voting Rights,

            (2)   any failure by the Master Servicer to observe or perform in
      any material respect any other of its covenants or agreements, or any
      breach of a representation or warranty made by the Master Servicer, in the
      Pooling and Servicing Agreement, which in each case continues unremedied
      for 60 days after the giving of written notice of the failure to the
      Master Servicer by the Trustee, the NIM Insurer or the Depositor, or to
      the Trustee by the holders of Certificates evidencing not less than 25% of
      the Voting Rights,

            (3)   a decree or order of a court or agency or supervisory
      authority having jurisdiction in the premises for the appointment of a
      receiver or liquidator in any insolvency, readjustment of debt,
      marshalling of assets and liabilities or similar proceedings, or for the
      winding-up or liquidation of its affairs, shall have been entered against
      the Master Servicer and the decree or order shall have remained in force
      undischarged or unstayed for a period of 60 consecutive days,

            (4)   the Master Servicer shall consent to the appointment of a
      receiver or liquidator in any insolvency, readjustment of debt,
      marshalling of assets and liabilities or similar proceedings of or
      relating to the Master Servicer or all or substantially all of the
      property of the Master Servicer,

            (5)   the Master Servicer shall admit in writing its inability to
      pay its debts generally as they become due, file a petition to take
      advantage of, or commence a voluntary case under, any applicable
      insolvency or reorganization statute, make an assignment for the benefit
      of its creditors, or voluntarily suspend payment of its obligations, or

            (6)   the Master Servicer shall fail to reimburse, in full, the
      Trustee not later than 6:00 p.m., New York City time, on the Business Day
      following the related Distribution Date for any Advance made by the
      Trustee together with accrued and unpaid interest.

      So long as an Event of Default under the Pooling and Servicing Agreement
remains unremedied, subject to the rights of the NIM Insurer, the Trustee shall,
but only upon the receipt of instructions from the NIM Insurer or from holders
of Certificates having not less than 25% of the Voting Rights terminate all of
the rights and obligations of the Master Servicer under the Pooling and
Servicing Agreement and in and to the Mortgage Loans, whereupon the Trustee will
succeed to all of the responsibilities and duties of the Master Servicer under
the Pooling and Servicing Agreement, including the obligation to make Advances.
Additionally, if the Master Servicer fails to provide certain information or
perform certain duties related to the Depositor's reporting obligations under
the Exchange Act, with respect to the issuing entity, the Depositor, may,
without the consent of any of the certificateholders, terminate the Master
Servicer. We cannot assure you that termination of the rights and obligations of
the Master Servicer under the Pooling and Servicing Agreement would not
adversely affect the servicing of the Mortgage Loans, including the delinquency
experience of the Mortgage Loans.

      No certificateholder, solely by virtue of the holder's status as a
certificateholder, will have any right under the Pooling and Servicing Agreement
to institute any proceeding with respect thereto, unless the holder previously
has given to the Trustee written notice of the continuation of an Event of
Default and unless the holders of Certificates having not less than 25% of the
Voting Rights have made a written request to the Trustee to institute the
proceeding in its own name as Trustee thereunder and have offered to the Trustee
reasonable indemnity and the


                                      S-96



Trustee for 60 days has neglected or refused to institute the proceeding and in
which case the rights of the certificateholders shall be subject to the rights
of the NIM Insurer.

      Within 60 days after the occurrence of any Event of Default, the Trustee
shall transmit by mail to all holders of the Certificates notice of each Event
of Default known to the Trustee, except for any Event of Default that has been
cured or waived.

OPTIONAL TERMINATION

      The Master Servicer will have the right to purchase all remaining Mortgage
Loans and REO Properties in the issuing entity and thereby effect early
retirement of all the Certificates, on any Distribution Date on or after the
first Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans and REO Properties in the issuing entity is less than or equal to
10% of the sum of the Initial Cut-off Date Pool Principal Balance and the
original Pre-Funded Amount (the "OPTIONAL TERMINATION DATE"). The Master
Servicer is an affiliate of the Sellers and the Depositor.

      In the event the option is exercised by the Master Servicer, the purchase
will be made at a price equal to the sum of:

            (1)   100% of the Stated Principal Balance of each Mortgage Loan in
      the issuing entity (other than in respect of REO Property) plus accrued
      interest thereon at the applicable Net Mortgage Rate, and

            (2)   the appraised value of any REO Property (up to the Stated
      Principal Balance of the related Mortgage Loan) in the issuing entity;

provided, however, that unless the NIM Insurer otherwise consents, the purchase
price will in no event be less than an amount that would result in a final
distribution on any NIM Insurer guaranteed notes that is sufficient (x) to pay
the notes in full and (y) to pay any amounts due and payable to the NIM Insurer
pursuant to the indenture related to the notes.

      The NIM Insurer may also have the right to purchase all remaining Mortgage
Loans and REO Properties in the issuing entity at the price set forth above
(plus any unreimbursed Servicing Advances, and the principal portion of any
unreimbursed Advances, made on the Mortgage Loans prior to the exercise of the
option), subject to the same restrictions. The identity of any NIM Insurer is
not known as of the date of this prospectus supplement. It is possible that the
NIM Insurer will be an affiliate of one of the Underwriters.

      Notice of any termination, specifying the Distribution Date on which
certificateholders may surrender their Certificates for payment of the final
distribution and cancellation, will be given promptly by the Trustee by letter
to certificateholders mailed not earlier than the 10th day and no later than the
15th day of the month immediately preceding the month of the final distribution.
The notice will specify (a) the Distribution Date upon which final distribution
on related Certificates will be made upon presentation and surrender of the
Certificates at the office therein designated, (b) the amount of the final
distribution, (c) the location of the office or agency at which the presentation
and surrender must be made, and (d) that the Record Date otherwise applicable to
the Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office therein specified.

      In the event a notice of termination is given, the Master Servicer will
cause all funds in the Certificate Account to be remitted to the Trustee for
deposit in the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
Certificates. At or prior to the time of making the final payment on the
Certificates, the Master Servicer as agent of the Trustee will sell all of the
assets of the issuing entity to the Master Servicer or the NIM Insurer, as
applicable, for cash. Proceeds from a purchase will be distributed to the
certificateholders in the priority described above under "-- Distributions" and
"-- Overcollateralization Provisions" and will reflect the current Certificate
Principal Balance and other entitlements of each class at the time of
liquidation. As a result, if any Applied Realized Loss Amounts have been


                                      S-97



allocated to any class or classes of Certificates, any Unpaid Realized Loss
Amounts would be paid in the order and priority set forth above under "--
Overcollateralization Provisions."

      The proceeds from any sale in connection the exercise of the option may
not be sufficient to distribute the full amount to which each class of
Certificates is entitled if the purchase price is based in part on the appraised
value of any REO Property and that appraised value is less than the Stated
Principal Balance of the related Mortgage Loan. Any purchase of the Mortgage
Loans and REO Properties will result in an early retirement of the Certificates.
At the time of the making of the final payment on the Certificates, the Trustee
shall distribute or credit, or cause to be distributed or credited, to the
holder of the Class A-R Certificates all cash on hand related to the Class A-R
Certificates, and the issuing entity will terminate at that time. Once the
issuing entity has been terminated, certificateholders will not be entitled to
receive any amounts that are recovered subsequent to the termination.

CERTAIN MATTERS REGARDING THE MASTER SERVICER, THE DEPOSITOR, THE SELLERS AND
THE NIM INSURER

      The prospectus describes the indemnification to which the Master Servicer
and the Depositor (and their respective directors, officers, employees and
agents) are entitled and also describes the limitations on any liability of the
Master Servicer and the Depositor (and their respective directors, officers,
employees and agents) to the issuing entity. See "The Agreements -- Certain
Matters Regarding the Master Servicer and the Depositor" in the prospectus. The
Pooling and Servicing Agreement provides that these same provisions regarding
indemnification and exculpation apply to each Seller and any NIM Insurer.

THE TRUSTEE

      The Bank of New York will be the Trustee under the Pooling and Servicing
Agreement. The Bank of New York has been, and currently is, serving as indenture
trustee and trustee for numerous securitization transactions and programs
involving pools of residential mortgages. The Bank of New York is one of the
largest corporate trust providers of trust services on securitization
transactions. The Depositor and Countrywide Home Loans may maintain other
banking relationships in the ordinary course of business with the Trustee. The
Offered Certificates may be surrendered at the Corporate Trust Office of the
Trustee located at 101 Barclay Street, New York, New York 10286, Attention:
Corporate Trust MBS Administration or another addresses as the Trustee may
designate from time to time.

      The Trustee will be liable for its own grossly negligent action, its own
gross negligent failure to act or its own misconduct, its grossly negligent
failure to perform its obligations in compliance with the Pooling and Servicing
Agreement, or any liability that would be imposed by reason of its willful
misfeasance or bad faith. However, the Trustee will not be liable, individually
or as trustee,

  o   for an error of judgment made in good faith by a responsible officer of
      the Trustee, unless the Trustee was grossly negligent or acted in bad
      faith or with willful misfeasance,

  o   with respect to any action taken, suffered or omitted to be taken by it in
      good faith in accordance with the direction of the holders of each Class
      of Certificates evidencing not less than 25% of the Voting Rights of the
      Class relating to the time, method and place of conducting any proceeding
      for any remedy available to the Trustee, or exercising any trust or power
      conferred upon the Trustee under the Pooling and Servicing Agreement,

  o   for any action taken or suffered or omitted by it under the Pooling and
      Servicing Agreement in good faith and in accordance with an opinion of
      counsel, or

  o   for any loss on any investment of funds pursuant to the Pooling and
      Servicing Agreement (other than as issuer of the investment security).

      The Trustee is also entitled to rely without further investigation upon
any resolution, officer's certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order,


                                      S-98



appraisal, bond or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties.

      The Trustee and any successor trustee will, at all times, be a corporation
or association organized and doing business under the laws of a state or the
United States of America, authorized under the laws of the United States of
America to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority and with a credit rating that would not cause any of
the Rating Agencies to reduce their respective ratings of any Class of
Certificates below the ratings issued on the Closing Date (or having provided
security from time to time as is sufficient to avoid the reduction). If the
Trustee no longer meets the foregoing requirements, the Trustee has agreed to
resign immediately.

      The Trustee may at any time resign by giving written notice of resignation
to the Depositor, the Master Servicer, each Rating Agency and the
certificateholders, not less than 60 days before the specified resignation date.
The resignation shall not be effective until a successor trustee has been
appointed. If a successor trustee has not been appointed within 30 days after
the Trustee gives notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.

      The Depositor, the NIM Insurer or the Master Servicer may remove the
Trustee and appoint a successor trustee reasonably acceptable to the NIM Insurer
if:

  o   the Trustee ceases to meet the eligibility requirements described above
      and fails to resign after written request to do so is delivered to the
      Trustee by the NIM Insurer or the Depositor,

  o   the Trustee becomes incapable of acting, or is adjudged as bankrupt or
      insolvent, or a receiver of the Trustee or of its property is appointed,
      or any public officer takes charge or control of the Trustee or of its
      property or affairs for the purpose of rehabilitation, conservation or
      liquidation, or

  o   (iii)(A) a tax is imposed with respect to the issuing entity by any state
      in which the Trustee or the issuing entity is located, (B) the imposition
      of the tax would be avoided by the appointment of a different trustee and
      (C) the Trustee fails to indemnify the issuing entity against the tax.

      In addition, the holders of Certificates evidencing at least 51% of the
Voting Rights of each Class of Certificates may at any time remove the Trustee
and appoint a successor trustee. In addition, if the Trustee fails to provide
certain information or perform certain duties related to the Depositor's
reporting obligations under the Exchange Act with respect to the issuing entity,
the Depositor, may, without the consent of any of the certificateholders,
terminate the Trustee. Notice of any removal of the Trustee shall be given to
each Rating Agency by the successor Trustee.

      Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions described above will become effective
upon acceptance of appointment by the successor trustee.

      A successor trustee will not be appointed unless the successor trustee
meets the eligibility requirements described above, is reasonably acceptable to
the NIM Insurer and its appointment does not adversely affect the then-current
ratings of the Certificates.

RESTRICTIONS ON TRANSFER OF THE CLASS A-R CERTIFICATES

      The Class A-R Certificates will be subject to the restrictions on transfer
described in the prospectus under "Material Federal Income Tax Consequences --
Taxation of Holders of Residual Interest Securities -- Restrictions on Ownership
and Transfer of Residual Interest Securities." The Class A-R Certificates (in
addition to other ERISA restricted classes of Certificates, as described in the
Pooling and Servicing Agreement), may not be acquired by a Plan or with assets
of a Plan unless certain conditions are met. See "ERISA Considerations" in this
prospectus supplement. Each Class A-R Certificate will contain a legend
describing the foregoing restrictions.


                                      S-99



OWNERSHIP OF THE RESIDUAL CERTIFICATES

      On the Closing Date, the Class CF, Class CV and Class A-R Certificates
(except as described below) will be acquired by CW Securities Holdings, Inc., an
affiliate of the Depositor, the Sellers and the Master Servicer. After the
Closing Date, CW Securities Holdings, Inc. is expected to cause a separate trust
to be established to issue net interest margin securities secured by all or a
portion of the Class CF and Class CV Certificates. Those net interest margin
securities are expected to be sold to Sunfish Mortgage Fund Ltd., which is an
affiliate of the Depositor, the Sellers, the Master Servicer and the Special
Servicer. See " -- Rights of the NIM Insurer Under the Pooling and Servicing
Agreement" in this prospectus supplement.

      The Trustee will be initially designated as "tax matters person" under the
Pooling and Servicing Agreement and in that capacity will hold a Class A-R
Certificate in the amount of $0.05. As tax matters person, the Trustee will be
responsible for various tax administrative matters relating to the issuing
entity, including the making of a REMIC election with respect to each REMIC
created under the Pooling and Servicing Agreement and the preparation and filing
of tax returns with respect to each such REMIC.

RESTRICTIONS ON INVESTMENT, SUITABILITY REQUIREMENTS

      An investment in the Certificates may not be appropriate for all investors
due to tax, ERISA or other legal requirements. Investors should review the
disclosure included in this prospectus supplement and the prospectus under
"Material Federal Income Tax Consequences," "ERISA Considerations" and "Legal
Matters" prior to any acquisition and are encouraged to consult with their
advisors prior to purchasing the Certificates.

RIGHTS OF THE NIM INSURER UNDER THE POOLING AND SERVICING AGREEMENT

      After the Closing Date, a separate trust or trusts (or other form of
entity) may be established to issue net interest margin securities secured by
all or a portion of the Class PF, Class PV, Class CF and Class CV Certificates.
Those net interest margin securities may or may not have the benefit of a
financial guaranty insurance policy. The insurer or insurers (the "NIM INSURER")
that would issue a policy will be a third party beneficiary of the Pooling and
Servicing Agreement and will have a number of rights under the Pooling and
Servicing Agreement, which will include the following:

  o   The right to consent to the Master Servicer's exercise of its discretion
      to waive assumption fees, late payment or other charges in connection with
      a Mortgage Loan or to arrange for the extension of due dates for payments
      due on a mortgage note for no more than 270 days, if the waivers or
      extensions relate to more than 5% of the Mortgage Loans;

  o   the right to direct the Trustee to terminate all of the rights and
      obligations of the Master Servicer under the Pooling and Servicing
      Agreement relating to the issuing entity and the assets of the issuing
      entity following the occurrence of an event of default under the Pooling
      and Servicing Agreement;

  o   the right to approve or reject the appointment of any successor servicer
      other than the Trustee, if the Master Servicer is required to be replaced
      and the Trustee is unwilling or unable to act as successor servicer;

  o   the right to consent to any amendment to the Pooling and Servicing
      Agreement; and

  o   each of the rights under "Risk Factors--Rights of the NIM Insurer" in this
      prospectus supplement.

      You should note the rights that the NIM Insurer would have and carefully
evaluate its potential impact on your investment.


                                     S-100



                  YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS

GENERAL

      The weighted average life of, and the yield to maturity on, each class of
interest-bearing certificates generally will be directly related to the rate of
payment of principal (including prepayments) of the Mortgage Loans in the
related Loan Group. The actual rate of principal prepayments on the mortgage
loans is influenced by a variety of economic, tax, geographic, demographic,
social, legal and other factors and has fluctuated considerably in recent years.
In addition, the rate of principal prepayments may differ among pools of
mortgage loans at any time because of specific factors relating to the mortgage
loans in the particular pool, including, among other things, the age of the
mortgage loans, the geographic locations of the properties securing the loans,
the extent of the borrower's equity in the properties, and changes in the
borrowers' housing needs, job transfers and employment status. Furthermore, as
described under "The Mortgage Pool -- Assignment of the Mortgage Loans" with
respect to up to 50% of the Initial Mortgage Loans in each Loan Group and 90% of
the Subsequent Mortgage Loans in each Loan Group (the "DELAY DELIVERY MORTGAGE
LOANS"), the Depositor may deliver the related Mortgage Files after the Closing
Date. Should a Seller fail to deliver to the Depositor or other designee of the
Depositor all or a portion of the Mortgage Files relating to Mortgage Loans sold
by it, or, at the Depositor's direction, to the Trustee within the time periods
described under "The Mortgage Pool -- Assignment of the Mortgage Loans"
Countrywide Home Loans will be required to use its best efforts to deliver a
Substitute Mortgage Loan for the related Delay Delivery Mortgage Loan or
repurchase the related Delay Delivery Mortgage Loan. Any repurchases pursuant to
this provision would also have the effect of accelerating the rate of
prepayments on the Mortgage Loans. In addition, no less than approximately
88.54% and 78.97% of the Mortgage Loans in the Statistical Calculation Pool in
respect of Loan Group 1 and Loan Group 2, respectively, in each case by stated
principal balance of the Mortgage Loans in the Statistical Calculation Pool in
respect of the related Loan Group, require the payment of a prepayment charge in
connection with certain prepayments, generally no later than the first five
years following origination of the related Mortgage Loan. These charges, if
enforced by the Master Servicer, may affect the rate of prepayments on the
Mortgage Loans.

      In addition, no less than approximately 13.83% and 37.97% of the Mortgage
Loans in the Statistical Calculation Pool in respect of Loan Group 1 and Loan
Group 2, respectively, in each case by stated principal balance of the Mortgage
Loans in the Statistical Calculation Pool in respect of the related Loan Group
provide for only payments of interest and do not provide for any payments of
principal for an extended period following their origination. These Mortgage
Loans may involve a greater degree of risk because, if the related borrower
defaults, the outstanding principal balance of the Mortgage Loans will be higher
than for amortizing Mortgage Loans. During their interest only periods, these
Mortgage Loans may be less likely to prepay as the interest only feature may
reduce the perceived benefits of refinancing due to the smaller monthly payment.
However, as an interest only mortgage loan approaches the end of its interest
only period, it may be more likely to be prepaid, even if market interest rates
at the time are only slightly higher or lower than the interest rate on the
interest only mortgage loans as the related borrowers seek to avoid increases in
their respective monthly mortgage payment.

      The timing of changes in the rate of prepayments may significantly affect
the actual yield to investors who purchase the Certificates at prices other than
par, even if the average rate of principal prepayments is consistent with the
expectations of investors. In general, the earlier the payment of principal of
the Mortgage Loans the greater the effect on an investor's yield to maturity. As
a result, the effect on an investor's yield of principal prepayments occurring
at a rate higher (or lower) than the rate anticipated by the investor during the
period immediately following the issuance of the Certificates may not be offset
by a subsequent like reduction (or increase) in the rate of principal
prepayments. Investors must make their own decisions as to the appropriate
prepayment assumptions to be used in deciding whether to purchase any of the
Certificates. The Depositor does not make any representations or warranties as
to the rate of prepayment or the factors to be considered in connection with
these determinations.

      The Class AF-6 Certificates will not be entitled to distributions of
principal until the Distribution Date in February 2009 (except as otherwise
described in this prospectus supplement). Thereafter, the relative entitlement
of the Class AF-6 Certificates to payments in respect of principal is subject to
increase in accordance with the calculation of the NAS Principal Distribution
Amount. See "Description of the Certificates -- Distributions" in this
prospectus supplement.


                                     S-101



PREPAYMENTS AND YIELDS FOR THE OFFERED CERTIFICATES

      The extent to which the yield to maturity of the Certificates may vary
from the anticipated yield will depend upon the degree to which it is purchased
at a discount or premium and, correspondingly, the degree to which the timing of
payments thereon is sensitive to prepayments, liquidations and purchases of the
Mortgage Loans in the related Loan Group. In particular, in the case of an
Certificate purchased at a discount, an investor should consider the risk that a
slower than anticipated rate of principal payments, liquidations and purchases
of the applicable Mortgage Loans could result in an actual yield to the investor
that is lower than the anticipated yield and, in the case of an Offered
Certificate purchased at a premium, the risk that a faster than anticipated rate
of principal payments, liquidations and purchases of the Mortgage Loans could
result in an actual yield to the investor that is lower than the anticipated
yield.

      In general with respect to fixed rate mortgage loans, if prevailing
interest rates fall significantly below the interest rates on fixed rate
mortgage loans, these mortgage loans are likely to be subject to higher
prepayment rates than if prevailing rates remain at or above the interest rates
on these mortgage loans. Conversely, if prevailing interest rates rise
appreciably above the interest rates on fixed rate mortgage loans, the fixed
rate mortgage loans are likely to experience a lower prepayment rate than if
prevailing rates remain at or below the interest rates on these mortgage loans.
In the event that Fixed Rate Mortgage Loans in Loan Group 1 with higher Mortgage
Rates prepay at rates higher than other Mortgage Loans in Loan Group 1, the
applicable Net Rate Cap may be lower than otherwise would be the case. As a
result, the interest payable on the related Certificates on a Distribution Date
could be reduced because of the imposition of the applicable Net Rate Cap. We
cannot give any assurance as to the level of prepayment that the Fixed Rate
Mortgage Loans in Loan Group 1 will experience.

      As is the case with fixed rate mortgage loans, adjustable rate mortgage
loans may be subject to a greater rate of principal prepayments in a declining
interest rate environment. For example, if prevailing interest rates fall
significantly, adjustable rate mortgage loans could be subject to higher
prepayment rates than if prevailing interest rates remain constant because the
availability of fixed rate mortgage loans at lower interest rates may encourage
borrowers to refinance their adjustable rate mortgage loans to a lower fixed
interest rate. Prepayments on the Hybrid Mortgage Loans may differ as they
approach their respective initial Adjustment Dates, and prepayments on Mortgage
Loans with interest-only terms may differ as they approach the ends of their
interest-only periods. In the event that Adjustable Rate Mortgage Loans in Loan
Group 2 with higher Gross Margins prepay at rates higher than other Mortgage
Loans in Loan Group 2, the applicable Net Rate Cap may be lower than otherwise
would be the case. We can give no assurance as to the level of prepayment that
the Adjustable Rate Mortgage Loans will experience.

      Although the Mortgage Rates on the Adjustable Rate Mortgage Loans are
subject to adjustment, the Mortgage Rates adjust less frequently than the
Pass-Through Rates on the Class AV Certificates and the Adjustable Rate
Subordinate Certificates and adjust by reference to the Mortgage Index. Changes
in One-Month LIBOR may not correlate with changes in the Mortgage Index and also
may not correlate with prevailing interest rates. It is possible that an
increased level of One-Month LIBOR could occur simultaneously with a lower level
of prevailing interest rates which would be expected to result in faster
prepayments, thereby reducing the weighted average lives of the related
Certificates. The Mortgage Rate applicable to all or substantially all of the
Adjustable Rate Mortgage Loans and any Adjustment Date will be based on the
Mortgage Index value most recently announced generally as of a date 45 days
prior to the Adjustment Date. Thus, if the Mortgage Index value with respect to
an Adjustable Rate Mortgage Loan rises, the lag in time before the corresponding
Mortgage Rate increases will, all other things being equal, slow the upward
adjustment of the applicable Net Rate Cap. In addition, it is expected that a
substantial portion of the Adjustable Rate Mortgage Loans will have Mortgage
Rates which will not adjust for a substantial period of time after origination.
See "The Mortgage Pool" in this prospectus supplement.

      The portion of any proceeds of the Corridor Contract that will be payable
to the issuing entity under the Corridor Contract Administration Agreement are
intended to provide the Class AF-1 Certificates with some protection against any
Net Rate Carryover. However, the portion of the payments that will be allocated
to the issuing entity in respect of the Corridor Contract will be based on the
lesser of the Corridor Contract Notional Balance and the Certificate Principal
Balance of the Class AF-1 Certificates, and not on the actual Stated Principal
Balances of the Mortgage Loans. Therefore, the Corridor Contract may not provide
sufficient funds to cover any Net Rate Carryover. In addition, payments under
the Corridor Contract are limited to a corridor of specified rates,


                                     S-102



which is substantially higher than the rate of One-Month LIBOR as of the date of
this prospectus supplement and are only available to the Class AF-1 Certificates
to the extent described under "Description of the Certificates -- The Corridor
Contract" above.

      Although amounts allocated to the issuing entity in respect of the
Corridor Contract will be available to pay Net Rate Carryover on the Class AF-1
Certificates to the extent described under "Description of the Certificates --
Distributions -- Distributions of Funds from the Corridor Contract" above, on or
prior to the Corridor Contract Termination Date, we cannot assure you that funds
will be available or sufficient to pay these amounts. The ratings assigned to
the Offered Certificates do not address the likelihood of the payment of Net
Rate Carryover.

      The portion of any proceeds of the Swap Contract that will be payable to
the swap trust under the Swap Contract Administration Agreement are intended to
provide amounts to the Swap Certificates to cover any unpaid Current Interest,
Interest Carry Forward Amounts, Net Rate Carryover and Unpaid Realized Loss
Amounts and to restore or maintain overcollateralization. However, any Net Swap
Payment payable by the Swap Contract Counterparty will be based on the lesser of
the applicable Swap Contract Notional Balance and the aggregate Certificate
Principal Balance of the Swap Certificates, and not on the actual Stated
Principal Balances of the Mortgage Loans in Loan Group 2. Therefore, the Swap
Contract may not provide sufficient funds to cover any unpaid Current Interest,
Interest Carry Forward Amounts, Net Rate Carryover and Unpaid Realized Loss
Amounts with respect to the Swap Certificates and to restore or maintain
overcollateralization for those Certificates. See "Description of the
Certificates -- The Swap Contract" above.

      Although amounts allocated to the Trust Fund in respect of the Swap
Contract will be available to cover any unpaid Current Interest, Interest Carry
Forward Amounts, Net Rate Carryover and Unpaid Realized Loss Amounts with
respect to the Swap Certificates and to restore or maintain
overcollateralization for those Certificates to the extent described under
"Description of the Certificates -- The Swap Contract" above, on or prior to the
Swap Contract Termination Date, there is no assurance that funds will be
available or sufficient to pay such amounts.

      In addition, for so long as one-month LIBOR is less than 4.72% (or, in
cases where the accrual period for the floating rate payment payable by the swap
counterparty is not 30 days, 4.72% multiplied by a fraction, the numerator of
which is 30 and the denominator of which is the actual number of days in that
accrual period), the Trust will be required to cover Net Swap Payments due to
the Swap Counterparty, thereby reducing the amount of available funds with
respect to Loan Group 2 that are available to make distributions on the Swap
Certificates. In addition, any Swap Termination Payment payable to the Swap
Counterparty (other than a Swap Termination Payment resulting from a Swap
Counterparty Trigger Event) in the event of early termination of the Swap
Contract will reduce amounts available for distribution to holders of the Swap
Certificates. As of February 7, 2006, One-Month LIBOR is 4.57%.

      The effective yield to the holders of the Fixed Rate Certificates will be
lower than the yield otherwise produced by the applicable rate at which interest
is passed through to these holders and the purchase price of the Certificates
because monthly distributions will not be payable to the holders until the 25th
day (or, if the 25th day is not a Business Day, the following Business Day) of
the month following the month in which interest accrues on the related Mortgage
Loans (without any additional distribution of interest or earnings thereon in
respect of the delay).

LAST SCHEDULED DISTRIBUTION DATE

      Assuming that, among other things,

  o   no prepayments are received on the Mortgage Loans and

  o   scheduled monthly payments of principal of and interest on each of the
      Mortgage Loans are timely received,

the Distribution Date (the "LAST SCHEDULED DISTRIBUTION DATE") that occurs six
months following the Distribution Date (or, in the case of the Class A-R
Certificates, zero months) on which the Certificate Principal Balance of the
applicable class of Certificates would be reduced to zero is:


                                     S-103



           CLASS OF CERTIFICATES                 DISTRIBUTION DATE
           ---------------------                -------------------
              Class AF-1                           November 2025
              Class AF-2                              May 2027
              Class AF-3                             July 2033
              Class AF-4                           September 2034
              Class AF-5                             July 2036
              Class AF-6                              May 2036
              Class MF-1                              May 2036
              Class MF-2                              May 2036
              Class MF-3                             April 2036
              Class MF-4                             April 2036
              Class MF-5                             March 2036
              Class MF-6                           February 2036
              Class AV-1                             July 2028
              Class AV-2                              May 2035
              Class AV-3                             June 2036
              Class MV-1                              May 2036
              Class MV-2                              May 2036
              Class MV-3                              May 2036
              Class MV-4                             April 2036
              Class MV-5                             April 2036
              Class MV-6                             March 2036
              Class MV-7                             March 2036
              Class A-R                            February 2006

      The actual final Distribution Date with respect to each class of these
Certificates could occur significantly earlier than its Last Scheduled
Distribution Date because:

  o   prepayments are likely to occur which will be applied to the payment of
      the Certificate Principal Balances thereof, and

  o   the Master Servicer may purchase all the Mortgage Loans in the issuing
      entity when the aggregate Stated Principal Balance of the Mortgage Loans
      and REO Properties in the issuing entity is less than or equal to 10% of
      the sum of the Initial Cut-off Date Pool Principal Balance and the
      original Pre-Funded Amount.

PREPAYMENT MODEL

      Prepayments on mortgage loans are commonly measured relative to a
prepayment model or standard. The prepayment models used in this prospectus
supplement ("PREPAYMENT MODELS") are based on an assumed rate of prepayment each
month of the then unpaid principal balance of a pool of mortgage loans similar
to the Mortgage Loans in each Loan Group. For the Fixed Rate Mortgage Loans, the
Prepayment Model used in this prospectus supplement (the "FIXED RATE PREPAYMENT
VECTOR" or "FRPV") is a prepayment assumption which represents an assumed rate
of prepayment each month relative to the then outstanding principal balance of a
pool of mortgage loans for the life of the mortgage loans. For example, a 100%
FRPV assumes a constant prepayment rate ("CPR") of 2.2% per annum of the then
outstanding principal balance of the Fixed Rate Mortgage Loans in the first
month of the life of the Mortgage Loans and an additional 2.2% per annum (i.e.,
1/10 of the final per annum rate) in each month thereafter up to and including
the tenth month. Beginning in the eleventh month and in each month thereafter
during the life of the Fixed Rate Mortgage Loans, a 100% FRPV assumes a CPR of
22% per annum.

      For the Adjustable Rate Mortgage Loans, the Prepayment Model used in this
prospectus supplement ("ADJUSTABLE RATE PREPAYMENT VECTOR" or "ARPV") represents
an assumed rate of prepayment each month relative to the then outstanding
principal balance of a pool of mortgage loans for the life of the mortgage
loans. 100% ARPV assumes 6% CPR in month 1, an additional 1/11th of 22% CPR for
each month thereafter, increasing to 28% CPR in month 12 and remaining constant
at 28% CPR until month 33, increasing to and remaining constant at 50%


                                      S-104



CPR from month 34 until month 37 decreasing 1/4th of 20% CPR for each month
thereafter, decreasing to 30% CPR in month 42 and remaining constant at 30% CPR
from month 43 and thereafter; provided, however, the prepayment rate will not
exceed 85% CPR in any period for any given percentage of ARPV. As used in the
tables, 100% of the applicable Prepayment Model means 100% FRPV or 100% ARPV, as
the case may be.

      We cannot assure you, however, that prepayments on the Mortgage Loans will
conform to any level of the Prepayment Model, and no representation is made that
the Mortgage Loans will prepay at the prepayment rates shown or any other
prepayment rate. The rate of principal payments on mortgage loans is influenced
by a variety of economic, geographic, social and other factors, including the
level of interest rates. Other factors affecting prepayment of mortgage loans
include changes in obligors' housing needs, job transfers and unemployment. In
the case of mortgage loans in general, if prevailing interest rates fall
significantly below the interest rates on the mortgage loans, the mortgage loans
are likely to be subject to higher prepayment rates than if prevailing interest
rates remain at or above the rates borne by the mortgage loans. Conversely, if
prevailing interest rates rise above the interest on the mortgage loans, the
rate of prepayment would be expected to decrease.

DECREMENT TABLES; WEIGHTED AVERAGE LIVES

      The tables below set forth the percentages of the initial Certificate
Principal Balance of each class of Offered Certificates that will be outstanding
as of the twelfth Distribution Date and every twelfth Distribution Date
thereafter at the respective percentages of the Prepayment Model. Those
percentages have been rounded to the nearest whole percentages, and an asterisk
(*) indicates a percentage less than 0.5% and greater than 0%. In addition, the
tables below set forth the weighted average lives of each class of Offered
Certificates to maturity and to optional termination at the respective
percentages of the Prepayment Model. Each weighted average life of any class of
Certificates presented below is determined by (a) multiplying the amount of each
principal payment by the number of years from the date of issuance to the
related Distribution Date, (b) adding the results, and (c) dividing the sum by
the initial respective Certificate Principal Balance for that class of
Certificates.

      The following tables have been prepared on the basis of the following
assumptions (collectively, the "MODELING ASSUMPTIONS"):

            (1)   the Mortgage Loans prepay at the indicated percentage of the
      related Prepayment Model,

            (2)   distributions on the Certificates are received, in cash, on
      the 25th day of each month, commencing in February 2006, in accordance
      with the payment priorities defined in this prospectus supplement,

            (3)   no defaults or delinquencies in, or modifications, waivers or
      amendments respecting, the payment by the borrowers of principal and
      interest on the Mortgage Loans occur,

            (4)   Scheduled Payments are assumed to be received on the first day
      of each month commencing in February 2006, and prepayments represent
      payment in full of individual Mortgage Loans and are assumed to be
      received on the last day of each month, commencing in January 2006, and
      include 30 days' interest thereon,

            (5)   the level of the Mortgage Index remains constant at 4.719% per
      annum, and the level of One-Month LIBOR remains constant at 4.483% per
      annum,

            (6)   the Pass-Through Margins or fixed rates for the Certificates
      remain constant at the rates applicable on or prior to the Optional
      Termination Date and the Pass-Through Margins or fixed rates for those
      Certificates are adjusted accordingly on any Distribution Date after the
      Optional Termination Date,

            (7)   the Certificates are issued on February 10, 2006,

            (8)   the Mortgage Rate for each Adjustable Rate Mortgage Loan is
      adjusted on its next Adjustment Date (and on subsequent Adjustment Dates,
      if necessary) to equal the sum of


                                      S-105



                  (a)   the assumed level of the Mortgage Index, and

                  (b)   the respective Gross Margin (which sum is subject
            to the applicable periodic adjustment caps and floors and the
            applicable lifetime adjustment caps and floors),

            (9)   except as indicated with respect to the weighted average lives
      to maturity, the optional termination is exercised on the Optional
      Termination Date,

            (10)  the scheduled monthly payment for each Mortgage Loan, except
      for the interest-only Mortgage Loans during their respective interest-only
      periods, is calculated based on its principal balance, mortgage rate and
      remaining amortization term so that each Mortgage Loan will amortize in
      amounts sufficient to repay the remaining principal balance of the
      Mortgage Loan over the remaining term to maturity (except in the case of
      balloon loans), as indicated in the table below,

            (11)  any Mortgage Loan with a remaining interest-only term greater
      than zero does not amortize during the remaining interest-only term, and
      at the end of the remaining interest-only term, will amortize in amounts
      sufficient to repay the current balance of any Mortgage Loan over the
      remaining term to maturity calculated at the expiration of the remaining
      interest-only term based on the applicable amortization method,

            (12)  scheduled monthly payments on each Adjustable Rate Mortgage
      Loan will be adjusted in the month immediately following each related
      interest adjustment date (as necessary) for the Mortgage Loan to equal the
      fully amortizing payment described above,

            (13)  the scheduled amortization for all Mortgage Loans is based
      upon their respective gross interest rates,

            (14)  all of the Pre-Funded Amount, if any, is used to purchase
      Subsequent Mortgage Loans for inclusion on the Closing Date, and

            (15)  each Loan Group consists of Mortgage Loans having the
      approximate characteristics described below:


                                      S-106





                                                    LOAN GROUP 1 MORTGAGE LOANS

                                                    REMAINING      REMAINING    ORIGINAL
                      ADJUSTED                     AMORTIZATION     TERM TO     INTEREST-                   CREDIT
   PRINCIPAL        NET MORTGAGE     MORTGAGE          TERM         MATURITY    ONLY TERM       AGE        COMEBACK     AMORTIZATION
  BALANCE($)          RATE (%)       RATE (%)        (MONTHS)       (MONTHS)     (MONTHS)     (MONTHS)      FEATURE        METHOD
---------------     ------------     ---------     ------------    ---------    ---------     --------     --------     ------------

      74,962.04       8.991000        9.500000         359           179           N/A            1            No         Balloon
     142,039.46       9.332938        9.841938         347           167           N/A           13            No         Balloon
   2,013,897.68       7.529148        8.038148         180           180           N/A            0            No          Level
     155,877.21       6.691000        7.200000         177           177           N/A            4            No          Level
   1,139,351.10       5.910343        6.419343         178           178           N/A            3            No          Level
      85,481.48       7.616000        8.125000         180           180           N/A            0            No          Level
     433,772.10       7.387474        7.896474         180           180           N/A            0            No          Level
      47,337.47       7.366000        7.875000         180           180           N/A            1            No          Level
     200,834.08       7.411435        7.920435         178           178           N/A            3            No          Level
   2,054,986.64       6.531032        7.040032         180           180           N/A            1            No          Level
     123,316.09       7.741000        8.250000         180           180           N/A            0            No          Level
      70,100.12       6.866000        7.375000         180           180           N/A            0            No          Level
     270,511.08       6.056185        6.565185         179           179           N/A            1            No          Level
   4,962,735.30       6.734612        7.243612         180           180           N/A            1            No          Level
     193,725.61       8.640795        9.149795         240           240           N/A            1            No          Level
  44,830,032.67       7.461079        7.970079         360           360           N/A            1            No          Level
      97,680.49       7.741000        8.250000         360           360           N/A            1            No          Level
     315,568.64       5.737860        6.246860         358           358           N/A            2            No          Level
     793,156.74       7.030182        7.539182         360           360           N/A            0            No          Level
   1,522,883.80       7.024986        7.533986         358           358           N/A            3            No          Level
  46,082,064.62       6.557900        7.066900         358           358           N/A            2            No          Level
     322,142.30       9.591420       10.100420         360           360           N/A            0            No          Level
     925,209.05       7.891515        8.400515         360           360           N/A            0            No          Level
     590,019.02       6.687477        7.196477         360           360           N/A            0            No          Level
   1,959,444.12       6.911063        7.420063         360           360           N/A            0            No          Level
     177,365.14       8.094909        8.603909         360           360           N/A            1            No          Level
      78,260.17       9.991000       10.500000         342           342           N/A            5            No          Level
   7,874,001.52       6.882764        7.391764         359           359           N/A            1            No          Level
   5,510,618.96       7.403980        7.912980         360           360           N/A            1            No          Level
   5,072,954.04       7.221723        7.730723         360           360           N/A            1            No          Level
     150,277.68       7.191000        7.700000         360           360           N/A            1            No          Level
     484,910.71       7.996783        8.505783         360           360           N/A            1            No          Level
     495,385.94       7.534005        8.043005         360           360           N/A            1            No          Level
     383,915.27       6.403653        6.912653         360           360           N/A            1            No          Level
     180,255.32       8.335335        8.844335         359           359           N/A            1            No          Level
     265,195.90       5.991000        6.500000         360           360           N/A            1            No          Level
   1,130,169.26       6.670695        7.179695         360           360           N/A            1            No          Level
   2,857,757.20       7.153577        7.662577         359           359           N/A            2            No          Level
     144,973.76       8.255634        8.764634         360           360           N/A            1            No          Level
  52,469,014.92       6.708606        7.217606         360           360           N/A            1            No          Level
   1,268,438.66       7.809167        8.318167         360           360           N/A            0            No          Level
  17,744,990.37       6.719195        7.228195         360           360           N/A            0            No          Level
     132,597.95       6.166000        6.675000         360           360           N/A            1            No          Level
     768,537.72       7.682447        8.191447         360           360           N/A            0            No          Level
     119,339.04       7.967875        8.476875         360           360           N/A            1            No          Level
     416,622.76       7.174413        7.683413         360           360           N/A            0            No          Level
 173,388,179.10       6.420150        6.929150         360           360           N/A            0            No          Level
     338,672.85       6.291000        6.800000         360           360           N/A            0            No          Level
   3,723,038.27       6.629613        7.138613         300           359            60            1            No          Level
   5,706,033.36       6.389837        6.898837         300           359            60            1            No          Level
     112,443.06       9.941000       10.450000         300           360            60            0            No          Level
     549,839.50       6.985373        7.494373         300           359            60            1            No          Level
   1,851,509.39       6.205162        6.714162         300           360            60            0            No          Level
     483,894.12       7.150778        7.659778         300           360            60            0            No          Level
     438,899.22       6.913684        7.422684         300           358            60            2            No          Level
     182,322.18       6.991000        7.500000         300           359            60            1            No          Level
   8,828,732.68       6.529586        7.038586         300           359            60            1            No          Level
      72,398.48       7.366000        7.875000         300           360            60            0            No          Level
   1,075,853.81       6.306070        6.815070         300           360            60            0            No          Level
     110,498.29       7.491000        8.000000         300           360            60            0            No          Level
     218,786.62       6.514485        7.023485         300           360            60            0            No          Level
  37,216,900.67       6.142945        6.651945         300           360            60            0            No          Level
     569,287.20       6.741000        7.250000         300           360            60            0            No          Level



                                      S-107





                                                     LOAN GROUP 2 MORTGAGE LOANS

                                                                         ORIGINAL
                   ADJUSTED                   REMAINING     REMAINING    INTEREST-
                     NET                    AMORTIZATION     TERM TO       ONLY                     INITIAL       SUBSEQUENT
   PRINCIPAL       MORTGAGE     MORTGAGE        TERM        MATURITY       TERM         AGE         PERIODIC       PERIODIC
  BALANCE ($)      RATE (%)     RATE (%)      (MONTHS)      (MONTHS)     (MONTHS)     (MONTHS)    RATE CAP (%)    RATE CAP (%)
---------------    --------    ---------    ------------    ---------    ---------    --------    ------------    ------------

     175,419.16    5.241000     5.750000         360           360          N/A           0         1.000000        1.000000
     209,429.00    6.491000     7.000000         360           360          N/A           0         1.000000        1.000000
     531,851.21    8.711551     9.220551         360           360          N/A           0         1.000000        1.000000
     357,282.29    6.095709     6.604709         360           360          N/A           0         1.000000        1.000000
     869,577.85    6.395140     6.904140         360           360          N/A           0         1.000000        1.000000
     215,693.97    6.741000     7.250000         360           360          N/A           0         1.000000        1.000000
   5,747,560.42    8.063850     8.572850         359           359          N/A           1         1.601152        1.437275
     238,434.02    5.991000     6.500000         360           360          N/A           0         1.500000        1.500000
     268,351.75    8.481000     8.990000         359           359          N/A           1         3.000000        1.000000
   2,379,840.18    8.104545     8.613545         360           360          N/A           0         1.609185        1.463605
     313,248.50    6.991000     7.500000         359           359          N/A           1         3.000000        1.500000
   1,448,304.06    8.439949     8.948949         359           359          N/A           1         1.626471        1.440231
      86,725.09    8.241000     8.750000         360           360          N/A           0         1.500000        1.500000
   3,048,263.19    7.266039     7.775039         359           359          N/A           1         1.703030        1.432323
     170,049.19    8.991000     9.500000         359           359          N/A           1         3.000000        1.000000
   1,208,714.10    7.904455     8.413455         360           360          N/A           0         1.500000        1.500000
     139,619.33    7.271000     7.780000         360           360          N/A           0         1.500000        1.500000
   1,414,056.08    7.617733     8.126733         359           359          N/A           1         2.663488        1.112171
  64,821,761.50    7.073120     7.582120         359           359          N/A           1         1.775618        1.424642
     165,574.21    8.366000     8.875000         360           360          N/A           0         1.500000        1.500000
     429,027.83    7.453302     7.962302         355           355          N/A           5         2.282076        1.239308
     201,213.00    6.616000     7.125000         358           358          N/A           2         3.000000        1.000000
      76,269.05    6.491000     7.000000         355           355          N/A           5         3.000000        1.000000
     134,006.54    6.991000     7.500000         357           357          N/A           3         1.500000        1.500000
   1,726,347.41    7.757631     8.266631         359           359          N/A           1         2.900850        1.130750
     119,213.43    8.441000     8.950000         360           360          N/A           0         3.000000        1.000000
   2,062,314.49    7.438483     7.947483         336           360           24           0         1.432408        1.432408
     219,542.45    6.741000     7.250000         300           360           60           0         3.000000        1.000000
     118,139.44    7.916000     8.425000         300           359           60           1         3.000000        1.000000
   2,494,728.99    7.226496     7.735496         336           360           24           0         1.500000        1.500000
     525,439.46    7.102653     7.611653         300           359           60           1         2.639746        1.000000
     283,713.65    6.991000     7.500000         336           360           24           0         1.500000        1.500000
     259,996.26    7.741000     8.250000         300           360           60           0         2.000000        1.000000
     718,430.97    6.643183     7.152183         336           360           24           0         1.500000        1.500000
     163,515.72    6.179424     6.688424         300           359           60           1         1.790640        1.209360
     146,779.30    7.366000     7.875000         336           360           24           0         1.500000        1.500000
     198,474.25    5.371000     5.880000         336           360           24           0         3.000000        1.000000
     548,408.63    6.959380     7.468380         300           359           60           1         2.608323        1.130559
  42,393,932.34    6.547420     7.056420         336           359           24           1         1.616943        1.462708
   9,640,628.14    6.285917     6.794917         300           358           60           2         2.453498        1.115367
     621,477.87    7.103908     7.612908         336           360           24           0         2.018439        1.327187
   1,477,279.94    6.167859     6.676859         300           359           60           1         3.000000        1.440628
  52,014,423.36    7.558232     8.067232         359           359          N/A           1         1.582964        1.468724


                                MAXIMUM       MINIMUM      MONTHS TO       RESET
   PRINCIPAL         GROSS     MORTGAGE       MORTGAGE     NEXT RATE     FREQUENCY
  BALANCE ($)     MARGIN (%)   RATE (%)       RATE (%)     ADJUSTMENT    (MONTHS)
---------------   ----------   ---------     ----------    ----------    ---------

     175,419.16    8.250000    12.750000       5.750000          6            6
     209,429.00    6.375000    14.000000       7.000000          6            6
     531,851.21    7.911653    16.220551       9.220551          6            6
     357,282.29    5.166834    13.604709       6.604709          6            6
     869,577.85    6.333689    13.904140       6.904140          6            6
     215,693.97    6.500000    14.250000       7.250000          6            6
   5,747,560.42    7.712870    15.529356       8.567724         23            6
     238,434.02    6.375000    13.500000       6.500000         24            6
     268,351.75    7.990000    15.990000       8.990000         23            6
   2,379,840.18    7.420678    15.540755       8.522557         24            6
     313,248.50    7.250000    14.500000       7.500000         23            6
   1,448,304.06    8.055730    15.882247       8.846986         23            6
      86,725.09    8.750000    15.750000       8.750000         24            6
   3,048,263.19    6.892216    14.688351       7.775039         23            6
     170,049.19    8.500000    15.500000       9.500000         23            6
   1,208,714.10    6.163075    15.413455       8.413455         24            6
     139,619.33    6.780000    14.780000       7.780000         24            6
   1,414,056.08    7.360125    14.695513       8.126733         23            6
  64,821,761.50    6.824449    14.429251       7.568212         23            6
     165,574.21    7.250000    15.875000       8.875000         24            6
     429,027.83    7.668720    14.440918       7.668720         19            6
     201,213.00    6.125000    13.125000       7.125000         22            6
      76,269.05    7.000000    13.000000       7.000000         19            6
     134,006.54    7.500000    14.500000       7.500000         21            6
   1,726,347.41    7.519281    14.627282       8.079803         23            6
     119,213.43    7.950000    14.950000       8.950000         24            6
   2,062,314.49    6.647425    14.947483       7.947483         24            6
     219,542.45    7.250000    13.250000       7.250000         24            6
     118,139.44    8.425000    14.425000       8.425000         23            6
   2,494,728.99    6.658171    14.735496       7.735496         24            6
     525,439.46    7.104487    13.971907       7.611653         23            6
     283,713.65    6.980000    14.500000       7.500000         24            6
     259,996.26    7.250000    14.250000       8.250000         24            6
     718,430.97    6.539266    14.152183       7.152183         24            6
     163,515.72    5.979064    13.688424       6.688424         23            6
     146,779.30    7.500000    14.875000       7.875000         24            6
     198,474.25    5.880000    11.880000       5.880000         24            6
     548,408.63    6.468380    13.729498       7.468380         23            6
  42,393,932.34    6.377396    13.978457       7.040422         23            6
   9,640,628.14    6.455043    13.298893       6.758433         22            6
     621,477.87    7.402088    14.267282       7.612908         24            6
   1,477,279.94    6.339119    13.558115       6.676859         23            6
  52,014,423.36    6.836251    15.019732       8.068669         35            6



                                      S-108





                                                                         ORIGINAL
                   ADJUSTED                   REMAINING     REMAINING    INTEREST-
                     NET                    AMORTIZATION     TERM TO       ONLY                     INITIAL       SUBSEQUENT
   PRINCIPAL       MORTGAGE     MORTGAGE        TERM        MATURITY       TERM         AGE         PERIODIC       PERIODIC
  BALANCE ($)      RATE (%)     RATE (%)      (MONTHS)      (MONTHS)     (MONTHS)     (MONTHS)    RATE CAP (%)    RATE CAP (%)
---------------    --------    ---------    ------------    ---------    ---------    --------    ------------    ------------

      95,227.55    6.991000     7.500000         360           360          N/A           0         1.500000        1.500000
     166,469.20    8.491000     9.000000         360           360          N/A           0         1.500000        1.500000
     195,556.57    7.441000     7.950000         360           360          N/A           0         3.000000        1.000000
      49,162.66   10.991000    11.500000         356           356          N/A           4         1.500000        1.500000
   5,405,559.57    7.220047     7.729047         358           358          N/A           2         1.689188        1.436937
     161,099.23    7.691000     8.200000         360           360          N/A           0         3.000000        1.000000
     168,903.59    7.366000     7.875000         360           360          N/A           0         1.500000        1.500000
   1,075,186.83    7.429856     7.938856         360           360          N/A           0         1.500000        1.500000
   5,372,832.46    7.265056     7.774056         359           359          N/A           1         1.671731        1.455045
     215,693.97    6.481000     6.990000         359           359          N/A           1         3.000000        1.500000
   2,805,272.42    7.638783     8.147783         359           359          N/A           1         1.876883        1.374372
   7,731,417.68    7.025697     7.534697         359           359          N/A           1         1.922205        1.365360
     347,884.84    7.116000     7.625000         359           359          N/A           1         1.500000        1.500000
      93,527.05    9.141000     9.650000         360           360          N/A           0         1.500000        1.500000
     196,065.26    5.241000     5.750000         355           355          N/A           5         3.000000        1.000000
     176,851.16    6.866000     7.375000         360           360          N/A           0         1.500000        1.500000
     346,184.35    8.078319     8.587319         360           360          N/A           0         2.215486        1.261505
   1,322,080.09    7.674741     8.183741         359           359          N/A           1         3.000000        1.000000
  57,238,949.90    6.974843     7.483843         359           359          N/A           1         1.698757        1.455376
     179,088.64    7.116000     7.625000         360           360          N/A           0         1.500000        1.500000
  14,151,499.15    6.810444     7.319444         324           359           36           1         1.596423        1.464083
     838,074.00    7.242207     7.751207         300           359           60           1         1.949808        1.500000
     488,667.67    6.845579     7.354579         324           360           36           0         2.164835        1.278388
     165,842.71    8.741000     9.250000         300           360           60           0         3.000000        1.000000
   2,267,008.06    6.930095     7.439095         324           358           36           2         1.843646        1.385451
     285,682.64    6.241000     6.750000         300           359           60           1         3.000000        1.000000
     112,590.46    8.866000     9.375000         324           359           36           1         1.500000        1.500000
     199,763.05    6.491000     7.000000         324           354           36           6         1.500000        1.500000
   2,378,533.48    6.456083     6.965083         324           360           36           0         1.500000        1.500000
     161,027.63    6.491000     7.000000         300           360           60           0         3.000000        1.000000
     147,942.79    8.231000     8.740000         300           359           60           1         3.000000        1.500000
     306,039.49    6.441761     6.950761         324           358           36           2         1.500000        1.500000
     178,551.65    6.871000     7.380000         300           359           60           1         2.000000        1.000000
   3,689,662.66    6.479335     6.988335         324           360           36           0         1.717911        1.427363
     307,162.53    7.616000     8.125000         300           360           60           0         3.000000        1.000000
     167,364.20    6.091000     6.600000         324           359           36           1         1.500000        1.500000
     255,073.78    7.366000     7.875000         324           360           36           0         1.500000        1.500000
     197,346.56    7.641000     8.150000         300           359           60           1         3.000000        1.000000
  42,955,083.83    6.445223     6.954223         324           360           36           0         1.541976        1.486008
   4,801,968.00    6.728878     7.237878         300           359           60           1         2.601959        1.146168
     219,045.02    5.241000     5.750000         358           358          N/A           2         3.000000        1.500000


                                MAXIMUM       MINIMUM      MONTHS TO       RESET
   PRINCIPAL         GROSS     MORTGAGE       MORTGAGE     NEXT RATE     FREQUENCY
  BALANCE ($)     MARGIN (%)   RATE (%)       RATE (%)     ADJUSTMENT    (MONTHS)
---------------   ----------   ---------     ----------    ----------    ---------

      95,227.55    6.875000    14.500000       7.500000         36            6
     166,469.20    6.000000    16.000000       9.000000         36            6
     195,556.57    5.400000    13.950000       7.950000         36            6
      49,162.66    7.875000    18.500000      11.500000         32            6
   5,405,559.57    6.613627    14.602922       7.729047         34            6
     161,099.23    8.200000    14.200000       8.200000         36            6
     168,903.59    7.875000    14.875000       7.875000         36            6
   1,075,186.83    6.886404    14.938856       7.938856         36            6
   5,372,832.46    6.388362    14.684145       7.774056         35            6
     215,693.97    6.990000    13.990000       6.990000         35            6
   2,805,272.42    7.241180    14.896527       8.147783         35            6
   7,731,417.68    6.431345    14.265417       7.465357         35            6
     347,884.84    6.625000    14.625000       6.625000         35            6
      93,527.05    8.650000    16.650000       9.650000         36            6
     196,065.26    5.750000    11.750000       5.750000         31            6
     176,851.16    5.500000    14.375000       7.375000         36            6
     346,184.35    7.055067    15.110328       8.587319         36            6
   1,322,080.09    7.629259    14.629259       8.183741         35            6
  57,238,949.90    6.520210    14.394595       7.474946         35            6
     179,088.64    6.375000    14.625000       7.625000         36            6
  14,151,499.15    6.691723    14.260258       7.319444         35            6
     838,074.00    7.157572    14.751207       7.751207         35            6
     488,667.67    6.519414    13.911355       7.354579         36            6
     165,842.71    8.250000    15.250000       9.250000         36            6
   2,267,008.06    6.654176    14.209998       7.439095         34            6
     285,682.64    5.750000    12.750000       5.750000         35            6
     112,590.46    9.375000    16.375000       9.375000         35            6
     199,763.05    7.000000    14.000000       7.000000         30            6
   2,378,533.48    5.834944    13.965083       6.965083         36            6
     161,027.63    7.000000    13.000000       7.000000         36            6
     147,942.79    8.740000    15.740000       8.740000         35            6
     306,039.49    5.747298    13.950761       6.950761         34            6
     178,551.65    6.880000    14.380000       7.380000         35            6
   3,689,662.66    6.076766    13.843061       6.988335         36            6
     307,162.53    7.125000    14.125000       8.125000         36            6
     167,364.20    5.600000    13.600000       6.600000         35            6
     255,073.78    7.500000    14.875000       7.875000         36            6
     197,346.56    7.650000    14.150000       8.150000         35            6
  42,955,083.83    6.093434    13.926239       6.946641         36            6
   4,801,968.00    6.793047    13.651176       7.171452         35            6
     219,045.02    5.500000    12.750000       5.750000         58            6



                                      S-109





                   PERCENTAGES OF THE INITIAL CERTIFICATE PRINCIPAL BALANCES OF THE OFFERED CERTIFICATES
                                   AT THE RESPECTIVE PERCENTAGES OF THE PREPAYMENT MODEL

                                              CLASS AF-1                                        CLASS AF-2
                             ---------------------------------------------     ---------------------------------------------
DISTRIBUTION DATE             50%       75%       100%      125%      150%      50%       75%       100%      125%      150%
-----------------            -----     -----     -----     -----     -----     -----     -----     -----     -----     -----

Initial Percentage ........    100%      100%      100%      100%      100%      100%      100%      100%      100%      100%
January 25, 2007 ..........     72        61        50        38        27       100       100       100       100       100
January 25, 2008 ..........     39        15         0         0         0       100       100        50         0         0
January 25, 2009 ..........     10         0         0         0         0       100         0         0         0         0
January 25, 2010 ..........      0         0         0         0         0        16         0         0         0         0
January 25, 2011 ..........      0         0         0         0         0         0         0         0         0         0

Weighted Average Life to
Optional Termination
(in years) ................   1.71      1.24      1.00      0.85      0.75      3.77      2.58      2.00      1.64      1.40
Weighted Average Life to
Maturity (in years) .......   1.71      1.24      1.00      0.85      0.75      3.77      2.58      2.00      1.64      1.40




                                              CLASS AF-3                                        CLASS AF-4
                             ---------------------------------------------     ---------------------------------------------
DISTRIBUTION DATE             50%       75%       100%      125%      150%      50%       75%       100%      125%      150%
-----------------            -----     -----     -----     -----     -----     -----     -----     -----     -----     -----

Initial Percentage ........    100%      100%      100%      100%      100%      100%      100%      100%      100%      100%
January 25, 2007 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2008 ..........    100       100       100        77        43       100       100       100       100       100
January 25, 2009 ..........    100        88        40         0         0       100       100       100        90         0
January 25, 2010 ..........    100        44        10         0         0       100       100       100        20         0
January 25, 2011 ..........     71        20         0         0         0       100       100        46         0         0
January 25, 2012 ..........     46         4         0         0         0       100       100         0         0         0
January 25, 2013 ..........     32         0         0         0         0       100        63         0         0         0
January 25, 2014 ..........     26         0         0         0         0       100        51         0         0         0
January 25, 2015 ..........     19         0         0         0         0       100        26         0         0         0
January 25, 2016 ..........     11         0         0         0         0       100         0         0         0         0
January 25, 2017 ..........      2         0         0         0         0       100         0         0         0         0
January 25, 2018 ..........      0         0         0         0         0        76         0         0         0         0
January 25, 2019 ..........      0         0         0         0         0        45         0         0         0         0
January 25, 2020 ..........      0         0         0         0         0        16         0         0         0         0
January 25, 2021 ..........      0         0         0         0         0         0         0         0         0         0

Weighted Average Life to
Optional Termination
(in years) ................   6.57      4.08      3.00      2.32      1.95     12.86      7.96      5.00      3.69      2.62
Weighted Average Life to
Maturity (in years) .......   6.57      4.08      3.00      2.32      1.95     12.86      7.96      5.00      3.69      2.62



                                      S-110





                                              CLASS AF-5                                        CLASS AF-6
                             ---------------------------------------------     ---------------------------------------------
DISTRIBUTION DATE             50%       75%       100%      125%      150%      50%       75%       100%      125%      150%
-----------------            -----     -----     -----     -----     -----     -----     -----     -----     -----     -----

Initial Percentage ........    100%      100%      100%      100%      100%      100%      100%      100%      100%      100%
January 25, 2007 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2008 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2009 ..........    100       100       100       100        62       100       100       100       100       100
January 25, 2010 ..........    100       100       100       100        52        92        88        89        91        96
January 25, 2011 ..........    100       100       100        64        15        85        81        79        79        80
January 25, 2012 ..........    100       100        93        41         0        73        69        64        60         0
January 25, 2013 ..........    100       100        71         0         0        64        57        49         0         0
January 25, 2014 ..........    100       100         0         0         0        42        31         0         0         0
January 25, 2015 ..........    100       100         0         0         0        28        17         0         0         0
January 25, 2016 ..........    100        99         0         0         0        18         9         0         0         0
January 25, 2017 ..........    100         0         0         0         0        12         0         0         0         0
January 25, 2018 ..........    100         0         0         0         0         8         0         0         0         0
January 25, 2019 ..........    100         0         0         0         0         5         0         0         0         0
January 25, 2020 ..........    100         0         0         0         0         3         0         0         0         0
January 25, 2021 ..........     94         0         0         0         0         2         0         0         0         0
January 25, 2022 ..........      0         0         0         0         0         0         0         0         0         0

Weighted Average Life to
Optional Termination
(in years) ................  15.33     10.59      7.49      5.45      3.89      7.79      6.98      6.40      5.63      4.91
Weighted Average Life to
Maturity (in years) .......  19.76     14.59     10.51      7.18      4.19      7.83      7.07      6.69      6.58      6.72




                                              CLASS MF-1                                        CLASS MF-2
                             ---------------------------------------------     ---------------------------------------------
DISTRIBUTION DATE             50%       75%       100%      125%      150%      50%       75%       100%      125%      150%
-----------------            -----     -----     -----     -----     -----     -----     -----     -----     -----     -----

Initial Percentage ........    100%      100%      100%      100%      100%      100%      100%      100%      100%      100%
January 25, 2007 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2008 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2009 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2010 ..........    100        99        77        59        45       100        99        77        59        45
January 25, 2011 ..........    100        82        60        43        30       100        82        60        43        30
January 25, 2012 ..........     96        67        46        30         0        96        67        46        30         0
January 25, 2013 ..........     84        55        35         0         0        84        55        35         0         0
January 25, 2014 ..........     73        45         0         0         0        73        45         0         0         0
January 25, 2015 ..........     64        37         0         0         0        64        37         0         0         0
January 25, 2016 ..........     56        30         0         0         0        56        30         0         0         0
January 25, 2017 ..........     48         0         0         0         0        48         0         0         0         0
January 25, 2018 ..........     42         0         0         0         0        42         0         0         0         0
January 25, 2019 ..........     36         0         0         0         0        36         0         0         0         0
January 25, 2020 ..........     31         0         0         0         0        31         0         0         0         0
January 25, 2021 ..........     26         0         0         0         0        26         0         0         0         0
January 25, 2022 ..........      0         0         0         0         0         0         0         0         0         0

Weighted Average Life to
Optional Termination
(in years) ................  11.04      7.67      5.79      4.70      4.21     11.04      7.67      5.79      4.68      4.13
Weighted Average Life to
Maturity (in years) .......  12.24      8.75      6.66      5.44      4.84     12.21      8.73      6.64      5.40      4.73



                                      S-111





                                              CLASS MF-3                                        CLASS MF-4
                             ---------------------------------------------     ---------------------------------------------
DISTRIBUTION DATE             50%       75%       100%      125%      150%      50%       75%       100%      125%      150%
-----------------            -----     -----     -----     -----     -----     -----     -----     -----     -----     -----

Initial Percentage ........    100%      100%      100%      100%      100%      100%      100%      100%      100%      100%
January 25, 2007 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2008 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2009 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2010 ..........    100        99        77        59        45       100        99        77        59        45
January 25, 2011 ..........    100        82        60        43        30       100        82        60        43        30
January 25, 2012 ..........     96        67        46        30         0        96        67        46        30         0
January 25, 2013 ..........     84        55        35         0         0        84        55        35         0         0
January 25, 2014 ..........     73        45         0         0         0        73        45         0         0         0
January 25, 2015 ..........     64        37         0         0         0        64        37         0         0         0
January 25, 2016 ..........     56        30         0         0         0        56        30         0         0         0
January 25, 2017 ..........     48         0         0         0         0        48         0         0         0         0
January 25, 2018 ..........     42         0         0         0         0        42         0         0         0         0
January 25, 2019 ..........     36         0         0         0         0        36         0         0         0         0
January 25, 2020 ..........     31         0         0         0         0        31         0         0         0         0
January 25, 2021 ..........     26         0         0         0         0        26         0         0         0         0
January 25, 2022 ..........      0         0         0         0         0         0         0         0         0         0

Weighted Average Life to
Optional Termination
(in years) ................  11.04      7.67      5.79      4.67      4.08     11.04      7.67      5.79      4.66      4.05
Weighted Average Life to
Maturity (in years) .......  12.19      8.70      6.62      5.37      4.67     12.17      8.67      6.60      5.34      4.62




                                              CLASS MF-5                                        CLASS MF-6
                             ---------------------------------------------     ---------------------------------------------
DISTRIBUTION DATE             50%       75%       100%      125%      150%      50%       75%       100%      125%      150%
-----------------            -----     -----     -----     -----     -----     -----     -----     -----     -----     -----

Initial Percentage ........    100%      100%      100%      100%      100%      100%      100%      100%      100%      100%
January 25, 2007 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2008 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2009 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2010 ..........    100        99        77        59        45       100        99        77        59        45
January 25, 2011 ..........    100        82        60        43        30       100        82        60        43        30
January 25, 2012 ..........     96        67        46        30         0        96        67        46        30         0
January 25, 2013 ..........     84        55        35         0         0        84        55        35         0         0
January 25, 2014 ..........     73        45         0         0         0        73        45         0         0         0
January 25, 2015 ..........     64        37         0         0         0        64        37         0         0         0
January 25, 2016 ..........     56        30         0         0         0        56        30         0         0         0
January 25, 2017 ..........     48         0         0         0         0        48         0         0         0         0
January 25, 2018 ..........     42         0         0         0         0        42         0         0         0         0
January 25, 2019 ..........     36         0         0         0         0        36         0         0         0         0
January 25, 2020 ..........     31         0         0         0         0        31         0         0         0         0
January 25, 2021 ..........     26         0         0         0         0        26         0         0         0         0
January 25, 2022 ..........      0         0         0         0         0         0         0         0         0         0

Weighted Average Life to
Optional Termination
(in years) ................  11.04      7.67      5.79      4.65      4.03     11.04      7.67      5.79      4.65      4.00
Weighted Average Life to
Maturity (in years) .......  12.13      8.64      6.57      5.31      4.58     12.09      8.59      6.53      5.28      4.54



                                      S-112





                                              CLASS MF-7                                        CLASS MF-8
                             ---------------------------------------------     ---------------------------------------------
DISTRIBUTION DATE             50%       75%       100%      125%      150%      50%       75%       100%      125%      150%
-----------------            -----     -----     -----     -----     -----     -----     -----     -----     -----     -----

Initial Percentage ........    100%      100%      100%      100%      100%      100%      100%      100%      100%      100%
January 25, 2007 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2008 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2009 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2010 ..........    100        99        77        59        45       100        99        77        59        45
January 25, 2011 ..........    100        82        60        43        30       100        82        60        43        30
January 25, 2012 ..........     96        67        46        30         0        96        67        46        30         0
January 25, 2013 ..........     84        55        35         0         0        84        55        35         0         0
January 25, 2014 ..........     73        45         0         0         0        73        45         0         0         0
January 25, 2015 ..........     64        37         0         0         0        64        37         0         0         0
January 25, 2016 ..........     56        30         0         0         0        56        30         0         0         0
January 25, 2017 ..........     48         0         0         0         0        48         0         0         0         0
January 25, 2018 ..........     42         0         0         0         0        42         0         0         0         0
January 25, 2019 ..........     36         0         0         0         0        36         0         0         0         0
January 25, 2020 ..........     31         0         0         0         0        31         0         0         0         0
January 25, 2021 ..........     26         0         0         0         0        26         0         0         0         0
January 25, 2022 ..........      0         0         0         0         0         0         0         0         0         0

Weighted Average Life to
Optional Termination
(in years) ................  11.04      7.67      5.79      4.65      3.99     11.04      7.67      5.79      4.64      3.97
Weighted Average Life to
Maturity (in years) .......  12.02      8.53      6.49      5.24      4.49     11.93      8.45      6.42      5.18      4.43




                                               CLASS BF                                         CLASS AV-1
                             ---------------------------------------------     ---------------------------------------------
DISTRIBUTION DATE             50%       75%       100%      125%      150%      50%       75%       100%      125%      150%
-----------------            -----     -----     -----     -----     -----     -----     -----     -----     -----     -----

Initial Percentage ........    100%      100%      100%      100%      100%      100%      100%      100%      100%      100%
January 25, 2007 ..........    100       100       100       100       100        75        63        50        38        26
January 25, 2008 ..........    100       100       100       100       100        41        16         0         0         0
January 25, 2009 ..........    100       100       100       100       100         5         0         0         0         0
January 25, 2010 ..........    100        99        77        59        45         0         0         0         0         0
January 25, 2011 ..........    100        82        60        43        30         0         0         0         0         0
January 25, 2012 ..........     96        67        46        30         0         0         0         0         0         0
January 25, 2013 ..........     84        55        35         0         0         0         0         0         0         0
January 25, 2014 ..........     73        45         0         0         0         0         0         0         0         0
January 25, 2015 ..........     64        37         0         0         0         0         0         0         0         0
January 25, 2016 ..........     56        30         0         0         0         0         0         0         0         0
January 25, 2017 ..........     48         0         0         0         0         0         0         0         0         0
January 25, 2018 ..........     42         0         0         0         0         0         0         0         0         0
January 25, 2019 ..........     36         0         0         0         0         0         0         0         0         0
January 25, 2020 ..........     31         0         0         0         0         0         0         0         0         0
January 25, 2021 ..........     26         0         0         0         0         0         0         0         0         0
January 25, 2022 ..........      0         0         0         0         0         0         0         0         0         0

Weighted Average Life to
Optional Termination
(in years) ................  11.04      7.67      5.79      4.64      3.97      1.73      1.26      1.00      0.84      0.73
Weighted Average Life to
Maturity (in years) .......  11.80      8.34      6.33      5.10      4.37      1.73      1.26      1.00      0.84      0.73



                                      S-113





                                              CLASS AV-2                                        CLASS AV-3
                             ---------------------------------------------     ---------------------------------------------
DISTRIBUTION DATE             50%       75%       100%      125%      150%      50%       75%       100%      125%      150%
-----------------            -----     -----     -----     -----     -----     -----     -----     -----     -----     -----

Initial Percentage ........    100%      100%      100%      100%      100%      100%      100%      100%      100%      100%
January 25, 2007 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2008 ..........    100       100        90        63        38       100       100       100       100       100
January 25, 2009 ..........    100        62        25         0         0       100       100       100        69         0
January 25, 2010 ..........     71        41        20         0         0       100       100       100        69         0
January 25, 2011 ..........     55        27         7         0         0       100       100       100        69         0
January 25, 2012 ..........     43        16         0         0         0       100       100        93        46         0
January 25, 2013 ..........     33         7         0         0         0       100       100        65         0         0
January 25, 2014 ..........     24         *         0         0         0       100       100         0         0         0
January 25, 2015 ..........     17         0         0         0         0       100        78         0         0         0
January 25, 2016 ..........     11         0         0         0         0       100        60         0         0         0
January 25, 2017 ..........      5         0         0         0         0       100         0         0         0         0
January 25, 2018 ..........      1         0         0         0         0       100         0         0         0         0
January 25, 2019 ..........      0         0         0         0         0        87         0         0         0         0
January 25, 2020 ..........      0         0         0         0         0        73         0         0         0         0
January 25, 2021 ..........      0         0         0         0         0        60         0         0         0         0
January 25, 2022 ..........      0         0         0         0         0         0         0         0         0         0

Weighted Average Life to
Optional Termination
(in years) ................   6.08      4.10      3.00      2.22      1.88     14.63      9.92      7.29      5.05      2.76
Weighted Average Life to
Maturity (in years) .......   6.08      4.10      3.00      2.22      1.88     17.00     11.52      8.36      5.80      2.76




                                              CLASS MV-1                                        CLASS MV-2
                             ---------------------------------------------     ---------------------------------------------
DISTRIBUTION DATE             50%       75%       100%      125%      150%      50%       75%       100%      125%      150%
-----------------            -----     -----     -----     -----     -----     -----     -----     -----     -----     -----

Initial Percentage ........    100%      100%      100%      100%      100%      100%      100%      100%      100%      100%
January 25, 2007 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2008 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2009 ..........    100       100       100       100        63       100       100       100       100       100
January 25, 2010 ..........    100        72        48       100        63       100        72        48        50        96
January 25, 2011 ..........     87        55        33        28        63        87        55        33        18        21
January 25, 2012 ..........     74        43        23        11         0        74        43        23        11         0
January 25, 2013 ..........     62        33        16         0         0        62        33        16         0         0
January 25, 2014 ..........     52        25         0         0         0        52        25         0         0         0
January 25, 2015 ..........     44        19         0         0         0        44        19         0         0         0
January 25, 2016 ..........     37        15         0         0         0        37        15         0         0         0
January 25, 2017 ..........     31         0         0         0         0        31         0         0         0         0
January 25, 2018 ..........     26         0         0         0         0        26         0         0         0         0
January 25, 2019 ..........     22         0         0         0         0        22         0         0         0         0
January 25, 2020 ..........     18         0         0         0         0        18         0         0         0         0
January 25, 2021 ..........     15         0         0         0         0        15         0         0         0         0
January 25, 2022 ..........      0         0         0         0         0         0         0         0         0         0

Weighted Average Life to
Optional Termination
(in years) ................   9.16      6.08      4.78      4.86      4.24      9.16      6.08      4.69      4.34      4.56
Weighted Average Life to
Maturity (in years) .......   9.71      6.44      5.01      5.02      5.21      9.68      6.42      4.90      4.49      4.66



                                      S-114





                                              CLASS MV-3                                        CLASS MV-4
                             ---------------------------------------------     ---------------------------------------------
DISTRIBUTION DATE             50%       75%       100%      125%      150%      50%       75%       100%      125%      150%
-----------------            -----     -----     -----     -----     -----     -----     -----     -----     -----     -----

Initial Percentage ........    100%      100%      100%      100%      100%      100%      100%      100%      100%      100%
January 25, 2007 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2008 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2009 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2010 ..........    100        72        48        30        17       100        72        48        30        17
January 25, 2011 ..........     87        55        33        18         9        87        55        33        18         9
January 25, 2012 ..........     74        43        23        11         0        74        43        23        11         0
January 25, 2013 ..........     62        33        16         0         0        62        33        16         0         0
January 25, 2014 ..........     52        25         0         0         0        52        25         0         0         0
January 25, 2015 ..........     44        19         0         0         0        44        19         0         0         0
January 25, 2016 ..........     37        15         0         0         0        37        15         0         0         0
January 25, 2017 ..........     31         0         0         0         0        31         0         0         0         0
January 25, 2018 ..........     26         0         0         0         0        26         0         0         0         0
January 25, 2019 ..........     22         0         0         0         0        22         0         0         0         0
January 25, 2020 ..........     18         0         0         0         0        18         0         0         0         0
January 25, 2021 ..........     15         0         0         0         0        15         0         0         0         0
January 25, 2022 ..........      0         0         0         0         0         0         0         0         0         0

Weighted Average Life to
Optional Termination
(in years) ................   9.16      6.08      4.64      4.11      3.93      9.16      6.08      4.63      4.00      3.68
Weighted Average Life to
Maturity (in years) .......   9.66      6.39      4.84      4.24      4.02      9.62      6.37      4.81      4.12      3.75




                                              CLASS MV-5                                        CLASS MV-6
                             ---------------------------------------------     ---------------------------------------------
DISTRIBUTION DATE             50%       75%       100%      125%      150%      50%       75%       100%      125%      150%
-----------------            -----     -----     -----     -----     -----     -----     -----     -----     -----     -----

Initial Percentage ........    100%      100%      100%      100%      100%      100%      100%      100%      100%      100%
January 25, 2007 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2008 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2009 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2010 ..........    100        72        48        30        17       100        72        48        30        17
January 25, 2011 ..........     87        55        33        18         9        87        55        33        18         9
January 25, 2012 ..........     74        43        23        11         0        74        43        23        11         0
January 25, 2013 ..........     62        33        16         0         0        62        33        16         0         0
January 25, 2014 ..........     52        25         0         0         0        52        25         0         0         0
January 25, 2015 ..........     44        19         0         0         0        44        19         0         0         0
January 25, 2016 ..........     37        15         0         0         0        37        15         0         0         0
January 25, 2017 ..........     31         0         0         0         0        31         0         0         0         0
January 25, 2018 ..........     26         0         0         0         0        26         0         0         0         0
January 25, 2019 ..........     22         0         0         0         0        22         0         0         0         0
January 25, 2020 ..........     18         0         0         0         0        18         0         0         0         0
January 25, 2021 ..........     15         0         0         0         0        15         0         0         0         0
January 25, 2022 ..........      0         0         0         0         0         0         0         0         0         0

Weighted Average Life to
Optional Termination
(in years) ................   9.16      6.08      4.61      3.93      3.53      9.16      6.08      4.61      3.89      3.46
Weighted Average Life to
Maturity (in years) .......   9.58      6.33      4.77      4.03      3.59      9.52      6.29      4.73      3.96      3.49



                                      S-115





                                              CLASS MV-7                                        CLASS MV-8
                             ---------------------------------------------     ---------------------------------------------
DISTRIBUTION DATE             50%       75%       100%      125%      150%      50%       75%       100%      125%      150%
-----------------            -----     -----     -----     -----     -----     -----     -----     -----     -----     -----

Initial Percentage ........    100%      100%      100%      100%      100%      100%      100%      100%      100%      100%
January 25, 2007 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2008 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2009 ..........    100       100       100       100       100       100       100       100       100       100
January 25, 2010 ..........    100        72        48        30        17       100        72        48        30        17
January 25, 2011 ..........     87        55        33        18         6        87        55        33        18         0
January 25, 2012 ..........     74        43        23        11         0        74        43        23         5         0
January 25, 2013 ..........     62        33        16         0         0        62        33        16         0         0
January 25, 2014 ..........     52        25         0         0         0        52        25         0         0         0
January 25, 2015 ..........     44        19         0         0         0        44        19         0         0         0
January 25, 2016 ..........     37        15         0         0         0        37        15         0         0         0
January 25, 2017 ..........     31         0         0         0         0        31         0         0         0         0
January 25, 2018 ..........     26         0         0         0         0        26         0         0         0         0
January 25, 2019 ..........     22         0         0         0         0        22         0         0         0         0
January 25, 2020 ..........     18         0         0         0         0        18         0         0         0         0
January 25, 2021 ..........     15         0         0         0         0        15         0         0         0         0
January 25, 2022 ..........      0         0         0         0         0         0         0         0         0         0

Weighted Average Life to
Optional Termination
(in years) ................   9.16      6.08      4.59      3.85      3.40      9.16      6.07      4.57      3.81      3.35
Weighted Average Life to
Maturity (in years) .......   9.42      6.22      4.66      3.89      3.41      9.27      6.10      4.57      3.81      3.35




                                               CLASS BV                                         CLASS A-R
                             ---------------------------------------------     ---------------------------------------------
DISTRIBUTION DATE             50%       75%       100%      125%      150%      50%       75%       100%      125%      150%
-----------------            -----     -----     -----     -----     -----     -----     -----     -----     -----     -----

Initial Percentage ........    100%      100%      100%      100%      100%      100%      100%      100%      100%      100%
January 25, 2007 ..........    100       100       100       100       100         0         0         0         0         0
January 25, 2008 ..........    100       100       100       100       100         0         0         0         0         0
January 25, 2009 ..........    100       100       100       100        42         0         0         0         0         0
January 25, 2010 ..........    100        72        48        30         9         0         0         0         0         0
January 25, 2011 ..........     87        55        33        15         0         0         0         0         0         0
January 25, 2012 ..........     74        43        23         0         0         0         0         0         0         0
January 25, 2013 ..........     62        33         6         0         0         0         0         0         0         0
January 25, 2014 ..........     52        25         0         0         0         0         0         0         0         0
January 25, 2015 ..........     44        17         0         0         0         0         0         0         0         0
January 25, 2016 ..........     37         2         0         0         0         0         0         0         0         0
January 25, 2017 ..........     31         0         0         0         0         0         0         0         0         0
January 25, 2018 ..........     26         0         0         0         0         0         0         0         0         0
January 25, 2019 ..........     22         0         0         0         0         0         0         0         0         0
January 25, 2020 ..........     13         0         0         0         0         0         0         0         0         0
January 25, 2021 ..........      3         0         0         0         0         0         0         0         0         0
January 25, 2022 ..........      0         0         0         0         0         0         0         0         0         0

Weighted Average Life to
Optional Termination
(in years) ................   9.01      5.92      4.44      3.68      3.22      0.04      0.04      0.04      0.04      0.04
Weighted Average Life to
Maturity (in years) .......   9.01      5.92      4.44      3.68      3.22      0.04      0.04      0.04      0.04      0.04



                                      S-116



                                LEGAL PROCEEDINGS

      There are no legal proceedings against Countrywide Home Loans, the
Depositor, the Trustee, the issuing entity or the Master Servicer, or to which
any of their respective properties are subject, that is material to the
certificateholders, nor is the Depositor aware of any proceedings of this type
contemplated by governmental authorities.

                    MATERIAL FEDERAL INCOME TAX CONSEQUENCES

      The following discussion and the discussion in the prospectus under the
caption "Material Federal Income Tax Consequences" is the opinion of Sidley
Austin LLP ("TAX COUNSEL") on the anticipated material federal income tax
consequences of the purchase, ownership, and disposition of the Offered
Certificates. It is based on the current provisions and interpretations of the
Code and the accompanying Treasury regulations and on current judicial and
administrative rulings. All of these authorities are subject to change and any
change can apply retroactively.

      For federal income tax purposes, the issuing entity (exclusive of the
Carryover Reserve Fund and the Pre-Funding Account and the issuing entity's
rights with respect to payments received under the Corridor Contract) will
consist of two or more REMICs in a tiered structure. The highest REMIC will be
referred to as the "MASTER REMIC," and each REMIC below the Master REMIC will be
referred to as an "UNDERLYING REMIC." Each underlying REMIC will issue multiple
classes of uncertificated, regular interests (the "UNDERLYING REMIC REGULAR
INTERESTS") that will be held by another REMIC above it in the tiered structure.
The assets of the lowest underlying REMICs will consist of the Mortgage Loans
and any other assets designated in the Pooling and Servicing Agreement. The
Master REMIC will issue the Senior Certificates and the Subordinate Certificates
(together, excluding the Class A-R Certificate, the "REGULAR CERTIFICATES"),
which will be designated as the regular interests in the Master REMIC. The Class
A-R Certificates (also, the "RESIDUAL CERTIFICATES") will represent the
beneficial ownership of the residual interest in each underlying REMIC and the
residual interest in the Master REMIC. The assets of the Master REMIC will
consist of the underlying REMIC Regular Interests. Aggregate distributions on
the underlying REMIC Regular Interests held by the Master REMIC will equal the
aggregate distributions on the Regular Certificates issued by the Master REMIC.
The swap trust, the Swap Contract and the Swap Account will not constitute any
part of any REMIC created under the Pooling and Servicing Agreement.

      All classes of the Regular Certificates will be treated as representing
interests in REMIC regular interests (the "REMIC REGULAR INTEREST COMPONENT"),
entitlement to receive payments of Net Rate Carryover and, in the case of the
Swap Certificates, the deemed obligation to make payments with respect to the
Swap Contract (the entitlement to payments of Net Rate Carryover and any
obligation to make payments with respect to the Swap Contract together, the "NET
RATE CARRYOVER COMPONENT"). Holders of the Regular Certificates ("REGULAR
CERTIFICATEHOLDERS") must allocate the purchase price for their Regular
Certificates between the REMIC Regular Interest Component and the Net Rate
Carryover Component.

      Depending on the class of a Regular Certificate, potential sources of Net
Rate Carryover payments may include one or more of the following: the Corridor
Contract, the Swap Contract, Fixed Rate Loan Group Excess Cashflow and
Adjustable Rate Loan Group Excess Cashflow. Similarly, depending on the class of
Regular Certificate, the potential sources for making payments with respect to
the Swap Contract may include interest and principal payments otherwise payable
on the Regular Certificate. For federal income tax purposes, the trustee intends
to treat the rights and the obligations of a Regular Certificateholder with
respect to Net Rate Carryover and the Swap Contract as embodied in a single
contract (that is, the Net Rate Carryover Component). The remainder of this
discussion assumes such treatment is correct.

      Upon the issuance of the Certificates, Tax Counsel will deliver its
opinion concluding, assuming compliance with the Pooling and Servicing
Agreement, for federal income tax purposes, that each REMIC created under the
Pooling and Servicing Agreement will qualify as a REMIC within the meaning of
Section 860D of the Code, and that the Regular Certificates will represent
regular interests in a REMIC. Moreover, Tax Counsel will deliver an opinion
concluding that the rights and obligations of the holders of the Regular
Certificates with respect to the Net Rate Carryover Component will represent,
for federal income tax purposes, contractual rights and obligations coupled with
regular interests within the meaning of Treasury regulations
Section.1.860G-2(i).


                                      S-117



TAXATION OF THE REMIC REGULAR INTEREST COMPONENTS OF THE REGULAR CERTIFICATES

      The REMIC Regular Interest Components of the Regular Certificates will be
treated as debt instruments issued by the Master REMIC for federal income tax
purposes. Income on the REMIC Regular Interest Components of the Regular
Certificates (including income otherwise payable on the REMIC Regular Interest
Component but used for making payments to the Swap Counterparty) must be
reported under an accrual method of accounting. Under an accrual method of
accounting, interest income may be required to be included in a holder's gross
income in advance of the holder's actual receipt of that interest income.

      The REMIC Regular Interest Component of some of the Regular Certificates
may be considered to have been issued with original issue discount ("OID"). For
purposes of determining the amount and rate of accrual of OID and market
discount, the trust fund intends to assume that there will be prepayments on the
Mortgage Loans at a rate equal to 100% of the Prepayment Model. No
representation is made regarding whether the Mortgage Loans will prepay at the
foregoing rate or at any other rate. Computing accruals of OID in the manner
described in the prospectus may (depending on the actual rate of prepayments
during the accrual period) result in the accrual of negative amounts of OID on
the certificates issued with OID in an accrual period. Holders will be entitled
to offset negative accruals of OID only against future OID accrual on their
certificates. See "Material Federal Income Tax Consequences -- Taxation of Debt
Securities" in the prospectus.

      If the holders of any Regular Certificates are treated as acquiring their
REMIC Regular Interest Components at a premium, the holders are encouraged to
consult their tax advisors regarding the election to amortize bond premium and
the method to be employed. See "Material Federal Income Tax Consequences --
Taxation of Debt Securities" in the prospectus.

TAXATION OF THE NET RATE CARRYOVER COMPONENTS OF THE REGULAR CERTIFICATES

In General

      The following discussions assume that the rights and obligations of the
holders of the Regular Certificates and Class CF and Class CV Certificates with
respect to the Net Rate Carryover Component will be treated as rights and
obligations under a notional principal contract rather than as interests in a
partnership for federal income tax purposes. If these rights and obligations
were treated as representing interests in an entity taxable as a partnership for
federal income tax purposes, then there could be different tax timing
consequences to all such certificateholders and different withholding tax
consequences on payments to certificateholders who are non-U.S. Persons.
Prospective investors in the Regular Certificates are encouraged to consult
their tax advisors regarding their appropriate tax treatment.

The Rights and Obligations of the Regular Certificates With Respect to the Net
Rate Carryover Component

      For tax information reporting purposes, the Trustee (1) will treat the Net
Rate Carryover Component of the Regular Certificateholders as rights and
obligations to receive and make payments under a notional principal contract and
(2) anticipates assuming that these rights and obligations together will have an
insubstantial value relative to the value of the REMIC Regular Interest
Components of the Regular Certificates. The IRS could, however, successfully
argue that the Net Rate Carryover Component of one or more classes of Regular
Certificates has a greater value. Similarly, the Trustee could determine that
the Net Rate Carryover Component of one or more classes of the Regular
Certificates has a greater value. In either case, the REMIC Regular Interest
Component of the Regular Certificates could be viewed as having been issued with
either an additional amount of OID (which could cause the total amount of
discount to exceed a statutorily defined de minimis amount) or with less premium
(which would reduce the amount of premium available to be used as an offset
against interest income). See "Material Federal Income Tax Consequences --
Taxation of Debt Securities" in the prospectus. In addition, the Net Rate
Carryover Component could be viewed as having been purchased at a higher cost.
These changes could affect the timing and amount of income and deductions on the
REMIC Regular Interest Component and Net Rate Carryover Component.

      The portion of the overall purchase price of a Regular Certificate
attributable to the Net Rate Carryover Component must be amortized over the life
of the Certificate, taking into account the declining balance of the


                                      S-118



related REMIC Regular Interest Component. Treasury regulations concerning
notional principal contracts provide alternative methods for amortizing the
purchase price of an interest rate cap contract. Under one method -- the level
yield constant interest method -- the price paid for an interest rate cap
agreement is amortized over the life of the cap as though it were the principal
amount of a loan bearing interest at a reasonable rate. Holders are encouraged
to consult their tax advisors concerning the methods that can be employed to
amortize the portion of the purchase price paid for the Net Rate Carryover
Component of such a Certificate.

      Subject to the discussion below under the caption "Alternative Treatment
of Termination-Related Payments," any payments received by a holder of a Regular
Certificate as Net Rate Carryover will be treated as periodic payments received
under a notional principal contract. For any taxable year, to the extent the sum
of (1) the periodic payments received exceeds the amortization of the purchase
price of the Net Rate Carryover Component, and (2) in the case of a Swap
Certificate, any amount payable on the REMIC Regular Interest Component used to
cover payments to the Swap Counterparty, such excess will be ordinary income.
Conversely, to the extent the sum of (1) the amortization of the purchase price,
and (2) in the case of a Swap Certificate, any amount payable on the REMIC
Regular Interest Component used to cover payments to the Swap Counterparty,
exceeds the periodic payments, such excess will be allowable as an ordinary
deduction. In the case of an individual, such deduction will be subject to the
2-percent floor imposed on miscellaneous itemized deductions under section 67 of
the Code and may be subject to the overall limitation on itemized deductions
imposed under section 68 of the Code. In addition, miscellaneous itemized
deductions are not allowed for purposes of computing the alternative minimum
tax. IN THE CASE OF INDIVIDUALS, THESE LIMITATIONS MEAN THAT INCOME PAYABLE ON
THE REMIC REGULAR INTEREST COMPONENT OF A SWAP CERTIFICATE WILL BE INCLUDIBLE IN
GROSS INCOME BUT THAT THE USE OF SUCH INCOME TO MAKE A PAYMENT TO THE SWAP
COUNTERPARTY MAY NOT BE DEDUCTIBLE.

Alternative Treatment of Termination-Related Payments

      Holders of the Swap Certificates have certain rights and obligations with
respect to payments that may be made or received if the Swap Contract terminates
("TERMINATION PAYMENTS"). Because the termination of the Swap Contract does not
necessarily mean the termination of the rights and obligations of the Swap
Certificateholders, however, the income tax treatment of the Termination
Payments is uncertain. For income tax reporting purposes, the trustee intends to
treat any Termination Payment as part of the periodic payments made or received
with respect to the Net Rate Carryover Component, and therefore, as part of
ordinary income or ordinary deductions with respect to the Net Rate Carryover
Component. The IRS, however, could assert that the Termination Payments should
be treated as capital gain or loss. The use of any capital loss may be limited.
Prospective investors in the Swap Certificates are encouraged to consult their
tax advisors regarding the appropriate tax treatment of any Termination
Payments.

DISPOSITIONS OF REGULAR CERTIFICATES

      Upon the sale, exchange, or other disposition of a Regular Certificate,
the Regular Certificateholder must allocate the amount realized between the
REMIC Regular Interest Component and the Net Rate Carryover Component based on
the relative fair market values of those components at the time of sale.
Assuming that the Regular Certificates are held as "capital assets" within the
meaning of Section 1221 of the Code, any gain or loss on the disposition of the
Net Rate Carryover Component should result in capital gain or loss and any gain
or loss on the disposition of the REMIC Regular Interest Component should result
in capital gain or loss. Gain with respect to the REMIC Regular Interest
Component, however, will be treated as ordinary income, to the extent it does
not exceed the excess (if any) of:

            (1)   the amount that would have been includible in the holder's
                  gross income with respect to the REMIC Regular Interest
                  Component had income thereon accrued at a rate equal to 110%
                  of the applicable federal rate as defined in section 1274(d)
                  of the Code determined as of the date of purchase of the
                  Certificate

                  over

            (2)   the amount actually included in the holder's income.


                                      S-119



TAX TREATMENT FOR CERTAIN PURPOSES

      As described more fully under "Material Federal Income Tax Consequences--
Taxation of the REMIC and Its Holders" in the prospectus, the REMIC Regular
Interest Components of the Regular Certificates will represent "real estate
assets" under Section 856(c)(5)(B) of the Code and qualifying assets under
Section 7701(a)(19)(C) of the Code in the same proportion or greater that the
assets of the issuing entity will be so treated, and income on the REMIC Regular
Interest Components of the Regular Certificates will represent "interest on
obligations secured by mortgages on real property or on interests in real
property" under Section 856(c) (3) (B) of the Code in the same proportion or
greater that the income on the assets of the issuing entity will be so treated.
The Net Rate Carryover Component of the Regular Certificates will not qualify as
assets described in Section 7701(a)(19)(C) of the Code or as real estate assets
under Section 856(c)(5)(B) of the Code. The REMIC Regular Interest Component of
the Regular Certificates (but not the Net Rate Carryover Component) will
represent qualifying assets under Section 860G(a)(3) of the Code if acquired by
a REMIC within the presecribed time periods of the Code. Because of the Net Rate
Carryover Components, however, holders of the Regular Certificates are
encouraged to consult with their tax advisors before resecuritizing those
Certificates in a REMIC.

      BECAUSE OF THE NET RATE CARRYOVER COMPONENT OF A REGULAR CERTIFICATE (AND
IN PARTICULAR, IN THE CASE OF THE SWAP CERTIFICATES, DUE TO THE DEEMED
OBLIGATION TO MAKE PAYMENTS WITH RESPECT TO THE SWAP CONTRACT), HOLDERS OF THE
REGULAR CERTIFICATES ARE ENCOURAGED TO CONSULT WITH THEIR TAX ADVISORS BEFORE
RESECURITIZING THEIR REGULAR CERTIFICATES IN A REMIC.

RESIDUAL CERTIFICATES

      The holders of the Residual Certificates must include the taxable income
of each underlying REMIC and the Master REMIC in their federal taxable income.
The resulting tax liability of the holders may exceed cash distributions to them
during certain periods. All or a portion of the taxable income from a Residual
Certificate recognized by a holder may be treated as "excess inclusion" income,
which with limited exceptions, cannot be reduced by deductions (including net
operating losses) and in all cases, is subject to U.S. federal income tax.

      In computing alternative minimum taxable income, the special rule
providing that taxable income cannot be less than the sum of the taxpayer's
excess inclusions for the year does not apply. However, a taxpayer's alternative
minimum taxable income cannot be less than the sum of the taxpayer's excess
inclusions for the year. In addition, the amount of any alternative minimum tax
net operating loss is determined without regard to any excess inclusions.

      Purchasers of a Residual Certificate (that is, one of the Class A-R
Certificates) are encouraged to consider carefully the tax consequences of an
investment in Residual Certificates discussed in the prospectus and consult
their tax advisors with respect to those consequences. See "Material Federal
Income Tax Consequences -- Taxation of Holders of Residual Interest Securities"
in the prospectus. In particular, prospective holders of Residual Certificates
are encouraged to consult their tax advisors regarding whether a Residual
Certificate will be treated as a "noneconomic" residual interest, as a "tax
avoidance potential" residual interest, or as both. Among other things, holders
of Noneconomic Residual Certificates should be aware of REMIC regulations that
govern the treatment of "inducement fees" and that may affect their ability to
transfer their Residual Certificates. See "Material Federal Income Tax
Consequences -- Taxation of Holders of Residual Interest Securities --
Restrictions on Ownership and Transfer of Residual Interest Securities --
Treatment of Inducement Fees," and "Material Federal Income Tax Consequences --
Tax Treatment of Foreign Investors" in the prospectus.

      Additionally, for information regarding Prohibited Transactions and
Treatment of Realized Losses, see "Material Federal Income Tax Consequences --
Taxation of the REMIC" in the prospectus.

      As a result of the Economic Growth and Tax Relief Reconciliation Act of
2001 (the "2001 ACT"), limitations imposed by section 68 of the Code on claiming
itemized deductions will be phased-out commencing in 2006, which will affect
individuals holding Residual Certificates. In addition, as a result of the Jobs
and Growth Tax Reconciliation Act of 2003 (the "2003 ACT"), the backup
withholding rate has been reduced to 28%. Unless they are amended, all
provisions of the 2001 Act and the 2003 Act will no longer apply for taxable
years beginning on or after December 31, 2010. See "Material Federal Income Tax
Consequences" in the prospectus. Investors are encouraged to consult their tax
advisors with respect to both statutes.


                                      S-120



                                   OTHER TAXES

      No representations are made regarding the tax consequences of the
purchase, ownership or disposition of the Certificates under any state, local or
foreign tax law.

      ALL INVESTORS ARE ENCOURAGED TO CONSULT THEIR TAX ADVISORS REGARDING THE
FEDERAL, STATE, LOCAL OR FOREIGN TAX CONSEQUENCES OF PURCHASING, OWNING OR
DISPOSING OF THE CERTIFICATES.

                              ERISA CONSIDERATIONS

      Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), prohibits "PARTIES IN INTEREST" with respect to an employee
benefit plan or other arrangement subject to ERISA from engaging in certain
transactions involving the plan and its assets unless a statutory, regulatory or
administrative exemption applies to the transaction. Section 4975 of the Code
imposes certain excise taxes on prohibited transactions involving "DISQUALIFIED
PERSONS" and employee benefit plans or other arrangements (including, but not
limited to, individual retirement accounts) described under that section
(collectively with employee benefit plans subject to ERISA, "PLANS"); ERISA
authorizes the imposition of civil penalties for prohibited transactions
involving Plans not covered under Section 4975 of the Code. Any Plan fiduciary
which proposes to cause a Plan to acquire the Offered Certificates (directly or
indirectly through investment by an entity or account holding assets of the
Plan) are encouraged to consult with its counsel with respect to the potential
consequences under ERISA and the Code of the Plan's acquisition and ownership of
Offered Certificates. See "ERISA Considerations" in the prospectus.

      Certain employee benefit plans, including governmental plans and certain
church plans, are not subject to ERISA's requirements. Accordingly, assets of
these plans may be invested in the Offered Certificates without regard to the
ERISA considerations described in this prospectus supplement and in the
prospectus, subject to the provisions of other applicable federal and state law.
Any plan of this type which is qualified and exempt from taxation under Sections
401(a) and 501(a) of the Code may be subject to the prohibited transaction rules
set forth in Section 503 of the Code.

      Investments by Plans or with assets of Plans that are subject to ERISA
must satisfy ERISA's general fiduciary requirements, including the requirement
of investment prudence and diversification and the requirement that a Plan's
investments be made in accordance with the documents governing the Plan. A
fiduciary which decides to invest the assets of a Plan in the Offered
Certificates should consider, among other factors, the extreme sensitivity of
the investments to the rate of principal payments (including prepayments) on the
Mortgage Loans. It is anticipated that the Certificates will constitute "equity
interests" for the purpose of the Plan Assets Regulation. It is anticipated that
the certificates will constitute "equity interests" in the issuing entity and,
in the case of the Swap Certificates, in the swap trust, for the purpose of the
Plan Assets Regulation.

      The U.S. Department of Labor has granted to one or more of the
underwriters substantially identical administrative exemptions (collectively,
the "EXEMPTION") from certain of the prohibited transaction rules of ERISA and
the related excise tax provisions of Section 4975 of the Code with respect to
the initial purchase, the holding and the subsequent resale by Plans of
securities, including certificates, issued by entities that hold investment
pools consisting of certain receivables, loans and other obligations and the
servicing, operation and management of these entities, provided that the
conditions and requirements of the Exemption, including the requirement that an
investing Plan be an "accredited investor" as defined in Rule 501(a)(1) of
Regulation D under the Securities Act of 1933, as amended, are met. The
Exemption extends exemptive relief to certificates, including subordinate
certificates, rated in the four highest generic rating categories in certain
designated transactions when the conditions of the Exemption are met.

      The Exemption provides exemptive relief to certain mortgage-backed and
asset-backed securities transactions using a pre-funding account. Mortgage loans
or other secured receivables supporting payments to certificateholders, and
having a value equal to no more than twenty-five percent (25%) of the total
principal amount of the certificates being offered by the entity, may be
transferred to the entity within a 90-day or three-month period following the
closing date, instead of being required to be either identified or transferred
on or before the closing date. The relief is available when the pre-funding
arrangements satisfy certain conditions.


                                      S-121



      For a general description of the Exemption and the conditions that must be
met for the Exemption to apply, see "ERISA Considerations" in the prospectus.

      Except as provided below with respect to the swap trust, it is expected
that the Exemption will apply to the acquisition and holding of the Offered
Certificates (other than the Class A-R Certificates) by Plans and that all
conditions of the Exemption other than those within the control of the investors
will be met. In addition, as of the date hereof, there is no single borrower
that is the obligor on five percent (5%) of the Mortgage Loans included in the
issuing entity by aggregate unamortized principal balance of the assets of the
issuing entity.

      The rating of a Certificate may change. If a class of Certificates no
longer has a rating of at least BBB- or its equivalent from at least one Rating
Agency, Certificates of that class will no longer be eligible for relief under
the Exemption (although a Plan that had purchased the security when it had a
permitted rating would not be required by the Exemption to dispose of it). An
Offered Certificate that satisfies the requirements of the Exemption other than
the rating requirement may be eligible for purchase by an insurance company
general account that includes plan assets in reliance on Sections I and III of
Prohibited Transaction Class Exemption 95-60.

      The Swap Contract does not meet all of the requirements for an "eligible
swap" under the Exemption and has not been included in the issuing entity, and
consequently an interest in the Swap Contract is not eligible for the exemptive
relief available under the Exemption. For ERISA purposes, an interest in a Swap
Certificate should represent a beneficial interest in two assets: (i) the right
to receive payments from the issuing entity with respect to the applicable class
and without taking into account payments made or received with respect to the
Swap Contract, and (ii) the right to receive payments from the swap trust. A
Plan's purchase and holding of a Swap Certificate could constitute or otherwise
result in a prohibited transaction under ERISA and Section 4975 of the Code
between an investing Plan and the Swap Counterparty unless an exemption is
available.

      Accordingly, so long as the Swap Contract and the swap trust are in
effect, no Plan or other person using plan assets may acquire or hold any
interest in a Swap Certificate unless, in addition to satisfying the conditions,
above, of the Exemption, such acquisition and holding are eligible for the
exemptive relief available under Department of Labor Prohibited Transaction
Class Exemption ("PTCE") 84-14 (for transactions effected by independent
"qualified professional asset managers", PTCE 90-1 (for transactions by
insurance company pooled separate accounts), PTCE 91-38 (for transactions by
bank collective investment funds), PTCE 95-60 (for transactions by insurance
company general accounts), or PTCE 96-23 (for transactions effected by "in-house
asset managers") (collectively, the "INVESTOR-BASED EXEMPTIONS") or a similar
exemption. It should be noted, however, that even if the conditions specified in
one or more Investor-Based Exemptions are met, the scope of relief may not
necessarily cover all acts that might be construed as prohibited transactions.
Plan fiduciaries should consult legal counsel concerning these issues.

      As long as the Swap Contract and the swap trust are in effect, each
beneficial owner of a Swap Certificate or any interest in a Swap Certificate, by
its acceptance and holding of such Swap Certificate or interest therein, will be
deemed to have represented that either (i) it is not a Plan or a person
investing plan assets in such Swap Certificate, or (ii) its acquisition and
holding of such Swap Certificate are eligible for the exemptive relief available
under at least one of the Investor-Based Exemptions.

      THE CLASS A-R CERTIFICATES DO NOT MEET THE REQUIREMENTS OF THE EXEMPTION
OR ANY COMPARABLE INDIVIDUAL ADMINISTRATIVE EXEMPTION GRANTED TO ANY
UNDERWRITER. CONSEQUENTLY, THE CLASS A-R CERTIFICATES MAY BE TRANSFERRED ONLY IF
THE TRUSTEE RECEIVES:

  o   A REPRESENTATION FROM THE TRANSFEREE OF THE CERTIFICATE, ACCEPTABLE TO AND
      IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE, THAT THE TRANSFEREE IS
      NOT A PLAN, OR A PERSON ACTING ON BEHALF OF A PLAN OR USING A PLAN'S
      ASSETS TO EFFECT THE TRANSFER; OR

  o   AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE AND
      HOLDING OF THE CERTIFICATE BY A PLAN, OR A PERSON ACTING ON BEHALF OF A
      PLAN OR USING A PLAN'S ASSETS, WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
      TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT
      THE TRUSTEE OR


                                      S-122



      THE MASTER SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN
      THE POOLING AND SERVICING AGREEMENT.

      IF THE REPRESENTATION IS NOT TRUE, OR ANY ATTEMPT TO TRANSFER TO A PLAN OR
A PERSON ACTING ON BEHALF OF A PLAN OR USING THE PLAN'S ASSETS IS INITIATED
WITHOUT THE REQUIRED OPINION OF COUNSEL, THE ATTEMPTED TRANSFER OR ACQUISITION
SHALL BE VOID.

      Prospective Plan investors are encouraged to consult with their legal
advisors concerning the impact of ERISA and the Code, the effect of the Plan
Assets Regulation, the applicability of the Exemption, and the potential
consequences in their specific circumstances, prior to making an investment in
the Offered Certificates. Moreover, each Plan fiduciary should determine whether
under the general fiduciary standards of investment prudence and
diversification, an investment in the in the Trust Fund, is appropriate for the
Plan and, in the case of the Swap Certificates, the swap trust represented by an
interest in the offered certificates is appropriate for the Plan, taking into
account the overall investment policy of the Plan and the composition of the
Plan's investment portfolio.

      The sale of the Offered Certificates to a Plan is in no respect a
representation by the issuing entity or any underwriter of the Certificates that
this investment meets all relevant legal requirements with respect to
investments by Plans generally or any particular Plan, or that this investment
is appropriate for Plans generally or any particular Plan.

                             METHOD OF DISTRIBUTION

      Subject to the terms and conditions set forth in the Underwriting
Agreement among the Depositor, Countrywide Securities Corporation (an affiliate
of the Depositor, the Sellers and the Master Servicer) and Lehman Brothers Inc.
(collectively, the "UNDERWRITERS"), the Depositor has agreed to sell the Offered
Certificates (other than the Class A-R Certificates) (the "UNDERWRITTEN
CERTIFICATES") to the Underwriters, and each Underwriter has severally agreed to
purchase from the Depositor the initial Certificate Principal Balance of each
class of Underwritten Certificates set forth under its name below.

                                 Countrywide
                                 Securities         Lehman Brothers
      CLASS                      Corporation              Inc.
      -----                   -----------------   ------------------
      Class AF-1..........     $   139,870,400     $      7,361,600
      Class AF-2..........     $    21,714,150     $      1,142,850
      Class AF-3..........     $    86,445,250     $      4,549,750
      Class AF-4..........     $    20,551,350     $      1,081,650
      Class AF-5..........     $    36,686,150     $      1,930,850
      Class AF-6..........     $    41,990,000     $      2,210,000
      Class MF-1..........     $    12,597,000     $        663,000
      Class MF-2..........     $    11,547,250     $        607,750
      Class MF-3..........     $     6,928,350     $        364,650
      Class MF-4..........     $     6,088,550     $        320,450
      Class MF-5..........     $     5,878,600     $        309,400
      Class MF-6..........     $     5,248,750     $        276,250
      Class AV-1..........     $   132,582,000     $      6,978,000
      Class AV-2..........     $   109,926,400     $      5,785,600
      Class AV-3..........     $    23,789,900     $      1,252,100
      Class MV-1..........     $    13,604,000     $        716,000
      Class MV-2..........     $    12,413,650     $        653,350
      Class MV-3..........     $     7,142,100     $        375,900
      Class MV-4..........     $     6,461,900     $        340,100
      Class MV-5..........     $     6,461,900     $        340,100
      Class MV-6..........     $     5,611,650     $        295,350
      Class MV-7..........     $     5,271,550     $        277,450
                              -----------------   ------------------
           Total..........     $   718,810,850     $     37,832,150


                                      S-123



      The Depositor has been advised by each Underwriter that it proposes
initially to offer the Underwritten Certificates to certain dealers at the
prices set forth on the cover page less a selling concession not to exceed the
percentage of the Certificate denomination set forth below, and that each
Underwriter may allow, and the dealers may reallow, a reallowance discount not
to exceed the percentage of the Certificate denomination set forth below:

                                   SELLING           REALLOWANCE
      CLASS                       CONCESSION           DISCOUNT
      -----                    ----------------    ----------------

      Class AF-1..........         0.03125%            0.01563%
      Class AF-2..........         0.06250%            0.03125%
      Class AF-3..........         0.09375%            0.04688%
      Class AF-4..........         0.15000%            0.07500%
      Class AF-5..........         0.20000%            0.10000%
      Class AF-6..........         0.25000%            0.12500%
      Class MF-1..........         0.25000%            0.12500%
      Class MF-2..........         0.30000%            0.15000%
      Class MF-3..........         0.35000%            0.17500%
      Class MF-4..........         0.50000%            0.25000%
      Class MF-5..........         0.60000%            0.30000%
      Class MF-6..........         0.75000%            0.37500%
      Class AV-1..........         0.03130%            0.01565%
      Class AV-2..........         0.06200%            0.03100%
      Class AV-3..........         0.06200%            0.03100%
      Class MV-1..........         0.25000%            0.12500%
      Class MV-2..........         0.30000%            0.15000%
      Class MV-3..........         0.50000%            0.25000%
      Class MV-4..........         0.55000%            0.27500%
      Class MV-5..........         0.58000%            0.29000%
      Class MV-6..........         0.60000%            0.30000%
      Class MV-7..........         0.65000%            0.32500%

      After the initial public offering, the public offering prices, the
concessions and the discounts may be changed.

      The Depositor has been advised by each Underwriter that it intends to make
a market in the Underwritten Certificates purchased by it, but no Underwriter
has any obligation to do so. We cannot assure you that a secondary market for
the Underwritten Certificates (or any particular class thereof) will develop or,
if it does develop, that it will continue or that this market will provide
sufficient liquidity to certificateholders.

      Until the distribution of the Underwritten Certificates is completed, the
rules of the SEC may limit the ability of the Underwriters and certain selling
group members to bid for and purchase the Underwritten Certificates. As an
exception to these rules, the Underwriters are permitted to engage in certain
transactions that stabilize the price of the Underwritten Certificates. The
transactions consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of the Underwritten Certificates.

      In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of the purchases.

      Neither the Depositor nor any of the Underwriters makes any representation
or prediction as to the direction or magnitude of any effect that the
transactions described above may have on the prices of the Underwritten
Certificates. In addition, neither the Depositor nor any of the Underwriters
makes any representation that the Underwriters will engage in these transactions
or that the transactions, once commenced, will not be discontinued without
notice.


                                      S-124



      The Depositor has agreed to indemnify the Underwriters against, or make
contributions to the Underwriters with respect to, certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the
"SECURITIES ACT").

      The Class A-R Certificates will not be purchased by the Underwriters but
will be transferred to Countrywide Home Loans on the Closing Date as partial
consideration for the sale of the Mortgage Loans to the Depositor. The Class A-R
Certificates may be offered by Countrywide Home Loans (or an affiliate) or the
Depositor from time to time directly or through underwriters or agents (either
of which may include Countrywide Securities Corporation) in one or more
negotiated transactions, or otherwise, at varying prices to be determined at the
time of sale, in one or more separate transactions at prices to be negotiated at
the time of each sale. Any underwriters or agents that participate in the
distribution of the Class A-R Certificates may be deemed to be "underwriters"
within the meaning of the Securities Act and any profit on the sale of the
certificates by them and any discounts, commissions, concessions or other
compensation received by any of them may be deemed to be underwriting discounts
and commissions under the Securities Act.

                                 USE OF PROCEEDS

      It is expected that the proceeds to the Depositor from the sale of the
Underwritten Certificates will be approximately $754,857,223, before deducting
issuance expenses payable by the Depositor, estimated to be approximately
$675,000. The Depositor will apply the net proceeds of the sale of the Offered
Certificates against the purchase price of the Initial Mortgage Loans on the
Closing Date and to deposit the Pre-Funded Amount, if any, in the Pre-Funding
Account.

                                  LEGAL MATTERS

      The validity of the Certificates, including certain federal income tax
consequences with respect thereto, will be passed upon for the Depositor by
Sidley Austin LLP, New York, New York. Certain legal matters will be passed upon
for the Underwriters by McKee Nelson LLP.


                                      S-125



                                     RATINGS

      It is a condition of the issuance of the Offered Certificates that each
class of Offered Certificates set forth below be assigned the ratings at least
as high as those designated below by Moody's Investors Service, Inc. ("MOODY'S")
and Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc. ("S&P") and together with Moody's, the "RATING AGENCIES").

                                   MOODY'S       S&P
                         CLASS      RATING      RATING
                        -------   ----------   --------
                         AF-1        Aaa         AAA
                         AF-2        Aaa         AAA
                         AF-3        Aaa         AAA
                         AF-4        Aaa         AAA
                         AF-5        Aaa         AAA
                         AF-6        Aaa         AAA
                         A-R         Aaa         AAA
                         MF-1        Aa1         AA+
                         MF-2        Aa2         AA+
                         MF-3        Aa3          AA
                         MF-4         A1         AA-
                         MF-5         A2          A+
                         MF-6         A3          A
                         AV-1        Aaa         AAA
                         AV-2        Aaa         AAA
                         AV-3        Aaa         AAA
                         MV-1        Aa1         AA+
                         MV-2        Aa2         AA+
                         MV-3        Aa3          AA
                         MV-4         A1         AA-
                         MV-5         A2          A+
                         MV-6         A3          A
                         MV-7        Baa1         A

      The ratings assigned to the Class A-R Certificates only address the return
of its Certificate Principal Balance. The Depositor has requested that each
Rating Agency maintain ongoing surveillance of the ratings assigned to the
Offered Certificates in accordance with the Rating Agency's policy, but we
cannot assure you that a Rating Agency will continue its surveillance of the
ratings assigned to the Offered Certificates.

      The security ratings assigned to the Offered Certificates should be
evaluated independently from similar ratings on other types of securities. A
security rating is not a recommendation to buy, sell or hold securities and may
be subject to revision or withdrawal at any time by the Rating Agencies. The
ratings on the Offered Certificates do not, however, constitute statements
regarding the likelihood or frequency of prepayments on the Mortgage Loans, the
payment of Net Rate Carryover, any payments under the Corridor Contract or the
anticipated yields in light of prepayments.

      The Depositor has not requested a rating of any Offered Certificates by
any rating agency other than Moody's and S&P. However, we cannot assure you as
to whether any other rating agency will rate the Offered Certificates or, if it
does, what ratings would be assigned by another rating agency. The ratings
assigned by another rating agency to the Offered Certificates could be lower
than the respective ratings assigned by the Rating Agencies.


                                      S-126



                             INDEX OF DEFINED TERMS

2001 Act..................................................................S-120
2003 Act..................................................................S-120
Accrual Period.............................................................S-57
Adjustable Rate Certificates...............................................S-54
Adjustable Rate Cumulative Loss Trigger Event..............................S-61
Adjustable Rate Delinquency Trigger Event..................................S-62
Adjustable Rate Excess Overcollateralization Amount........................S-62
Adjustable Rate Loan Group Excess Cashflow.................................S-82
Adjustable Rate Mortgage Loans.............................................S-29
Adjustable Rate OC Floor...................................................S-62
Adjustable Rate Overcollateralization Deficiency Amount....................S-62
Adjustable Rate Overcollateralization Reduction Amount.....................S-62
Adjustable Rate Overcollateralization Target Amount........................S-62
Adjustable Rate Overcollateralized Amount..................................S-63
Adjustable Rate Prepayment Vector.........................................S-104
Adjustable Rate Senior Enhancement Percentage..............................S-63
Adjustable Rate Stepdown Date..............................................S-63
Adjustable Rate Subordinate Certificates...................................S-54
Adjustable Rate Subordinate Class Principal Distribution Amount............S-63
Adjustable Rate Trigger Event..............................................S-64
Adjusted Net Mortgage Rate.................................................S-56
Adjustment Date............................................................S-30
Advance....................................................................S-46
Applied Realized Loss Amount...............................................S-93
ARPV......................................................................S-104
Bankruptcy Rate............................................................S-45
beneficial owner...........................................................S-55
Book-Entry Certificates....................................................S-55
Business Day...............................................................S-56
Carryover Reserve Fund.....................................................S-92
C-BASS...............................................................S-41, S-47
Certificate Account........................................................S-69
Certificate Owners.........................................................S-55
Certificate Principal Balance..............................................S-56
Certificates...............................................................S-54
Claims.....................................................................S-53
Class AF Certificates......................................................S-54
Class AF Principal Distribution Amount.....................................S-64
Class AV Certificates......................................................S-54
Class AV Principal Distribution Amount.....................................S-64
Code...............................................................S-117, S-120
Collateral Value...........................................................S-31
Compensating Interest......................................................S-46
Corridor Contract..........................................................S-84
Corridor Contract Administration Agreement.................................S-84
Corridor Contract Administrator............................................S-84
Corridor Contract Assignment Agreement.....................................S-84
Corridor Contract Ceiling Rate.............................................S-85
Corridor Contract Counterparty.............................................S-84
Corridor Contract Notional Balance.........................................S-85
Corridor Contract Strike Rate..............................................S-85
Corridor Contract Termination Date.........................................S-85
Countrywide Financial......................................................S-42
Countrywide Home Loans...............................................S-29, S-42
Countrywide Servicing......................................................S-42
CPR.......................................................................S-104
Credit Bureau Risk Score...................................................S-40
Current Interest...........................................................S-57
Cut-off Date...............................................................S-31
debt-to-income ratio.......................................................S-37
Definitive Certificate.....................................................S-55
Delay Delivery Mortgage Loans.............................................S-101
Deleted Mortgage Loan......................................................S-34
Depositor..................................................................S-29
Detailed Description.......................................................S-29
Determination Date.........................................................S-32
disqualified persons......................................................S-121
Distribution Account.......................................................S-71
Distribution Account Deposit Date..........................................S-71
Distribution Date..........................................................S-56
DTC........................................................................S-55
Due Dates..................................................................S-46
Due Period.................................................................S-57
ERISA.....................................................................S-121
Euroclear..................................................................S-55
Excess Corridor Contract Payment...........................................S-84
Excess Proceeds............................................................S-57
Exchange Act...............................................................S-85
Exemption.................................................................S-121
Expense Fee Rate...........................................................S-58
Extra Principal Distribution Amount........................................S-64
Final Recovery Determination...............................................S-57
Five-Year Hybrid Mortgage Loans............................................S-31
Fixed 30-Year Interest-Only Loan...........................................S-31
Fixed Rate Certificates....................................................S-54
Fixed Rate Cumulative Loss Trigger Event...................................S-64
Fixed Rate Delinquency Trigger Event.......................................S-65
Fixed Rate Excess Overcollateralization Amount.............................S-65
Fixed Rate Loan Group Excess Cashflow......................................S-81
Fixed Rate Mortgage Loans..................................................S-29
Fixed Rate OC Floor........................................................S-65
Fixed Rate Overcollateralization Deficiency Amount.........................S-65
Fixed Rate Overcollateralization Reduction Amount..........................S-65


                                      S-127



Fixed Rate Overcollateralization Target Amount.............................S-65
Fixed Rate Overcollateralized Amount.......................................S-66
Fixed Rate Prepayment Vector..............................................S-104
Fixed Rate Senior Enhancement Percentage...................................S-66
Fixed Rate Stepdown Date...................................................S-66
Fixed Rate Subordinate Certificates........................................S-54
Fixed Rate Subordinate Class Principal Distribution Amount.................S-66
Fixed Rate Trigger Event...................................................S-67
Foreclosure Rate...........................................................S-45
FRPV......................................................................S-104
Full Doc Program...........................................................S-38
Funding Period.............................................................S-35
Global Securities...........................................................I-1
Gross Margin...............................................................S-30
Group 1 Certificates.......................................................S-54
Group 2 Certificates.......................................................S-54
Hybrid Mortgage Loans......................................................S-31
Initial Cut-off Date.......................................................S-29
Initial Cut-off Date Pool Principal Balance................................S-29
Initial Cut-off Date Principal Balance.....................................S-29
Initial Mortgage Loans.....................................................S-29
Initial Mortgage Pool......................................................S-29
Initial Periodic Rate Cap..................................................S-30
Initial Target Subordination Percentage....................................S-67
Insurance Proceeds.........................................................S-57
Interest Carry Forward Amount..............................................S-58
Interest Determination Date..........................................S-58, S-91
Interest Funds.............................................................S-58
Interest Remittance Amount.................................................S-58
Investor-Based Exemptions.................................................S-122
issuing entity.............................................................S-53
Last Scheduled Distribution Date..........................................S-103
LIBOR Business Day...................................................S-60, S-92
Liquidation Proceeds.......................................................S-57
Litton...............................................................S-41, S-47
Loan Group.................................................................S-29
Loan Group 1...............................................................S-29
Loan Group 2...............................................................S-29
Loan-to-Value Ratio........................................................S-31
Master REMIC..............................................................S-117
Master Servicer Advance Date...............................................S-46
Master Servicing Fee.......................................................S-45
Maximum Mortgage Rate......................................................S-31
Minimum Mortgage Rate......................................................S-34
Modeling Assumptions......................................................S-105
Moody's..............................................................S-4, S-126
Mortgage File..............................................................S-32
Mortgage Index.............................................................S-30
Mortgage Loans.............................................................S-32
Mortgage Notes.............................................................S-29
Mortgage Rate..............................................................S-30
Mortgaged Properties.......................................................S-29
NAS Principal Distribution Amount..........................................S-67
Net Corridor Contract Payment..............................................S-84
Net Mortgage Rate..........................................................S-46
net rate cap...............................................................S-21
Net Rate Cap...............................................................S-58
Net Rate Carryover.........................................................S-59
Net Rate Carryover Component..............................................S-117
Net Swap Payment...........................................................S-87
NIM Insurer..........................................................S-1, S-100
NIM Insurer Default........................................................S-27
Offered Certificates.......................................................S-54
OID.......................................................................S-118
One-Month LIBOR............................................................S-91
Optional Termination Date..................................................S-97
Participants...............................................................S-56
parties in interest.......................................................S-121
Pass-Through Margin........................................................S-59
Pass-Through Rate..........................................................S-59
Percentage Interest........................................................S-57
Plans.....................................................................S-121
Pooling and Servicing Agreement............................................S-32
Pre-Funded Amount..........................................................S-35
Pre-Funding Account........................................................S-35
Prepayment Interest Excess.................................................S-46
Prepayment Interest Shortfall..............................................S-46
Prepayment Models.........................................................S-104
Prepayment Period..........................................................S-31
Principal Distribution Amount..............................................S-68
Principal Remittance Amount................................................S-68
PTCE......................................................................S-122
Purchase Price.............................................................S-34
Rating Agencies...........................................................S-126
Realized Loss..............................................................S-68
Record Date................................................................S-57
Reference Bank Rate..................................................S-60, S-91
Reference Banks......................................................S-60, S-92
Regular Certificateholders................................................S-117
Regular Certificates......................................................S-117
Regulation AB..............................................................S-85
related subordinate classes................................................S-19
REMIC Regular Interest Component..........................................S-117
REO Property...............................................................S-46
Replacement Mortgage Loan..................................................S-34
Required Carryover Reserve Fund Deposit....................................S-92
Residual Certificates...............................................S-80, S-117
Rolling Sixty-Day Delinquency Rate.........................................S-69
S&P..................................................................S-4, S-126
Scheduled Payments.........................................................S-29
SEC........................................................................S-29
Securities Act............................................................S-125
Seller.....................................................................S-29
Seller Shortfall Interest Requirement......................................S-60
Senior Certificates........................................................S-54
Servicing Advances.........................................................S-70
Servicing Fee Rate.........................................................S-45
significance estimate................................................S-86, S-91
significance percentage..............................................S-86, S-91
Sixty-Day Delinquency Rate.................................................S-69


                                      S-128



Special Servicer...........................................................S-41
Special Servicer Event of Default..........................................S-50
Special Servicing Account..................................................S-50
Special Servicing Fee......................................................S-45
Special Sub-Servicing Agreement............................................S-41
Specially Serviced Mortgage Loan...........................................S-41
Stated Income Program......................................................S-38
Stated Principal Balance...................................................S-31
Statistical Calculation Date...............................................S-29
Statistical Calculation Date Pool Principal Balance........................S-29
Statistical Calculation Pool...............................................S-29
Statistical Calculation Pool Mortgage Loans................................S-29
Stepdown Target Subordination Percentage...................................S-67
Subordinate Certificates...................................................S-54
subordination..............................................................S-19
Subsequent Cut-off Date....................................................S-35
Subsequent Mortgage Loans..................................................S-35
Subsequent Periodic Rate Cap...............................................S-30
Subsequent Recoveries......................................................S-57
Subsequent Transfer Date...................................................S-35
Sunfish....................................................................S-41
Swap Account...............................................................S-72
Swap Adjustment Rate.......................................................S-61
Swap Certificates..........................................................S-54
Swap Contract..............................................................S-86
Swap Contract Administration Agreement.....................................S-86
Swap Contract Administrator................................................S-86
Swap Contract Assignment Agreement.........................................S-86
Swap Contract Notional Balance.............................................S-89
Swap Contract Termination Date.............................................S-89
Swap Counterparty..........................................................S-86
Swap Counterparty Ratings Requirement......................................S-90
Swap Counterparty Trigger Event............................................S-91
Swap Termination Payment...................................................S-89
Tax Counsel...............................................................S-117
Termination Payments......................................................S-119
Three-Year Hybrid Mortgage Loans...........................................S-31
Trigger Event..............................................................S-69
Trust......................................................................S-53
Trust Fund.................................................................S-53
Trustee....................................................................S-32
Trustee Fee................................................................S-74
Trustee Fee Rate...........................................................S-61
Two-Year Hybrid Mortgage Loans.............................................S-31
U.S. Person.................................................................I-4
underlying REMIC..........................................................S-117
underlying REMIC Regular Interests........................................S-117
Underwriters..............................................................S-123
Underwritten Certificates.................................................S-123
Unpaid Realized Loss Amount................................................S-69


                                      S-129



                     [THIS PAGE INTENTIONALLY LEFT BLANK.]

                                                                         ANNEX A

                        THE STATISTICAL CALCULATION POOL

      The following information sets forth in tabular format certain
information, as of the Statistical Calculation Date, about the Mortgage Loans
included in the Statistical Calculation Pool in respect of Loan Group 1 and Loan
Group 2. Other than with respect to rates of interest, percentages are
approximate and are stated by that portion of the Statistical Calculation Date
Pool Principal Balance representing Loan Group 1 or Loan Group 2. The sum of the
columns below may not equal the total indicated due to rounding. In addition,
each weighted average Credit Bureau Risk Score set forth below has been
calculated without regard to any Mortgage Loan for which the Credit Bureau Risk
Score is unknown.



                                                     GROUP 1 MORTGAGE LOANS

                                      MORTGAGE LOAN PROGRAMS FOR THE GROUP 1 MORTGAGE LOANS
                                               IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
MORTGAGE LOAN PROGRAM             LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

15 Year Fixed ...............        89    $    13,075,089        2.61%    $ 146,911    7.305%     179.47        605       69.1%
20 Year Fixed ...............         2            219,150        0.04       109,575    9.150      240.00        588       87.4
30 Year Fixed ...............     2,092        417,303,548       83.46       199,476    7.199      359.52        608       73.3
30 Year Fixed - 60-month
  Interest Only .............       258         69,164,459       13.83       268,079    6.807      359.45        631       77.7
30/15 Fixed Balloon .........         3            245,481        0.05        81,827    9.724      171.12        647       40.6
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg .....     2,444    $   500,007,727      100.00%
                                =========  ===============    ===========




                                 ORIGINAL TERM TO STATED MATURITY FOR THE GROUP 1 MORTGAGE LOANS
                                               IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
ORIGINAL TERM (MONTHS)            LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

Fixed 180 ...................        92    $    13,320,570        2.66%    $ 144,789    7.350%     179.32        606       68.6%
Fixed 240 ...................         2            219,150        0.04       109,575    9.150      240.00        588       87.4
Fixed 360 ...................     2,350        486,468,007       97.29       207,008    7.143      359.51        612       73.9
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg .....     2,444    $   500,007,727      100.00%
                                =========  ===============    ===========



                                       A-1





                                 MORTGAGE LOAN PRINCIPAL BALANCES FOR THE GROUP 1 MORTGAGE LOANS
                                               IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
RANGE OF MORTGAGE LOAN          MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
PRINCIPAL BALANCES                LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

$25,000.01 - $50,000.00 .....        14    $       693,853        0.14%    $  49,561    9.448%     333.70        587       71.9%
$50,000.01 - $75,000.00 .....       137          8,550,015        1.71        62,409    8.901      343.64        606       83.5
$75,000.01 - $100,000.00 ....       241         21,146,814        4.23        87,746    7.833      345.38        600       77.1
$100,000.01 - $150,000.00 ...       559         70,209,860       14.04       125,599    7.492      352.28        602       75.4
$150,000.01 - $200,000.00 ...       507         87,686,360       17.54       172,951    7.415      351.90        598       73.2
$200,000.01 - $250,000.00 ...       324         73,214,113       14.64       225,969    7.283      356.12        602       72.2
$250,000.01 - $300,000.00 ...       226         61,806,314       12.36       273,479    7.010      357.07        605       72.9
$300,000.01 - $350,000.00 ...       151         49,266,275        9.85       326,267    6.882      359.49        614       72.9
$350,000.01 - $400,000.00 ...       123         46,429,979        9.29       377,480    6.764      356.50        629       71.0
$400,000.01 - $450,000.00 ...        67         28,480,055        5.70       425,075    6.543      353.86        630       74.2
$450,000.01 - $500,000.00 ...        35         16,844,182        3.37       481,262    6.667      353.98        632       75.3
$500,000.01 - $550,000.00 ...        19          9,816,917        1.96       516,680    6.491      359.27        653       78.7
$550,000.01 - $600,000.00 ...        22         12,709,682        2.54       577,713    6.445      359.24        658       77.8
$600,000.01 - $650,000.00 ...        11          6,870,900        1.37       624,627    6.721      359.46        653       78.8
$650,000.01 - $700,000.00 ...         3          2,005,600        0.40       668,533    6.391      360.00        675       80.9
$700,000.01 - $750,000.00 ...         1            705,000        0.14       705,000    6.750      360.00        611       57.6
$850,000.01 - $900,000.00 ...         3          2,633,806        0.53       877,935    6.367      359.66        636       61.5
Greater than $900,000.00 ....         1            938,000        0.19       938,000    6.250      360.00        609       49.4
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     2,444    $   500,007,727      100.00%
                                =========  ===============    ===========



                                       A-2





                          STATE DISTRIBUTION OF THE MORTGAGED PROPERTIES FOR THE GROUP 1 MORTGAGE LOANS
                                               IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
STATE                             LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

Alabama .....................        22    $     2,260,853        0.45%    $ 102,766    7.974%     350.11        608       83.1%
Alaska ......................         1            195,000        0.04       195,000    6.875      360.00        600       83.3
Arizona .....................       120         23,661,869        4.73       197,182    7.286      358.29        600       72.6
Arkansas ....................        11          1,509,140        0.30       137,195    7.288      360.00        616       78.6
California ..................       464        136,865,528       27.37       294,969    6.566      357.06        624       67.3
Colorado ....................        14          2,117,045        0.42       151,217    7.733      359.29        616       75.8
Connecticut .................        24          4,355,927        0.87       181,497    7.403      354.73        608       71.8
Delaware ....................        13          2,362,898        0.47       181,761    7.126      346.75        602       83.5
District of Columbia ........         7          1,869,850        0.37       267,121    7.610      360.00        587       68.7
Florida .....................       427         75,575,505       15.11       176,992    7.315      355.52        599       74.7
Georgia .....................        31          4,877,445        0.98       157,337    7.983      331.97        632       82.3
Hawaii ......................        29          9,683,236        1.94       333,905    6.797      357.55        647       76.6
Idaho .......................        12          1,913,178        0.38       159,431    7.027      359.97        601       79.5
Illinois ....................        55         10,062,680        2.01       182,958    7.623      352.13        606       79.9
Indiana .....................        25          2,491,763        0.50        99,671    8.391      349.76        611       80.9
Iowa ........................         6            934,308        0.19       155,718    7.880      359.36        601       83.3
Kansas ......................        11          1,486,658        0.30       135,151    8.267      359.95        604       82.6
Kentucky ....................        22          2,710,215        0.54       123,192    7.721      344.94        625       83.2
Louisiana ...................         7            900,142        0.18       128,592    8.828      359.91        590       84.4
Maine .......................        23          2,953,226        0.59       128,401    7.521      359.85        603       81.0
Maryland ....................        54         11,253,084        2.25       208,390    7.782      357.42        576       73.2
Massachusetts ...............        45         10,918,456        2.18       242,632    7.456      359.42        588       70.9
Michigan ....................        41          5,921,348        1.18       144,423    7.875      358.09        612       79.4
Minnesota ...................        21          3,873,175        0.77       184,437    7.540      359.25        617       83.1
Mississippi .................         7            660,671        0.13        94,382    9.112      359.92        609       76.3
Missouri ....................        50          6,912,559        1.38       138,251    7.666      343.12        608       83.7
Montana .....................         9          1,233,241        0.25       137,027    7.728      335.01        623       83.0
Nebraska ....................        11          1,266,375        0.25       115,125    8.665      296.44        587       82.0
Nevada ......................        53         13,151,353        2.63       248,139    6.910      354.07        627       75.9
New Hampshire ...............        33          6,391,891        1.28       193,694    7.111      354.57        597       80.0
New Jersey ..................        19          4,382,748        0.88       230,671    7.992      359.36        570       70.0
New Mexico ..................        11          2,107,763        0.42       191,615    7.709      359.51        613       79.0
New York ....................       199         56,715,566       11.34       285,003    6.971      353.33        618       73.1
North Carolina ..............        20          3,063,833        0.61       153,192    8.340      359.63        614       83.6
North Dakota ................         2            276,750        0.06       138,375    7.232      360.00        584       81.1
Ohio ........................        25          2,761,769        0.55       110,471    8.424      350.59        591       87.5
Oklahoma ....................        14          1,548,370        0.31       110,598    8.007      338.71        608       86.3
Oregon ......................        17          2,777,694        0.56       163,394    6.929      350.69        629       73.2
Pennsylvania ................        66          9,747,618        1.95       147,691    7.662      344.39        609       79.2
Rhode Island ................         8          1,345,500        0.27       168,188    7.075      360.00        569       57.9
South Carolina ..............         8          1,478,569        0.30       184,821    7.749      359.83        619       78.7
South Dakota ................         2            222,486        0.04       111,243    7.803      358.55        643       93.4
Tennessee ...................        44          4,357,860        0.87        99,042    7.826      339.63        628       85.5
Texas .......................       149         18,859,015        3.77       126,571    7.495      348.70        612       78.9
Utah ........................        14          2,904,033        0.58       207,431    6.662      359.64        617       77.3
Vermont .....................         6          1,253,400        0.25       208,900    7.751      360.00        596       78.8
Virginia ....................       124         24,532,124        4.91       197,840    7.207      357.04        598       76.0
Washington ..................        35          6,526,945        1.31       186,484    7.140      349.87        622       78.9
West Virginia ...............         4            867,025        0.17       216,756    8.221      360.00        595       86.7
Wisconsin ...................        20          2,816,504        0.56       140,825    8.441      348.25        586       82.1
Wyoming .....................         9          1,093,536        0.22       121,504    7.537      344.62        595       71.3
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     2,444    $   500,007,727      100.00%
                                =========  ===============    ===========



                                       A-3





                                       LOAN-TO-VALUE RATIOS FOR THE GROUP 1 MORTGAGE LOANS
                                               IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
RANGE OF LOAN-TO-VALUE          MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
RATIOS (%)                        LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

50.00 or Less ...............       132    $    27,232,754        5.45%    $ 206,309    6.672%     347.68        596       42.6%
50.01 -  55.00 ..............       117         26,535,057        5.31       226,795    6.696      352.16        599       52.9
55.01 -  60.00 ..............       138         29,664,855        5.93       214,963    6.851      355.16        598       57.8
60.01 -  65.00 ..............       223         50,168,189       10.03       224,969    6.838      353.15        605       63.2
65.01 -  70.00 ..............       221         47,292,491        9.46       213,993    7.107      352.15        588       68.3
70.01 -  75.00 ..............       242         54,066,660       10.81       223,416    7.114      357.22        601       73.3
75.01 -  80.00 ..............       637        126,005,148       25.20       197,810    7.118      356.21        628       79.4
80.01 -  85.00 ..............       272         55,508,109       11.10       204,074    7.402      356.39        609       84.0
85.01 -  90.00 ..............       338         64,015,557       12.80       189,395    7.588      355.33        624       89.3
90.01 -  95.00 ..............        91         15,443,567        3.09       169,710    7.809      354.09        626       94.2
95.01 - 100.00 ..............        33          4,075,340        0.82       123,495    8.390      347.87        650       99.6
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     2,444    $   500,007,727      100.00%
                                =========  ===============    ===========




                                        CURRENT MORTGAGE RATES FOR THE GROUP 1 MORTGAGE LOANS
                                                 IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
RANGE OF CURRENT MORTGAGE       MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
RATES (%)                         LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

5.001 - 5.500 ...............         4    $     1,315,978        0.26%    $ 328,994    5.500%     358.96        715       64.1%
5.501 - 6.000 ...............       170         48,054,037        9.61       282,671    5.887      355.03        656       65.9
6.001 - 6.500 ...............       434        111,218,654       22.24       256,264    6.342      354.09        624       69.6
6.501 - 7.000 ...............       611        136,043,213       27.21       222,657    6.827      356.71        615       73.9
7.001 - 7.500 ...............       380         73,250,625       14.65       192,765    7.342      355.17        606       76.3
7.501 - 8.000 ...............       311         54,369,607       10.87       174,822    7.820      353.67        592       77.7
8.001 - 8.500 ...............       175         26,679,986        5.34       152,457    8.308      352.09        593       80.1
8.501 - 9.000 ...............       131         20,414,666        4.08       155,837    8.795      351.38        571       77.8
9.001 - 9.500 ...............        75         10,483,956        2.10       139,786    9.320      348.15        577       80.4
9.501 - 10.000 ..............        53          6,956,707        1.39       131,259    9.812      350.10        562       81.6
10.001 - 10.500 .............        42          4,797,724        0.96       114,232   10.320      357.64        551       80.0
10.501 - 11.000 .............        36          4,143,674        0.83       115,102   10.770      353.74        549       78.0
11.001 - 11.500 .............        12          1,223,066        0.24       101,922   11.312      352.56        551       82.6
11.501 - 12.000 .............        10          1,055,833        0.21       105,583   11.725      359.71        539       83.2
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     2,444    $   500,007,727      100.00%
                                =========  ===============    ===========



                                       A-4





                                   TYPES OF MORTGAGED PROPERTIES FOR THE GROUP 1 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
MORTGAGED PROPERTY TYPE           LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

Single Family Residence .....     1,860    $   367,652,104       73.53%    $ 197,662    7.163%     354.34        610       73.6%
Planned Unit Development ....       329         77,611,098       15.52       235,900    7.047      355.14        614       75.8
Two Family Home .............        96         25,256,429        5.05       263,088    7.066      352.88        629       71.1
Low-Rise Condominium ........       131         23,022,807        4.60       175,747    7.312      358.92        603       74.2
Three Family Home ...........        12          3,209,644        0.64       267,470    7.165      359.19        606       69.0
Four Family Home ............         8          1,722,163        0.34       215,270    7.458      358.85        611       66.3
High-Rise Condominium .......         8          1,533,482        0.31       191,685    7.534      359.16        638       78.5
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     2,444    $   500,007,727      100.00%
                                =========  ===============    ===========




                                           LOAN PURPOSES FOR THE GROUP 1 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
LOAN PURPOSE                      LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

Refinance - Cash Out ........     2,011    $   423,538,356       84.71%    $ 210,611    7.148%     354.33        606       73.0%
Purchase ....................       269         47,592,160        9.52       176,923    7.255      357.66        654       79.8
Refinance - Rate/Term .......       164         28,877,211        5.78       176,081    7.000      354.63        625       75.5
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     2,444    $   500,007,727      100.00%
                                =========  ===============    ===========




                                          OCCUPANCY TYPES FOR THE GROUP 1 MORTGAGE LOANS
                                              IN THE STATISTICAL CALCULATION POOL(1)

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
OCCUPANCY TYPE                    LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

Owner Occupied ..............     2,357    $   485,727,183       97.14%    $ 206,079    7.136%     354.82        611       73.7%
Investment Property .........        69         10,405,334        2.08       150,802    7.691      348.38        639       76.2
Second Home .................        18          3,875,210        0.78       215,289    7.377      350.88        617       70.5
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     2,444    $   500,007,727      100.00%
                                =========  ===============    ===========


      ______________
      (1)   Based on representations by the Mortgagors at the time of
            origination of the related Mortgage Loans.


                                       A-5





                                 REMAINING TERMS TO STATED MATURITY FOR THE GROUP 1 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
RANGE OF REMAINING TERMS        MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
(MONTHS)                          LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

121 - 180 ...................        92    $    13,320,570        2.66%    $ 144,789    7.350%     179.32        606       68.6%
181 - 300 ...................         2            219,150        0.04       109,575    9.150      240.00        588       87.4
301 - 360 ...................     2,350        486,468,007       97.29       207,008    7.143      359.51        612       73.9
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     2,444    $   500,007,727      100.00%
                                =========  ===============    ===========




                                      LOAN DOCUMENTATION TYPE FOR THE GROUP 1 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
LOAN DOCUMENTATION TYPE           LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

Full Documentation ..........     1,866    $   369,340,210       73.87%    $ 197,932    7.056%     355.20        609       74.5%
Stated Income ...............       578        130,667,517       26.13       226,068    7.413      353.14        617       71.6
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     2,444    $   500,007,727      100.00%
                                =========  ===============    ===========




                                    CREDIT BUREAU RISK SCORES(1) FOR THE GROUP 1 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
RANGE OF CREDIT BUREAU          MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
RISK SCORES                       LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

781 - 800 ...................         8    $     1,670,853        0.33%    $ 208,857    6.412%     339.72        788       78.4%
761 - 780 ...................        20          6,372,080        1.27       318,604    6.199      359.10        772       72.7
741 - 760 ...................        30          8,823,540        1.76       294,118    6.268      358.88        751       73.2
721 - 740 ...................        22          5,577,833        1.12       253,538    6.785      356.96        730       81.2
701 - 720 ...................        46         10,716,376        2.14       232,965    6.618      355.69        709       75.7
681 - 700 ...................        96         20,919,423        4.18       217,911    6.567      355.10        690       78.2
661 - 680 ...................       121         26,986,532        5.40       223,029    6.764      355.44        669       76.5
641 - 660 ...................       211         47,275,234        9.45       224,053    6.876      356.87        650       76.1
621 - 640 ...................       336         70,148,378       14.03       208,775    7.013      350.89        630       76.2
601 - 620 ...................       411         88,481,337       17.70       215,283    7.000      355.45        611       74.7
581 - 600 ...................       351         70,643,750       14.13       201,264    7.101      354.78        591       73.1
561 - 580 ...................       278         51,592,350       10.32       185,584    7.427      354.48        570       72.2
541 - 560 ...................       227         40,537,288        8.11       178,578    7.702      351.78        550       70.9
521 - 540 ...................       171         30,316,087        6.06       177,287    8.028      355.43        531       67.4
501 - 520 ...................       109         18,862,177        3.77       173,047    8.213      359.11        510       66.4
500 or Less .................         7          1,084,489        0.22       154,927    8.137      359.79        500       67.8
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     2,444    $   500,007,727      100.00%
                                =========  ===============    ===========


      ______________
      (1)   The Credit Bureau Risk Scores referenced in this table with respect
            to substantially all of the Group 1 Mortgage Loans were obtained by
            the respective originators from one or more credit reporting
            agencies, and were determined at the time of origination.


                                       A-6





                                      CREDIT GRADE CATEGORIES FOR THE GROUP 1 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
CREDIT GRADE CATEGORY             LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

A ...........................     1,774    $   369,331,585       73.87%    $ 208,191    7.055%     354.73        621       74.7%
A- ..........................       148         34,270,218        6.85       231,556    7.269      353.88        587       74.2
B ...........................       213         43,585,932        8.72       204,629    7.427      355.98        582       69.5
C ...........................       192         34,767,639        6.95       181,081    7.477      354.50        583       68.6
C- ..........................        92         13,880,647        2.78       150,877    7.451      351.55        600       74.7
D ...........................        25          4,171,707        0.83       166,868    7.922      352.83        567       69.1
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     2,444    $   500,007,727      100.00%
                                =========  ===============    ===========




                                     PREPAYMENT PENALTY PERIOD FOR THE GROUP 1 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
PREPAYMENT PENALTY PERIOD       MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
(MONTHS)                          LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

0 ...........................       329    $    57,288,137       11.46%    $ 174,128    7.914%     352.14        588       75.3%
12 ..........................       226         63,137,419       12.63       279,369    7.054      354.23        615       73.0
24 ..........................       101         17,083,439        3.42       169,143    7.523      351.55        597       72.7
36 ..........................       482         92,282,151       18.46       191,457    7.315      354.20        615       74.4
60 ..........................     1,306        270,216,581       54.04       206,904    6.929      355.65        615       73.5
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     2,444    $   500,007,727      100.00%
                                =========  ===============    ===========




                                        INTEREST ONLY PERIOD FOR THE GROUP 1 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
INTEREST ONLY PERIOD            MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
(MONTHS)                          LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

0 ...........................     2,186    $   430,843,268       86.17%    $ 197,092    7.204%     353.89        608       73.1%
60 ..........................       258         69,164,459       13.83       268,079    6.807      359.45        631       77.7
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     2,444    $   500,007,727      100.00%
                                =========  ===============    ===========



                                       A-7





                                                      GROUP 2 MORTGAGE LOANS

                                       MORTGAGE LOAN PROGRAMS FOR THE GROUP 2 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
MORTGAGE LOAN PROGRAM             LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

30-Year 6-month LIBOR .......        13    $     2,636,050        0.66%    $ 202,773    7.335%     360.00        576       81.0%
2/28 6-month LIBOR ..........       444         94,007,800       23.50       211,729    7.756      359.07        594       76.1
2/28 6-month LIBOR - 24-month
  Interest Only .............       187         54,659,313       13.66       292,296    7.137      359.43        658       80.7
2/28 6-month LIBOR - 60-month
  Interest Only .............        53         14,472,639        3.62       273,069    6.894      358.60        656       76.6
3/27 6-month LIBOR ..........       737        151,238,081       37.81       205,208    7.763      359.10        602       76.9
3/27 6-month LIBOR - 36-month
  Interest Only .............       282         74,828,610       18.71       265,350    7.060      359.32        643       79.5
3/27 6-month LIBOR - 60-month
  Interest Only .............        33          7,914,673        1.98       239,839    7.419      358.83        631       79.4
5/25 6-month LIBOR ..........         1            244,744        0.06       244,744    5.750      358.00        670       70.0
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========




                                  ORIGINAL TERM TO STATED MATURITY FOR THE GROUP 2 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
ORIGINAL TERM (MONTHS)            LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

ARM 360 .....................     1,750    $   400,001,910      100.00%    $ 228,573    7.502%     359.16        618       77.8%
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========



                                       A-8





                                  MORTGAGE LOAN PRINCIPAL BALANCES FOR THE GROUP 2 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
RANGE OF MORTGAGE LOAN          MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
PRINCIPAL BALANCES                LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

$50,000.01 - $75,000.00 .....        68    $     4,358,519        1.09%    $  64,096    8.863%     358.72        599       87.3%
$75,000.01 - $100,000.00 ....       103          9,007,281        2.25        87,449    7.955      359.24        597       83.2
$100,000.01 - $150,000.00 ...       254         32,594,309        8.15       128,324    7.807      359.13        604       82.1
$150,000.01 - $200,000.00 ...       384         67,675,132       16.92       176,237    7.832      359.46        592       76.0
$200,000.01 - $250,000.00 ...       340         76,182,966       19.05       224,068    7.665      359.22        605       76.8
$250,000.01 - $300,000.00 ...       230         63,422,075       15.86       275,748    7.527      359.17        612       77.0
$300,000.01 - $350,000.00 ...       141         45,865,782       11.47       325,289    7.101      359.10        631       77.2
$350,000.01 - $400,000.00 ...       111         41,815,819       10.45       376,719    7.030      358.95        645       77.9
$400,000.01 - $450,000.00 ...        41         17,526,033        4.38       427,464    6.963      358.34        654       75.2
$450,000.01 - $500,000.00 ...        36         17,080,653        4.27       474,463    7.041      359.33        648       76.8
$500,000.01 - $550,000.00 ...        20         10,522,552        2.63       526,128    7.341      359.34        659       80.2
$550,000.01 - $600,000.00 ...        11          6,312,462        1.58       573,860    7.194      359.09        656       83.5
$600,000.01 - $650,000.00 ...         8          5,128,000        1.28       641,000    8.245      360.00        640       80.9
$750,000.01 - $800,000.00 ...         2          1,525,000        0.38       762,500    7.676      357.99        704       85.0
Greater than $900,000.00 ....         1            985,326        0.25       985,326    6.270      355.00        640       90.0
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========



                                       A-9





                           STATE DISTRIBUTION OF THE MORTGAGED PROPERTIES FOR THE GROUP 2 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
STATE                             LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

Alabama .....................         6    $       810,640        0.20%    $ 135,107    7.715%     358.64        628       90.7%
Alaska ......................         1            584,250        0.15       584,250    7.750      355.00        586       95.0
Arizona .....................       141         30,495,430        7.62       216,280    7.638      359.35        593       76.3
Arkansas ....................         8          1,143,373        0.29       142,922    8.798      358.48        600       88.9
California ..................       410        129,930,876       32.48       316,905    6.931      358.98        644       75.2
Colorado ....................        47          8,948,334        2.24       190,390    7.462      359.06        614       83.9
Connecticut .................        11          2,276,343        0.57       206,940    7.583      359.07        622       80.4
Delaware ....................         2            289,200        0.07       144,600    7.609      360.00        541       72.2
District of Columbia ........         2            346,920        0.09       173,460    6.641      359.35        587       64.8
Florida .....................       309         67,602,672       16.90       218,779    7.909      359.33        607       79.4
Georgia .....................        42          6,696,080        1.67       159,430    8.330      359.30        613       82.0
Hawaii ......................         4          1,105,200        0.28       276,300    7.271      360.00        639       78.1
Idaho .......................         6            881,450        0.22       146,908    8.329      358.72        629       88.7
Illinois ....................        74         15,727,667        3.93       212,536    8.123      359.61        607       81.1
Indiana .....................        16          1,882,515        0.47       117,657    8.763      359.35        576       83.8
Iowa ........................        13          1,420,732        0.36       109,287    8.357      359.43        617       86.3
Kansas ......................         5            869,879        0.22       173,976    8.879      358.42        560       90.0
Kentucky ....................         9          1,343,810        0.34       149,312    8.033      359.74        599       87.2
Louisiana ...................         3            224,331        0.06        74,777   10.870      359.02        559       96.4
Maine .......................        10          2,038,716        0.51       203,872    7.639      359.20        571       82.0
Maryland ....................        43         10,364,201        2.59       241,028    7.830      359.46        584       72.8
Massachusetts ...............        20          4,450,490        1.11       222,524    7.975      359.44        582       68.8
Michigan ....................        51          7,146,880        1.79       140,135    8.203      359.35        590       83.2
Minnesota ...................        31          6,854,818        1.71       221,123    7.828      359.26        598       79.9
Mississippi .................         2            243,300        0.06       121,650    7.590      360.00        620       83.6
Missouri ....................        35          4,471,366        1.12       127,753    8.445      359.15        604       87.5
Nebraska ....................         5            534,140        0.13       106,828    8.771      360.00        624       88.3
Nevada ......................        53         12,282,168        3.07       231,739    7.554      359.41        616       76.1
New Hampshire ...............        15          2,933,937        0.73       195,596    7.507      359.14        621       78.0
New Jersey ..................        24          5,913,289        1.48       246,387    8.220      359.75        586       71.0
New Mexico ..................         4            902,725        0.23       225,681    8.136      359.84        604       79.0
New York ....................        69         19,927,524        4.98       288,805    7.155      358.31        646       75.6
North Carolina ..............        14          2,418,115        0.60       172,722    7.803      358.59        599       79.4
North Dakota ................         2            162,800        0.04        81,400    8.361      360.00        664       80.0
Ohio ........................         5            717,898        0.18       143,580    7.738      357.01        612       90.2
Oklahoma ....................         6            450,798        0.11        75,133    8.522      359.52        605       91.4
Oregon ......................        12          2,148,373        0.54       179,031    7.188      358.61        609       80.0
Pennsylvania ................        35          5,613,367        1.40       160,382    7.897      359.49        584       77.0
Rhode Island ................         2            452,408        0.11       226,204    7.528      360.00        645       84.4
South Carolina ..............         7          1,474,900        0.37       210,700    7.842      360.00        610       77.9
South Dakota ................         5            430,327        0.11        86,065    7.756      359.32        631       81.5
Tennessee ...................        17          2,568,318        0.64       151,078    7.962      358.66        630       85.2
Texas .......................        36          5,068,123        1.27       140,781    7.515      359.22        608       80.7
Utah ........................         5          1,237,720        0.31       247,544    7.515      360.00        646       87.6
Virginia ....................        99         21,024,624        5.26       212,370    7.371      359.33        601       79.5
Washington ..................        16          3,132,679        0.78       195,792    6.918      359.35        610       74.7
West Virginia ...............         1            104,400        0.03       104,400    8.550      360.00        551       90.0
Wisconsin ...................        12          1,638,632        0.41       136,553    8.856      359.56        586       86.1
Wyoming .....................         5            715,175        0.18       143,035    7.431      358.59        634       88.4
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========



                                      A-10





                                        LOAN-TO-VALUE RATIOS FOR THE GROUP 2 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
RANGE OF LOAN-TO-VALUE          MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
RATIOS (%)                        LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

50.00 or Less ...............        24    $     5,435,357        1.36%    $ 226,473    8.280%     359.13        560       45.2%
50.01 - 55.00 ...............        28          7,212,729        1.80       257,597    7.773      359.67        555       53.2
55.01 - 60.00 ...............        60         13,656,304        3.41       227,605    7.508      358.93        572       57.5
60.01 - 65.00 ...............       122         29,406,092        7.35       241,034    7.501      359.52        575       63.3
65.01 - 70.00 ...............       143         33,671,697        8.42       235,466    7.456      359.34        578       68.5
70.01 - 75.00 ...............       150         35,592,838        8.90       237,286    7.600      359.24        588       73.9
75.01 - 80.00 ...............       704        170,247,308       42.56       241,829    7.164      359.15        650       79.8
80.01 - 85.00 ...............       155         36,775,635        9.19       237,262    7.660      359.21        607       84.5
85.01 - 90.00 ...............       254         50,514,393       12.63       198,876    8.089      359.15        617       89.6
90.01 - 95.00 ...............        72         11,693,254        2.92       162,406    8.477      358.63        606       94.5
95.01 - 100.00 ..............        38          5,796,303        1.45       152,534    7.929      356.95        652       99.9
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========




                                       CURRENT MORTGAGE RATES FOR THE GROUP 2 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
RANGE OF CURRENT MORTGAGE       MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
RATES (%)                         LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

4.501 - 5.000 ...............         2    $       308,500        0.08%    $ 154,250    4.966%     357.30        656       74.1%
5.001 - 5.500 ...............        15          3,807,692        0.95       253,846    5.410      358.45        641       75.7
5.501 - 6.000 ...............        92         25,406,982        6.35       276,163    5.871      358.07        641       75.4
6.001 - 6.500 ...............       159         42,271,350       10.57       265,858    6.324      358.30        639       76.8
6.501 - 7.000 ...............       335         83,600,490       20.90       249,554    6.813      359.20        640       77.6
7.001 - 7.500 ...............       310         76,566,732       19.14       246,989    7.306      359.46        637       78.7
7.501 - 8.000 ...............       270         59,709,556       14.93       221,147    7.779      359.21        611       77.6
8.001 - 8.500 ...............       165         35,710,152        8.93       216,425    8.307      359.40        591       77.3
8.501 - 9.000 ...............       198         36,868,033        9.22       186,202    8.783      359.43        579       78.6
9.001 - 9.500 ...............       100         18,146,751        4.54       181,468    9.310      359.65        564       77.9
9.501 - 10.000 ..............        56         10,055,321        2.51       179,559    9.806      359.85        558       79.1
10.001 - 10.500 .............        21          3,562,154        0.89       169,626   10.241      359.47        565       78.6
10.501 - 11.000 .............        18          2,194,850        0.55       121,936   10.737      359.96        566       86.6
11.001 - 11.500 .............         5            763,072        0.19       152,614   11.294      359.71        566       81.2
11.501 - 12.000 .............         4          1,030,276        0.26       257,569   11.746      359.65        560       91.5
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========



                                      A-11





                                   TYPES OF MORTGAGED PROPERTIES FOR THE GROUP 2 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
MORTGAGED PROPERTY TYPE           LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

Single Family Residence .....     1,218    $   274,801,949       68.70%    $ 225,617    7.498%     359.15        616       77.6%
Planned Unit Development ....       299         73,145,147       18.29       244,633    7.465      359.30        610       78.1
Two Family Home .............        92         23,722,142        5.93       257,849    7.525      358.86        648       77.9
Low-Rise Condominium ........       116         21,534,026        5.38       185,638    7.608      359.35        627       79.1
Three Family Home ...........        12          3,159,224        0.79       263,269    7.331      359.45        634       74.5
High-Rise Condominium .......         7          2,004,592        0.50       286,370    7.923      358.35        641       82.5
Four Family Home ............         6          1,634,830        0.41       272,472    7.927      357.95        652       84.3
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========




                                           LOAN PURPOSES FOR THE GROUP 2 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
LOAN PURPOSE                      LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

Refinance - Cash Out ........     1,158    $   256,503,748       64.13%    $ 221,506    7.603%     359.29        593       76.0%
Purchase ....................       555        135,408,314       33.85       243,979    7.336      358.92        666       81.1
Refinance - Rate/Term .......        37          8,089,848        2.02       218,645    7.089      359.00        617       79.4
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========




                                          OCCUPANCY TYPES FOR THE GROUP 2 MORTGAGE LOANS
                                              IN THE STATISTICAL CALCULATION POOL(1)

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
OCCUPANCY TYPE                    LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

Owner Occupied ..............     1,652    $   379,992,275       95.00%    $ 230,020    7.464%     359.18        617       77.7%
Investment Property .........        72         15,335,274        3.83       212,990    8.195      358.92        649       80.4
Second Home .................        26          4,674,361        1.17       179,783    8.312      358.08        608       78.0
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========


      ______________
      (1)   Based on representations by the Mortgagors at the time of
            origination of the related Mortgage Loans.


                                      A-12





                                 REMAINING TERMS TO STATED MATURITY FOR THE GROUP 2 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
RANGE OF REMAINING TERMS        MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
(MONTHS)                          LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

301 - 360 ...................     1,750    $   400,001,910      100.00%    $ 228,573    7.502%     359.16        618       77.8%
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========




                                      LOAN DOCUMENTATION TYPE FOR THE GROUP 2 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
LOAN DOCUMENTATION TYPE           LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

Full Documentation ..........     1,048    $   221,586,048       55.40%    $ 211,437    7.341%     359.37        607       78.7%
Stated Income ...............       702        178,415,862       44.60       254,154    7.702      358.90        632       76.6
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========




                                    CREDIT BUREAU RISK SCORES(1) FOR THE GROUP 2 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
RANGE OF CREDIT BUREAU          MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
RISK SCORES                       LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

801 - 820 ...................         2    $       611,297        0.15%    $ 305,648    6.476%     358.60        815       80.0%
781 - 800 ...................         9          3,046,969        0.76       338,552    6.781      358.36        788       80.0
761 - 780 ...................        20          6,552,458        1.64       327,623    7.289      358.14        770       82.2
741 - 760 ...................        30          9,216,094        2.30       307,203    7.105      358.44        750       82.0
721 - 740 ...................        47         12,450,102        3.11       264,896    6.953      359.03        730       81.6
701 - 720 ...................        70         20,899,738        5.22       298,568    7.208      358.67        711       80.2
681 - 700 ...................        71         18,917,550        4.73       266,444    6.930      358.89        689       81.1
661 - 680 ...................        86         23,230,598        5.81       270,123    6.836      358.62        670       79.8
641 - 660 ...................       140         34,413,600        8.60       245,811    7.079      359.25        649       80.0
621 - 640 ...................       207         49,021,067       12.26       236,817    7.301      359.08        631       80.3
601 - 620 ...................       242         51,835,906       12.96       214,198    7.295      359.36        610       79.3
581 - 600 ...................       237         49,444,695       12.36       208,627    7.606      359.30        590       77.5
561 - 580 ...................       194         39,500,832        9.88       203,613    7.874      359.48        570       77.4
541 - 560 ...................       166         35,051,359        8.76       211,153    7.999      359.36        551       73.3
521 - 540 ...................       114         22,925,711        5.73       201,103    8.376      359.43        531       71.1
501 - 520 ...................       113         22,558,186        5.64       199,630    8.614      359.32        512       68.2
500 or Less .................         2            325,750        0.08       162,875    7.398      360.00        500       68.5
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========


      ______________
      (1)   The Credit Bureau Risk Scores referenced in this table with respect
            to substantially all of the Group 2 Mortgage Loans were obtained by
            the respective originators from one or more credit reporting
            agencies, and were determined at the time of origination.


                                      A-13





                                      CREDIT GRADE CATEGORIES FOR THE GROUP 2 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
CREDIT GRADE CATEGORY             LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

A ...........................     1,208    $   288,630,650       72.16%    $ 238,933    7.321%     359.06        634       79.2%
A- ..........................        77         18,237,953        4.56       236,857    7.952      359.09        586       74.4
B ...........................       139         30,041,985        7.51       216,129    7.799      359.46        563       71.7
C ...........................       166         33,134,959        8.28       199,608    8.123      359.58        575       74.7
C- ..........................       133         24,780,982        6.20       186,323    7.917      359.38        593       77.7
D ...........................        27          5,175,382        1.29       191,681    8.314      359.72        557       65.2
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========




                                     PREPAYMENT PENALTY PERIOD FOR THE GROUP 2 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
PREPAYMENT PENALTY PERIOD       MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
(MONTHS)                          LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

0 ...........................       373    $    84,139,017       21.03%    $ 225,574    7.950%     359.10        610       77.2%
6 ...........................         1            132,000        0.03       132,000    8.425      359.00        526       80.0
12 ..........................        71         17,510,725        4.38       246,630    7.877      358.92        633       76.9
13 ..........................         1            350,000        0.09       350,000    7.500      359.00        546       61.4
24 ..........................       635        152,899,239       38.22       240,786    7.394      359.13        621       77.6
30 ..........................         2            406,300        0.10       203,150    7.702      359.00        610       77.3
36 ..........................       666        144,431,430       36.11       216,864    7.308      359.26        618       78.4
60 ..........................         1            133,200        0.03       133,200    8.950      360.00        627       90.0
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========




                              RANGE OF MONTHS TO NEXT ADJUSTMENT DATE FOR THE GROUP 2 MORTGAGE LOANS
                                                IN THE STATISTICAL CALCULATION POOL

                             WEIGHTED
                             AVERAGE                              PERCENT OF              WEIGHTED  WEIGHTED    WEIGHTED   WEIGHTED
                            MONTHS TO                AGGREGATE     AGGREGATE    AVERAGE   AVERAGE    AVERAGE    AVERAGE    AVERAGE
RANGE OF MONTHS TO             NEXT     NUMBER OF    PRINCIPAL     PRINCIPAL    CURRENT   CURRENT   REMAINING    CREDIT    LOAN-TO-
NEXT ADJUSTMENT             ADJUSTMENT  MORTGAGE      BALANCE       BALANCE    PRINCIPAL  MORTGAGE    TERM       BUREAU     VALUE
DATE                           DATE       LOANS     OUTSTANDING   OUTSTANDING   BALANCE     RATE    (MONTHS)   RISK SCORE   RATIO
--------------------------  ----------  ---------  -------------  -----------  ---------  --------  ---------  ----------  --------

0 - 6.....................       6           13    $   2,636,050      0.66%    $ 202,773   7.335%     360.00      576        81.0%
13 - 18...................      17           13        3,114,212      0.78       239,555   6.346      353.42      694        83.4
19 - 24...................      23          671      160,025,540     40.01       238,488   7.494      359.26      620        77.6
25 - 31...................      31           88       20,495,143      5.12       232,899   6.890      354.69      662        80.1
32 - 37...................      36          964      213,486,221     53.37       221,459   7.588      359.59      612        77.6
38 or Greater.............      58            1          244,744      0.06       244,744   5.750      358.00      670        70.0
                                        ---------  -------------  -----------
    Total/Avg./Wtd. Avg...                1,750    $ 400,001,910    100.00%
                                        =========  =============  ===========



                                      A-14





                                           GROSS MARGINS FOR THE GROUP 2 MORTGAGE LOANS
                                              IN THE STATISTICAL CALCULATION POOL(1)

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
RANGE OF GROSS MARGINS (%)        LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

3.001 - 4.000 ...............         2    $       378,500        0.09%    $ 189,250    6.334%     360.00        589       67.4%
4.001 - 5.000 ...............        53         11,780,933        2.95       222,282    6.540      359.89        595       71.9
5.001 - 6.000 ...............       479        117,189,506       29.30       244,655    6.849      359.38        626       76.8
6.001 - 7.000 ...............       652        158,329,864       39.58       242,837    7.397      359.07        630       78.7
7.001 - 8.000 ...............       368         77,059,760       19.26       209,402    8.185      359.04        603       76.4
8.001 - 9.000 ...............       169         30,828,594        7.71       182,418    8.851      358.86        579       81.0
9.001 - 10.000 ..............        25          4,074,828        1.02       162,993    9.853      359.04        580       86.0
10.001 - 11.000 .............         2            359,926        0.09       179,963   10.701      358.55        612       83.6
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========


      ______________
      (1)   The weighted average Gross Margin for the Group 2 Mortgage Loans in
            the Statistical Calculation Pool as of the Cut-off Date was
            approximately 6.621%.



                                       MAXIMUM MORTGAGE RATES FOR THE GROUP 2 MORTGAGE LOANS
                                              IN THE STATISTICAL CALCULATION POOL(1)

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
RANGE OF MAXIMUM                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
MORTGAGE RATES (%)                LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

11.001 - 11.500 .............         1    $       192,000        0.05%    $ 192,000    5.500%     359.00        653       80.0%
11.501 - 12.000 .............         9          2,262,159        0.57       251,351    5.718      357.90        661       77.1
12.001 - 12.500 .............        27          6,740,411        1.69       249,645    5.845      358.11        640       75.6
12.501 - 13.000 .............       120         31,668,805        7.92       263,907    6.117      358.21        640       75.3
13.001 - 13.500 .............       184         48,817,286       12.20       265,311    6.511      358.42        640       76.8
13.501 - 14.000 .............       336         84,052,620       21.01       250,157    6.921      359.25        636       77.5
14.001 - 14.500 .............       297         72,966,360       18.24       245,678    7.386      359.51        633       79.0
14.501 - 15.000 .............       266         57,146,984       14.29       214,838    7.884      359.23        606       77.7
15.001 - 15.500 .............       159         33,530,619        8.38       210,884    8.418      359.47        588       76.9
15.501 - 16.000 .............       167         30,685,135        7.67       183,743    8.789      359.50        582       79.1
16.001 - 16.500 .............        85         15,318,860        3.83       180,222    9.345      359.69        564       78.2
16.501 - 17.000 .............        53          9,455,321        2.36       178,402    9.803      359.88        558       79.3
17.001 - 17.500 .............        19          3,177,154        0.79       167,219   10.258      359.47        571       80.8
17.501 - 18.000 .............        18          2,194,850        0.55       121,936   10.737      359.96        566       86.6
18.001 - 18.500 .............         5            763,072        0.19       152,614   11.294      359.71        566       81.2
18.501 - 19.000 .............         4          1,030,276        0.26       257,569   11.746      359.65        560       91.5
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========


      ______________
      (1)   The weighted average Maximum Mortgage Rate for the Group 2 Mortgage
            Loans in the Statistical Calculation Pool as of the Cut-off Date was
            approximately 14.381%.


                                      A-15





                                     INITIAL PERIODIC RATE CAP FOR THE GROUP 2 MORTGAGE LOANS
                                              IN THE STATISTICAL CALCULATION POOL(1)

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
INITIAL PERIODIC RATE CAP (%)     LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

1.000 .......................        21    $     4,197,966        1.05%    $ 199,903    7.522%     359.75        576       81.1%
1.500 .......................     1,445        330,370,022       82.59       228,630    7.477      359.24        619       78.1
2.000 .......................        20          4,889,183        1.22       244,459    7.191      358.70        649       77.4
3.000 .......................       264         60,544,739       15.14       229,336    7.663      358.73        610       76.0
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========


      ______________
      (1)   The weighted average Initial Periodic Rate Cap for the Group 2
            Mortgage Loans in the Statistical Calculation Pool as of the Cut-off
            Date was approximately 1.728%.



                                    SUBSEQUENT PERIODIC RATE CAP FOR THE GROUP 2 MORTGAGE LOANS
                                              IN THE STATISTICAL CALCULATION POOL(1)

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
SUBSEQUENT PERIODIC RATE        MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
CAP (%)                           LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

1.000 .......................       260    $    59,265,864       14.82%    $ 227,946    7.649%     358.80        612       76.8%
1.500 .......................     1,488        340,293,299       85.07       228,692    7.476      359.22        619       78.0
2.000 .......................         2            442,748        0.11       221,374    8.082      357.98        562       72.5
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========


      ______________
      (1)   The weighted average Subsequent Periodic Rate Cap for the Group 2
            Mortgage Loans in the Statistical Calculation Pool as of the Cut-off
            Date was approximately 1.426%.


                                      A-16





                                       MINIMUM MORTGAGE RATES FOR THE GROUP 2 MORTGAGE LOANS
                                              IN THE STATISTICAL CALCULATION POOL(1)

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
RANGE OF MINIMUM                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
MORTGAGE RATES (%)                LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

4.001 - 5.000 ...............         2    $       308,500        0.08%    $ 154,250    4.966%     357.30        656       74.1%
5.001 - 6.000 ...............       115         31,224,652        7.81       271,519    5.870      358.13        641       75.5
6.001 - 7.000 ...............       494        126,105,890       31.53       255,275    6.664      358.92        640       77.3
7.001 - 8.000 ...............       577        135,105,651       33.78       234,152    7.522      359.34        624       78.2
8.001 - 9.000 ...............       360         71,840,793       17.96       199,558    8.550      359.44        585       78.0
9.001 - 10.000 ..............       154         27,866,071        6.97       180,949    9.487      359.72        562       78.4
Greater than 10.000 .........        48          7,550,353        1.89       157,299   10.697      359.66        565       82.9
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========


      ______________
      (1)   The weighted average Minimum Mortgage Rate for the Group 2 Mortgage
            Loans in the Statistical Calculation Pool as of the Cut-off Date was
            approximately 7.488%.



                                        NEXT ADJUSTMENT DATE FOR THE GROUP 2 MORTGAGE LOANS
                                              IN THE STATISTICAL CALCULATION POOL(1)

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
                                MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
NEXT ADJUSTMENT DATE              LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

July 2006 ...................        13    $     2,636,050        0.66%    $ 202,773    7.335%     360.00        576       81.0%
March 2007 ..................         1            380,000        0.09       380,000    5.750      350.00        751       80.0
May 2007 ....................         1            140,732        0.04       140,732    6.750      352.00        749       80.0
July 2007 ...................        11          2,593,480        0.65       235,771    6.411      354.00        683       84.1
August 2007 .................        35          8,886,956        2.22       253,913    7.101      355.00        617       79.1
September 2007 ..............        30          7,566,164        1.89       252,205    7.293      356.00        621       85.3
October 2007 ................        10          2,738,903        0.68       273,890    6.937      357.13        632       73.7
November 2007 ...............        22          5,597,544        1.40       254,434    7.366      358.04        623       78.4
December 2007 ...............       108         25,465,801        6.37       235,794    7.391      359.02        616       75.7
January 2008 ................       465        109,585,173       27.40       235,667    7.582      360.00        620       77.5
February 2008 ...............         1            185,000        0.05       185,000    8.875      360.00        545       44.0
June 2008 ...................         3            746,750        0.19       248,917    7.721      353.00        651       81.3
July 2008 ...................        20          4,808,996        1.20       240,450    6.613      354.00        655       79.8
August 2008 .................        65         14,939,397        3.73       229,837    6.937      355.00        664       80.2
September 2008 ..............        47         10,987,986        2.75       233,787    6.796      356.00        626       79.3
October 2008 ................        11          2,273,571        0.57       206,688    7.388      357.12        657       83.8
November 2008 ...............        23          4,848,422        1.21       210,801    7.474      358.08        604       77.4
December 2008 ...............       128         28,079,977        7.02       219,375    7.726      359.02        610       76.9
January 2009 ................       753        166,989,765       41.75       221,766    7.623      360.00        611       77.5
February 2009 ...............         2            306,500        0.08       153,250    7.582      360.00        565       91.6
November 2010 ...............         1            244,744        0.06       244,744    5.750      358.00        670       70.0
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========


      ______________
      (1)   The weighted average Next Adjustment Date for the Group 2 Mortgage
            Loans in the Statistical Calculation Pool as of the Cut-off Date is
            July 2008.


                                      A-17





                                       INTEREST ONLY PERIOD FOR THE GROUP 2 MORTGAGE LOANS
                                               IN THE STATISTICAL CALCULATION POOL

                                                                                                              WEIGHTED
                                                              PERCENT OF               WEIGHTED   WEIGHTED    AVERAGE    WEIGHTED
                                              AGGREGATE        AGGREGATE    AVERAGE    AVERAGE     AVERAGE     CREDIT    AVERAGE
                                NUMBER OF     PRINCIPAL        PRINCIPAL    CURRENT    CURRENT    REMAINING    BUREAU    LOAN-TO-
INTEREST ONLY PERIOD            MORTGAGE       BALANCE          BALANCE    PRINCIPAL   MORTGAGE     TERM        RISK      VALUE
(MONTHS)                          LOANS      OUTSTANDING      OUTSTANDING   BALANCE      RATE     (MONTHS)     SCORE      RATIO
-----------------------------   ---------  ---------------    -----------  ---------   --------   ---------   --------   --------

0 ...........................     1,195    $   248,126,675       62.03%    $ 207,637    7.754%     359.10        599       76.6%
24 ..........................       187         54,659,313       13.66       292,296    7.137      359.43        658       80.7
36 ..........................       282         74,828,610       18.71       265,350    7.060      359.32        643       79.5
60 ..........................        86         22,387,312        5.60       260,318    7.079      358.68        647       77.6
                                ---------  ---------------    -----------
    Total/Avg./Wtd. Avg......     1,750    $   400,001,910      100.00%
                                =========  ===============    ===========



                                      A-18



                                                                         ANNEX I

                      GLOBAL CLEARANCE, SETTLEMENT AND TAX
                            DOCUMENTATION PROCEDURES

      Except in certain limited circumstances, the globally offered CWABS, Inc.
Asset-Backed Certificates, Series 2006-1, (the "GLOBAL SECURITIES") will be
available only in book-entry form. Investors in the Global Securities may hold
the Global Securities through any of DTC, Clearstream, Luxembourg or Euroclear.
The Global Securities will be tradable as home market instruments in both the
European and U.S. domestic markets. Initial settlement and all secondary trades
will settle in same-day funds.

      Secondary market trading between investors holding Global Securities
through Clearstream, Luxembourg and Euroclear will be conducted in the ordinary
way in accordance with their normal rules and operating procedures and in
accordance with conventional Eurobond practice (i.e., seven calendar day
settlement).

      Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures applicable
to U.S. corporate debt obligations and prior mortgage pass-through certificate
issues.

      Secondary cross-market trading between Clearstream, Luxembourg or
Euroclear and DTC Participants holding Certificates will be effected on a
delivery-against-payment basis through the respective Depositaries of
Clearstream, Luxembourg and Euroclear (in such capacity) and as DTC
Participants.

      Non-U.S. holders (as described below) of Global Securities will be subject
to U.S. withholding taxes unless the holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing organizations
or their participants.

INITIAL SETTLEMENT

      All Global Securities will be held in book-entry form by DTC in the name
of Cede & Co. as nominee of DTC. Investors' interests in the Global Securities
will be represented through financial institutions acting on their behalf as
direct and indirect Participants in DTC. As a result, Clearstream, Luxembourg
and Euroclear will hold positions on behalf of their participants through their
respective Depositaries, which in turn will hold the positions in accounts as
DTC Participants.

      Investors electing to hold their Global Securities through DTC will follow
the settlement practices applicable to prior mortgage pass-through certificate
issues. Investor securities custody accounts will be credited with their
holdings against payment in same-day funds on the settlement date.

      Investors electing to hold their Global Securities through Clearstream,
Luxembourg or Euroclear accounts will follow the settlement procedures
applicable to conventional Eurobonds, except that there will be no temporary
global security and no "LOCK-UP" or restricted period. Global Securities will be
credited to the securities custody accounts on the settlement date against
payment in same-day funds.

SECONDARY MARKET TRADING

      Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.

      Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to prior mortgage
pass-through certificate issues in same-day funds.


                                       I-1



      Trading between Clearstream, Luxembourg and/or Euroclear Participants.
Secondary market trading between Clearstream, Luxembourg Participants or
Euroclear Participants will be settled using the procedures applicable to
conventional Eurobonds in same-day funds.

      Trading between DTC Seller and Clearstream, Luxembourg or Euroclear
Purchaser. When Global Securities are to be transferred from the account of a
DTC Participant to the account of a Clearstream, Luxembourg Participant or a
Euroclear Participant, the purchaser will send instructions to Clearstream,
Luxembourg or Euroclear through a Clearstream, Luxembourg Participant or
Euroclear Participant at least one Business Day prior to settlement.
Clearstream, Luxembourg or Euroclear will instruct the respective Depositary, as
the case may be, to receive the Global Securities against payment. Payment will
include interest accrued on the Global Securities from and including the last
coupon payment date to and excluding the settlement date, on the basis of a
360-day year and either the actual number of days in the related accrual period
or a year consisting of twelve 30-day months, as applicable. For transactions
settling on the 31st of the month, payment will include interest accrued to and
excluding the first day of the following month. Payment will then be made by the
respective Depositary of the DTC Participant's account against delivery of the
Global Securities. After settlement has been completed, the Global Securities
will be credited to the respective clearing system and by the clearing system,
in accordance with its usual procedures, to the Clearstream, Luxembourg
Participant's or Euroclear Participant's account. The securities credit will
appear the next day (European time) and the cash debt will be back-valued to,
and the interest on the Global Securities will accrue from, the value date
(which would be the preceding day when settlement occurred in New York). If
settlement is not completed on the intended value date (i.e., the trade fails),
the Clearstream, Luxembourg or Euroclear cash debt will be valued instead as of
the actual settlement date.

      Clearstream, Luxembourg Participants and Euroclear Participants will need
to make available to the respective clearing systems the funds necessary to
process same-day funds settlement. The most direct means of doing so is to
preposition funds for settlement, either from cash on hand or existing lines of
credit, as they would for any settlement occurring within Clearstream,
Luxembourg or Euroclear. Under this approach, they may take on credit exposure
to Clearstream, Luxembourg or Euroclear until the Global Securities are credited
to their accounts one day later.

      As an alternative, if Clearstream, Luxembourg or Euroclear has extended a
line of credit to them, Clearstream, Luxembourg Participants or Euroclear
Participants can elect not to preposition funds and allow that credit line to be
drawn upon the finance settlement. Under this procedure, Clearstream, Luxembourg
Participants or Euroclear Participants purchasing Global Securities would incur
overdraft charges for one day, assuming they cleared the overdraft when the
Global Securities were credited to their accounts. However, interest on the
Global Securities would accrue from the value date. Therefore, in many cases the
investment income on the Global Securities earned during that one-day period may
substantially reduce or offset the amount of the overdraft charges, although
this result will depend on each Clearstream, Luxembourg Participant's or
Euroclear Participant's particular cost of funds.

      Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities to
the respective European Depositary for the benefit of Clearstream, Luxembourg
Participants or Euroclear Participants. The sale proceeds will be available to
the DTC seller on the settlement date. Thus, to the DTC Participants a
cross-market transaction will settle no differently than a trade between two DTC
Participants.

      Trading between Clearstream, Luxembourg or Euroclear Seller and DTC
Purchaser. Due to time zone differences in their favor, Clearstream, Luxembourg
Participants and Euroclear Participants may employ their customary procedures
for transactions in which Global Securities are to be transferred by the
respective clearing system, through the respective Depositary, to a DTC
Participant. The seller will send instructions to Clearstream, Luxembourg or
Euroclear through a Clearstream, Luxembourg Participant or Euroclear Participant
at least one Business Day prior to settlement. In these cases Clearstream,
Luxembourg or Euroclear will instruct the respective Depositary, as appropriate,
to deliver the Global Securities to the DTC Participant's account against
payment. Payment will include interest accrued on the Global Securities from and
including the last coupon payment to and excluding the settlement date on the
basis of a 360-day year and either the actual number of days in the related
accrual period or a year consisting of twelve 30-day months, as applicable. For
transactions settling on the 31st of the month, payment will include interest
accrued to and excluding the first day of the following month. The payment


                                       I-2



will then be reflected in the account of the Clearstream, Luxembourg
Participant or Euroclear Participant the following day, and receipt of the cash
proceeds in the Clearstream, Luxembourg Participant's or Euroclear Participant's
account would be back-valued to the value date (which would be the preceding
day, when settlement occurred in New York). Should the Clearstream, Luxembourg
Participant or Euroclear Participant have a line of credit with its respective
clearing system and elect to be in debt in anticipation of receipt of the sale
proceeds in its account, the back-valuation will extinguish any overdraft
incurred over that one-day period. If settlement is not completed on the
intended value date (i.e., the trade fails), receipt of the cash proceeds in the
Clearstream, Luxembourg Participant's or Euroclear Participant's account would
instead be valued as of the actual settlement date.

      Finally, day traders that use Clearstream, Luxembourg or Euroclear and
that purchase Global Securities from DTC Participants for delivery to
Clearstream, Luxembourg Participants or Euroclear Participants should note that
these trades would automatically fail on the sale side unless affirmative action
were taken. At least three techniques should be readily available to eliminate
this potential problem:

            (a)   borrowing through Clearstream, Luxembourg or Euroclear for one
      day (until the purchase side of the day trade is reflected in their
      Clearstream, Luxembourg or Euroclear accounts) in accordance with the
      clearing system's customary procedures;

            (b)   borrowing the Global Securities in the U.S. from a DTC
      Participant no later than one day prior to settlement, which would give
      the Global Securities sufficient time to be reflected in their
      Clearstream, Luxembourg or Euroclear account in order to settle the sale
      side of the trade; or

            (c)   staggering the value dates for the buy and sell sides of the
      trade so that the value date for the purchase from the DTC Participant is
      at least one day prior to the value date for the sale to the Clearstream,
      Luxembourg Participant or Euroclear Participant.

CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS

      A beneficial owner of Global Securities holding securities through
Clearstream, Luxembourg or Euroclear (or through DTC if the holder has an
address outside the U.S.) will be subject to the 30% U.S. withholding tax that
generally applies to payments of interest (including original issue discount) on
registered debt issued by U.S. Persons, unless (i) each clearing system, bank or
other financial institution that holds customers' securities in the ordinary
course of its trade or business in the chain of intermediaries between the
beneficial owner and the U.S. entity required to withhold tax complies with
applicable certification requirements and (ii) the beneficial owner takes one of
the following steps to obtain an exemption or reduced tax rate:

      Exemption for non-U.S. Persons or Reduced Rate for non-U.S. Persons
Resident in Treaty Countries (Form W-8BEN). In general, beneficial owners of
Global Securities that are non-U.S. Persons can obtain a complete exemption from
the withholding tax by filing a signed Form W-8BEN Certificate of Foreign Status
of Beneficial Owners for United States Tax Withholding. Non-U.S. Persons that
are Certificate Owners residing in a country that has a tax treaty with the
United States also can obtain an exemption or reduced tax rate (depending on the
treaty terms) by filing Form W-8BEN (Certificate of Foreign Status of Beneficial
Owners for United States Tax Withholding). If the information shown on Form
W-8BEN changes, a new Form W-8BEN must be filed within 30 days of the change.
More complex rules apply if Global Securities are held through a non-U.S.
intermediary (which includes an agent, nominee, custodian, or other person who
holds a Global Security for the account of another) or a non-U.S. flow-through
entity (which includes a partnership, trust, and certain fiscally transparent
entities).

      Exemption for non-U.S. Persons with Effectively Connected Income (Form
W-8ECI). In general, a non-U.S. Person, including a non-U.S. corporation or bank
with a U.S. branch, for which the interest income is effectively connected with
its conduct of a trade or business in the United States, can obtain an exemption
from the withholding tax by filing Form W-8ECI (Certificate of Foreign Person's
Claim for Exemption from Withholding On Income Effectively Connected with the
Conduct of a Trade or Business in the United States). More complex rules apply
where Global Securities are held through a Non-U.S. intermediary or Non-U.S.
flow through entity.


                                       I-3



      Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a complete
exemption from the withholding tax by filing Form W-9 (Payer's Request for
Taxpayer Identification Number and Certification).

      U.S. Federal Income Tax Reporting Procedure. The Certificate Owner of a
Global Security, files by submitting the appropriate form to the person through
whom it holds (the clearing agency, in the case of persons holding directly on
the books of the clearing agency). Generally, a Form W-8BEN and a Form W-8ECI
will remain in effect for a period starting on the date the form is signed and
ending on the last day of the third succeeding calendar year unless a change in
circumstances makes any information of the form incorrect. In addition, a Form
W-8BEN furnished with a U.S. taxpayer identification number will remain in
effect until a change in circumstances makes any information of the form
incorrect, provided that the withholding agent reports on Form 1042 at least one
payment annually to the beneficial owner who provided the form.

      The term "U.S. PERSON" means:

            (1)   a citizen or resident of the United States,

            (2)   a corporation or partnership (including an entity treated as a
      corporation or partnership for U.S. federal income tax purposes) organized
      in or under the laws of the United States, any State thereof or the
      District of Columbia,

            (3)   an estate the income of which is includible in gross income
      for United States tax purposes, regardless of its source,

            (4)   a trust if a court within the United States is able to
      exercise primary supervision of the administration of the trust and one or
      more United States persons have the authority to control all substantial
      decisions of the trust. This summary does not deal with all aspects of
      U.S. Federal income tax withholding that may be relevant to foreign
      holders of the Global Securities. Investors are advised to consult their
      tax advisors for specific tax advice concerning their holding and
      disposing of the Global Securities, or

            (5)   certain eligible trusts that elect to be taxed as U.S.
      persons.


                                       I-4



                                  $756,643,100
                                  (APPROXIMATE)


                    ASSET-BACKED CERTIFICATES, SERIES 2006-1


                  CWABS ASSET-BACKED CERTIFICATES TRUST 2006-1
                                 ISSUING ENTITY


                                   CWABS, INC.
                                    DEPOSITOR

                           [COUNTRYWIDE LOGO OMITTED]
                              ------------------
                                   HOME LOANS
                               SPONSOR AND SELLER

                       COUNTRYWIDE HOME LOANS SERVICING LP
                                 MASTER SERVICER

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

                              PROSPECTUS SUPPLEMENT

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

COUNTRYWIDE SECURITIES CORPORATION

                                                                 LEHMAN BROTHERS

      You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We have
not authorized anyone to provide you with different information.

      We are not offering the Series 2006-1 Asset-Backed Certificates in any
state where the offer is not permitted.

      Dealers will deliver a prospectus supplement and prospectus when acting as
underwriters of the Series 2006-1 Asset-Backed Certificates and with respect to
their unsold allotments or subscriptions. In addition, all dealers selling the
Series 2006-1 Asset-Backed Certificates will be required to deliver a prospectus
supplement and prospectus for 90 days after the date of the prospectus
supplement.


                                February 8, 2006

                                                                      PROSPECTUS

                                   CWABS, INC.
                                    DEPOSITOR

                             ASSET BACKED SECURITIES
                              (ISSUABLE IN SERIES)

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

PLEASE CAREFULLY CONSIDER OUR DISCUSSION OF SOME OF THE RISKS OF INVESTING IN
THE SECURITIES UNDER "RISK FACTORS" BEGINNING ON PAGE 2.

The securities will represent obligations of the related trust fund only and
will not represent an interest in or obligation of CWABS, Inc., any seller,
servicer, or any of their affiliates.

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

THE TRUSTS

Each trust will be established to hold assets in its trust fund transferred to
it by CWABS, Inc. The assets in each trust fund will be specified in the
prospectus supplement for the particular trust and will generally consist of:

o    first or subordinate lien mortgage loans secured by one- to four-family
     residential properties;

o    mortgage loans secured by first and/or subordinate liens on small
     multifamily residential properties, such as rental apartment buildings or
     projects containing five to fifty residential units;

o    closed-end and/or revolving home equity loans, secured in whole or in part
     by first and/or subordinate liens on one- to four-family residential
     properties; or

o    home improvement loans, secured by first or subordinate liens on one- to
     four-family residential properties or by personal property security
     interests, and home improvement sales contracts, secured by personal
     property security interests.

THE SECURITIES

CWABS, Inc. will sell either certificates or notes pursuant to a prospectus
supplement. The securities will be grouped into one or more series, each having
its own distinct designation. Each series will be issued in one or more classes
and each class will evidence beneficial ownership of (in the case of
certificates) or a right to receive payments supported by (in the case of notes)
a specified portion of future payments on the assets in the trust fund that the
series relates to. A prospectus supplement for a series will specify all of the
terms of the series and of each of the classes in the series.

CREDIT ENHANCEMENT

If the securities have any type of credit enhancement, the prospectus supplement
for the related series will describe the credit enhancement. The types of credit
enhancement are generally described in this prospectus.

OFFERS OF SECURITIES

The securities may be offered through several different methods, including
offerings through underwriters.

                                   ----------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

January 26, 2006



                                TABLE OF CONTENTS



Important Notice About Information in This Prospectus and Each Accompanying Prospectus Supplement..........     1
Risk Factors...............................................................................................     2
   Limited Source Of Payments -- No Recourse To Sellers, Depositor Or Servicer.............................     2
   Credit Enhancement May Not Be Sufficient To Protect You From Losses.....................................     3
   Nature Of Mortgages.....................................................................................     3
   Your Risk Of Loss May Be Higher Than You Expect If Your Securities Are Backed By Multifamily Loans......     8
   Impact Of World Events..................................................................................     9
   Your Risk Of Loss May Be Higher Than You Expect If Your Securities Are Backed By Partially
      Unsecured Home Equity Loans..........................................................................     9
   You Could Be Adversely Affected By Violations Of Environmental Laws.....................................     9
   Ratings Of The Securities Do Not Assure Their Payment...................................................    10
   Book-Entry Registration.................................................................................    11
   Secondary Market For The Securities May Not Exist.......................................................    11
   Bankruptcy Or Insolvency May Affect The Timing And Amount Of Distributions On The Securities............    11
   The Principal Amount Of Securities May Exceed The Market Value Of The Trust Fund Assets.................    12
The Trust Fund.............................................................................................    14
   General.................................................................................................    14
   The Loans...............................................................................................    15
   Substitution of Trust Fund Assets.......................................................................    19
   Available Information...................................................................................    19
   Incorporation of Certain Documents by Reference; Reports Filed with the SEC.............................    19
   Reports to Securityholders..............................................................................    20
Use of Proceeds............................................................................................    20
The Depositor..............................................................................................    20
Loan Program...............................................................................................    21
   Underwriting Standards..................................................................................    21
   Qualifications of Sellers...............................................................................    22
   Representations by Sellers; Repurchases.................................................................    22
Static Pool Data...........................................................................................    24
Description of the Securities..............................................................................    24
   General.................................................................................................    24
   Distributions on Securities.............................................................................    26
   Advances................................................................................................    28
   Reports to Securityholders..............................................................................    29
   Categories of Classes of Securities.....................................................................    30
   Indices Applicable to Floating Rate and Inverse Floating Rate Classes...................................    32
   Book-Entry Registration of Securities...................................................................    35
Credit Enhancement.........................................................................................    39
   General.................................................................................................    39
   Subordination...........................................................................................    40
   Letter of Credit........................................................................................    41
   Insurance Policies, Surety Bonds and Guaranties.........................................................    41
   Overcollateralization and Excess Cash Flow..............................................................    42
   Reserve Accounts........................................................................................    42
   Pool Insurance Policies.................................................................................    42
   Financial Instruments...................................................................................    43
   Cross Support...........................................................................................    44
Yield, Maturity and Prepayment Considerations..............................................................    44
   Prepayments on Loans....................................................................................    44
   Prepayment Effect on Interest...........................................................................    46
   Delays in Realization on Property; Expenses of Realization..............................................    46
   Optional Purchase.......................................................................................    47
   Prepayment Standards or Models..........................................................................    47
   Yield...................................................................................................    47
The Agreements.............................................................................................    47
   Assignment of the Trust Fund Assets.....................................................................    47
   Payments On Loans; Deposits to Security Account.........................................................    49
   Pre-Funding Account.....................................................................................    52
   Investments in Amounts Held in Accounts.................................................................    52
   Sub-Servicing by Sellers................................................................................    54
   Collection Procedures...................................................................................    54
   Hazard Insurance........................................................................................    55
   Application of Liquidation Proceeds.....................................................................    57
   Realization Upon Defaulted Loans........................................................................    57
   Servicing and Other Compensation and Payment of Expenses................................................    59
   Evidence as to Compliance...............................................................................    60
   Certain Matters Regarding the Master Servicer and the Depositor.........................................    61
   Events of Default; Rights Upon Event of Default.........................................................    61
   Amendment...............................................................................................    64
   Termination; Optional Termination.......................................................................    65
   The Trustee.............................................................................................    66
Certain Legal Aspects of the Loans.........................................................................    66
   General.................................................................................................    66
   Foreclosure.............................................................................................    67
   Environmental Risks.....................................................................................    69
   Rights of Redemption....................................................................................    70
   Anti-Deficiency Legislation and Other Limitations On Lenders............................................    71
   Due-On-Sale Clauses.....................................................................................    72



                                        i





   Enforceability of Prepayment and Late Payment Fees......................................................    72
   Applicability of Usury Laws.............................................................................    72
   Home Improvement Finance................................................................................    73
   Servicemembers Civil Relief Act.........................................................................    74
   Junior Mortgages and Rights of Senior Mortgagees........................................................    74
   Other Loan Provisions and Lender Requirements...........................................................    74
   Priority of Additional Advances.........................................................................    75
   The Title I Program.....................................................................................    75
   Consumer Protection Laws................................................................................    78
Material Federal Income Tax Consequences...................................................................    79
   General.................................................................................................    79
   Taxation of Debt Securities.............................................................................    80
   Taxation of the REMIC and Its Holders...................................................................    84
   REMIC Expenses; Single Class REMICs.....................................................................    84
   Taxation of the REMIC...................................................................................    85
   Taxation of Holders of Residual Interests...............................................................    86
   Administrative Matters..................................................................................    90
   Tax Status as a Grantor Trust...........................................................................    90
   Sale or Exchange........................................................................................    92
   Miscellaneous Tax Aspects...............................................................................    93
   Proposed Reporting Regulations..........................................................................    93
   Tax Treatment of Foreign Investors......................................................................    93
   Tax Characterization of the Trust Fund as a Partnership.................................................    94
   Tax Consequences to Holders of the Notes................................................................    94
   Tax Consequences to Holders of the Certificates.........................................................    96
Other Tax Considerations...................................................................................   100
ERISA Considerations.......................................................................................   100
Legal Investment...........................................................................................   103
Method of Distribution.....................................................................................   104
Legal Matters..............................................................................................   105
Financial Information......................................................................................   105
Rating.....................................................................................................   105
Index to Defined Terms.....................................................................................   107



                                       ii



         IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS AND EACH
                       ACCOMPANYING PROSPECTUS SUPPLEMENT

     Information about each series of securities is contained in two separate
     documents:

o    this prospectus, which provides general information, some of which may not
     apply to a particular series; and

o    the accompanying prospectus supplement for a particular series, which
     describes the specific terms of the securities of that series.

     The prospectus supplement will contain information about a particular
series that supplements the information contained in this prospectus, and you
should rely on that supplementary information in the prospectus supplement.

     You should rely only on the information in this prospectus and the
accompanying prospectus supplement. We have not authorized anyone to provide you
with information that is different from that contained in this prospectus and
the accompanying prospectus supplement.

                                   ----------

     If you require additional information, the mailing address of our principal
executive offices is CWABS, Inc., 4500 Park Granada, Calabasas, California 91302
and the telephone number is (818) 225-3000. For other means of acquiring
additional information about us or a series of securities, see "The Trust Fund
-- Available Information" and "-- Incorporation of Certain Documents by
Reference; Reports Filed with the SEC" beginning on page 25.


                                        1



                                  RISK FACTORS

     You should carefully consider the following information since it identifies
significant risks associated with an investment in the securities.

LIMITED SOURCE OF PAYMENTS --    The applicable prospectus supplement may
NO RECOURSE TO SELLERS,          provide that securities will be payable from
DEPOSITOR OR SERVICER            other trust funds in addition to their
                                 associated trust fund, but if it does not, they
                                 will be payable solely from their associated
                                 trust fund. If the trust fund does not have
                                 sufficient assets to distribute the full amount
                                 due to you as a securityholder, your yield will
                                 be impaired, and perhaps even the return of
                                 your principal may be impaired, without your
                                 having recourse to anyone else. Furthermore, at
                                 the times specified in the applicable
                                 prospectus supplement, certain assets of the
                                 trust fund may be released and paid out to
                                 other people, such as the depositor, a
                                 servicer, a credit enhancement provider, or any
                                 other person entitled to payments from the
                                 trust fund. Those assets will no longer be
                                 available to make payments to you. Those
                                 payments are generally made after other
                                 specified payments that may be set forth in the
                                 applicable prospectus supplement have been
                                 made.

                                 You will not have any recourse against the
                                 depositor or any servicer if you do not receive
                                 a required distribution on the securities. Nor
                                 will you have recourse against the assets of
                                 the trust fund of any other series of
                                 securities.

                                 The securities will not represent an interest
                                 in the depositor, any servicer, any seller to
                                 the depositor, or anyone else except the trust
                                 fund. The only obligation of the depositor to a
                                 trust fund comes from certain representations
                                 and warranties made by it about assets
                                 transferred to the trust fund. If these
                                 representations and warranties turn out to be
                                 untrue, the depositor may be required to
                                 repurchase some of the transferred assets.
                                 CWABS, Inc., which is the depositor, does not
                                 have significant assets and is unlikely to have
                                 significant assets in the future. So if the
                                 depositor were required to repurchase a loan
                                 because of a breach of a representation, its
                                 only sources of funds for the repurchase would
                                 be:

                                 o    funds obtained from enforcing a
                                      corresponding obligation of a seller or
                                      originator of the loan, or

                                 o    funds from a reserve fund or similar
                                      credit enhancement established to pay for
                                      loan repurchases.

                                 The only obligations of the master servicer to
                                 a trust fund (other than its master servicing
                                 obligations) comes from certain representations
                                 and warranties made by it in connection with
                                 its loan servicing activities. If these
                                 representations and warranties turn out to be
                                 untrue, the master servicer may be required to
                                 repurchase or substitute for some of the loans.
                                 However, the master servicer may not have the
                                 financial ability to make the required
                                 repurchase or substitution.

                                 The only obligations to a trust fund of a
                                 seller of loans to the depositor comes from
                                 certain representations and warranties made by
                                 it in connection with its sale of the loans and
                                 certain document delivery requirements. If
                                 these representations and warranties turn out
                                 to be untrue, or the seller fails to deliver
                                 required documents, it may be


                                        2



                                 required to repurchase or substitute for some
                                 of the loans. However, the seller may not have
                                 the financial ability to make the required
                                 repurchase or substitution.

CREDIT ENHANCEMENT MAY NOT       Credit enhancement is intended to reduce the
BE SUFFICIENT TO PROTECT YOU     effect of loan losses. But credit enhancements
FROM LOSSES                      may benefit only some classes of a series of
                                 securities and the amount of any credit
                                 enhancement will be limited as described in the
                                 related prospectus supplement. Furthermore, the
                                 amount of a credit enhancement may decline over
                                 time pursuant to a schedule or formula or
                                 otherwise, and could be depleted from payments
                                 or for other reasons before the securities
                                 covered by the credit enhancement are paid in
                                 full. In addition, a credit enhancement may not
                                 cover all potential sources of loss. For
                                 example, a credit enhancement may or may not
                                 cover fraud or negligence by a loan originator
                                 or other parties. Also, all or a portion of the
                                 credit enhancement may be reduced, substituted
                                 for, or even eliminated so long as the rating
                                 agencies rating the securities indicate that
                                 the change in credit enhancement would not
                                 cause them to change adversely their rating of
                                 the securities. Consequently, securityholders
                                 may suffer losses even though a credit
                                 enhancement exists and its provider does not
                                 default.

NATURE OF MORTGAGES              The mortgages and deeds of trust securing the
   Junior Status of Liens        home equity loans and home improvement loans
   Securing Home Equity Loans    will be primarily junior liens subordinate to
   and Home Improvement Loans    the rights of the mortgagee under the related
   Could Adversely Affect You    senior mortgage(s) or deed(s) of trust.
                                 Accordingly, the proceeds from any liquidation,
                                 insurance or condemnation proceeds will be
                                 available to satisfy the outstanding balance of
                                 the junior lien only to the extent that the
                                 claims of the related senior mortgagees have
                                 been satisfied in full, including any related
                                 foreclosure costs. In addition, if a junior
                                 mortgagee forecloses on the property securing a
                                 junior mortgage, it forecloses subject to any
                                 senior mortgage and must take one of the
                                 following steps to protect its interest in the
                                 property:

                                 o    pay the senior mortgage in full at or
                                      prior to the foreclosure sale, or

                                 o    assume the payments on the senior mortgage
                                      in the event the mortgagor is in default
                                      under the senior mortgage.

                                 The trust fund may effectively be prevented
                                 from foreclosing on the related property since
                                 it will have no funds to satisfy any senior
                                 mortgages or make payments due to any senior
                                 mortgagees.

                                 Some states have imposed legal limits on the
                                 remedies of a secured lender in the event that
                                 the proceeds of any sale under a deed of trust
                                 or other foreclosure proceedings are
                                 insufficient to pay amounts owed to that
                                 secured lender. In some states, including
                                 California, if a lender simultaneously
                                 originates a loan secured by a senior lien on a
                                 particular property and a loan secured by a
                                 junior lien on the same property, that lender
                                 as the holder of the junior lien may be
                                 precluded from obtaining a deficiency judgment
                                 with respect to the excess of:

                                 o    the aggregate amount owed under both the
                                      senior and junior loans over


                                        3



                                 o    the proceeds of any sale under a deed of
                                      trust or other foreclosure proceedings.

                                 See "Certain Legal Aspects of the Loans --
                                 Anti-Deficiency Legislation; Bankruptcy Laws;
                                 Tax Liens."

   Cooperative Loans May         Cooperative loans are evidenced by promissory
   Experience Relatively         notes secured by security interests in shares
   Higher Losses                 issued by private corporations that are
                                 entitled to be treated as housing cooperatives
                                 under the Internal Revenue Code and in the
                                 related proprietary leases or occupancy
                                 agreements granting exclusive rights to occupy
                                 specific dwelling units in the corporations'
                                 buildings.

                                 If there is a blanket mortgage (or mortgages)
                                 on the cooperative apartment building and/or
                                 underlying land, as is generally the case, the
                                 cooperative, as property borrower, is
                                 responsible for meeting these mortgage or
                                 rental obligations. If the cooperative is
                                 unable to meet the payment obligations arising
                                 under a blanket mortgage, the mortgagee holding
                                 a blanket mortgage could foreclose on that
                                 mortgage and terminate all subordinate
                                 proprietary leases and occupancy agreements. A
                                 foreclosure by the holder of a blanket mortgage
                                 could eliminate or significantly diminish the
                                 value of any collateral held by the lender who
                                 financed an individual tenant-stockholder of
                                 cooperative shares or, in the case of the
                                 mortgage loans, the collateral securing the
                                 cooperative loans.

                                 If there is an underlying lease of the land, as
                                 is the case in some instances, the cooperative
                                 is responsible for meeting the related rental
                                 obligations. If the cooperative is unable to
                                 meet its obligations arising under its land
                                 lease, the holder of the land lease could
                                 terminate the land lease and all subordinate
                                 proprietary leases and occupancy agreements.
                                 The termination of the land lease by its holder
                                 could eliminate or significantly diminish the
                                 value of any collateral held by the lender who
                                 financed an individual tenant-stockholder of
                                 the cooperative shares or, in the case of the
                                 mortgage loans, the collateral securing the
                                 cooperative loans. A land lease also has an
                                 expiration date and the inability of the
                                 cooperative to extend its term or, in the
                                 alternative, to purchase the land could lead to
                                 termination of the cooperative's interest in
                                 the property and termination of all proprietary
                                 leases and occupancy agreements which could
                                 eliminate or significantly diminish the value
                                 of the related collateral.

                                 In addition, if the corporation issuing the
                                 shares related to the cooperative loans fails
                                 to qualify as a cooperative housing corporation
                                 under the Internal Revenue Code, the value of
                                 the collateral securing the cooperative loan
                                 could be significantly impaired because the
                                 tenant-stockholders would not be permitted to
                                 deduct its proportionate share of certain
                                 interest expenses and real estate taxes of the
                                 corporation.

                                 The cooperative shares and proprietary lease or
                                 occupancy agreement pledged to the lender are,
                                 in almost all cases, subject to restrictions on
                                 transfer, including obtaining the consent of
                                 the cooperative housing corporation prior to
                                 the transfer, which may impair the value of the
                                 collateral after a default by the borrower due
                                 to an inability to find a transferee acceptable
                                 to the related housing corporation.


                                        4



   Home Improvement Loans        A borrower's obligations under a home
   Secured by Personal           improvement loan may be secured by the personal
   Property May Experience       property which was purchased with the proceeds
   Relatively Higher Losses      of the home improvement loan. The liquidation
                                 value of the related personal property is
                                 likely to be significantly less than the
                                 original purchase price of that property. In
                                 the event that the borrower on a home
                                 improvement loan defaults while a significant
                                 portion of the loan is outstanding, it is
                                 likely that the amount recovered from the sale
                                 of the related personal property will be
                                 insufficient to pay the related liquidation
                                 expenses and satisfy the remaining unpaid
                                 balance of the related loan. In that case, one
                                 or more classes of securities will suffer a
                                 loss. See "Certain Legal Aspects of the Loans
                                 -- Home Improvement Finance" for a description
                                 of certain legal issues related to home
                                 improvement loans.

   Declines in Property Values   The value of the properties underlying the
   May Adversely Affect You      loans held in the trust fund may decline over
                                 time. Among the factors that could adversely
                                 affect the value of the properties are:

                                 o    an overall decline in the residential real
                                      estate market in the areas in which they
                                      are located,

                                 o    a decline in their general condition from
                                      the failure of borrowers to maintain their
                                      property adequately, and

                                 o    natural disasters that are not covered by
                                      insurance, such as earthquakes and floods.

                                 In the case of home equity loans, declining
                                 property values could diminish or extinguish
                                 the value of a junior mortgage before reducing
                                 the value of a senior mortgage on the same
                                 property.

                                 If property values decline, the actual rates of
                                 delinquencies, foreclosures, and losses on all
                                 underlying loans could be higher than those
                                 currently experienced in the mortgage lending
                                 industry in general. These losses, to the
                                 extent not otherwise covered by a credit
                                 enhancement, will be borne by the holder of one
                                 or more classes of securities.

   Delays in Liquidation May     Even if the properties underlying the loans
   Adversely Affect You          held in the trust fund provide adequate
                                 security for the loans, substantial delays
                                 could occur before defaulted loans are
                                 liquidated and their proceeds are forwarded to
                                 investors. Property foreclosure actions are
                                 regulated by state statutes and rules and are
                                 subject to many of the delays and expenses of
                                 other lawsuits if defenses or counterclaims are
                                 made, sometimes requiring several years to
                                 complete. Furthermore, an action to obtain a
                                 deficiency judgment is regulated by statutes
                                 and rules, and the amount or availability of a
                                 deficiency judgment may be limited by law. In
                                 the event of a default by a borrower, these
                                 restrictions may impede the ability of the
                                 servicer to foreclose on or to sell the
                                 mortgaged property or to obtain a deficiency
                                 judgment, to obtain sufficient proceeds to
                                 repay the loan in full.

                                 In addition, the servicer will be entitled to
                                 deduct from liquidation proceeds all expenses
                                 reasonably incurred in attempting to recover on
                                 the defaulted loan, including legal and
                                 appraisal fees and costs, real estate taxes,
                                 and property maintenance and preservation
                                 expenses.


                                        5



                                 In the event that:

                                      o    the mortgaged properties fail to
                                           provide adequate security for the
                                           related loans,

                                      o    if applicable to a series as
                                           specified in the related prospectus
                                           supplement, excess cashflow (if any)
                                           and overcollateralization (if any) is
                                           insufficient to cover these
                                           shortfalls,

                                      o    if applicable to a series as
                                           specified in the related prospectus
                                           supplement, the subordination of
                                           certain classes are insufficient to
                                           cover these shortfalls, and

                                      o    with respect to the securities with
                                           the benefit of an insurance policy as
                                           specified in the related prospectus
                                           supplement, the credit enhancement
                                           provider fails to make the required
                                           payments under the related insurance
                                           policies,

                                 you could lose all or a portion of the money
                                 you paid for the securities and could also have
                                 a lower yield than anticipated at the time you
                                 purchased the securities.

   Disproportionate Effect of    Liquidation expenses of defaulted loans
   Liquidation Expenses May      generally do not vary directly with the
   Adversely Affect You          outstanding principal balance of the loan at
                                 the time of default. Therefore, if a servicer
                                 takes the same steps for a defaulted loan
                                 having a small remaining principal balance as
                                 it does for a defaulted loan having a large
                                 remaining principal balance, the amount
                                 realized after expenses is smaller as a
                                 percentage of the outstanding principal balance
                                 of the small loan than it is for the defaulted
                                 loan having a large remaining principal
                                 balance.

   Consumer Protection Laws      Federal, state and local laws extensively
   May Adversely Affect You      regulate various aspects of brokering,
                                 originating, servicing and collecting loans
                                 secured by consumers' dwellings. Among other
                                 things, these laws may regulate interest rates
                                 and other charges, require disclosures, impose
                                 financial privacy requirements, mandate
                                 specific business practices, and prohibit
                                 unfair and deceptive trade practices. In
                                 addition, licensing requirements may be imposed
                                 on persons that broker, originate, service or
                                 collect loans secured by consumers' dwellings.

                                 Additional requirements may be imposed under
                                 federal, state or local laws on so-called "high
                                 cost mortgage loans," which typically are
                                 defined as loans secured by a consumer's
                                 dwelling that have interest rates or
                                 origination costs in excess of prescribed
                                 levels. These laws may limit certain loan
                                 terms, such as prepayment charges, or the
                                 ability of a creditor to refinance a loan
                                 unless it is in the borrower's interest. In
                                 addition, certain of these laws may allow
                                 claims against loan brokers or originators,
                                 including claims based on fraud or
                                 misrepresentations, to be asserted against
                                 persons acquiring the loans, such as the trust
                                 fund.


                                        6



                                 The federal laws that may apply to loans held
                                 in the trust fund include the following:

                                 o    the Truth in Lending Act and its
                                      regulations, which (among other things)
                                      require disclosures to borrowers regarding
                                      the terms of loans and provide consumers
                                      who pledged their principal dwelling as
                                      collateral in a non-purchase money
                                      transaction with a right of rescission
                                      that generally extends for three days
                                      after proper disclosures are given;

                                 o    the Home Ownership and Equity Protection
                                      Act and its regulations, which (among
                                      other things) imposes additional
                                      disclosure requirements and limitations on
                                      loan terms with respect to non-purchase
                                      money, installment loans secured by the
                                      consumer's principal dwelling that have
                                      interest rates or origination costs in
                                      excess of prescribed levels;

                                 o    the Home Equity Loan Consumer Protection
                                      Act and its regulations, which (among
                                      other things) limit changes that may be
                                      made to open-end loans secured by the
                                      consumer's dwelling, and restricts the
                                      ability to accelerate balances or suspend
                                      credit privileges on these loans;

                                 o    the Real Estate Settlement Procedures Act
                                      and its regulations, which (among other
                                      things) prohibit the payment of referral
                                      fees for real estate settlement services
                                      (including mortgage lending and brokerage
                                      services) and regulate escrow accounts for
                                      taxes and insurance and billing inquiries
                                      made by borrowers;

                                 o    the Equal Credit Opportunity Act and its
                                      regulations, which (among other things)
                                      generally prohibit discrimination in any
                                      aspect of a credit transaction on certain
                                      enumerated basis, such as age, race,
                                      color, sex, religion, marital status,
                                      national origin or receipt of public
                                      assistance;

                                 o    the Federal Trade Commission's Rule on
                                      Preservation of Consumer Claims and
                                      Defenses, which generally provides that
                                      the rights of an assignee of a conditional
                                      sales contract (or of certain lenders
                                      making purchase money loans) to enforce a
                                      consumer credit obligation are subject to
                                      the claims and defenses that the consumer
                                      could assert against the seller of goods
                                      or services financed in the credit
                                      transaction; and

                                 o    the Fair Credit Reporting Act, which
                                      (among other things) regulates the use of
                                      consumer reports obtained from consumer
                                      reporting agencies and the reporting of
                                      payment histories to consumer reporting
                                      agencies.

                                 The penalties for violating these federal,
                                 state, or local laws vary depending on the
                                 applicable law and the particular facts of the
                                 situation. However, private plaintiffs
                                 typically may assert claims for actual damages
                                 and, in some cases, also may recover civil
                                 money penalties or exercise a right to rescind
                                 the loan. Violations of certain laws may limit
                                 the ability to collect all or part of the
                                 principal or interest on a loan and,


                                        7



                                 in some cases, borrowers even may be entitled
                                 to a refund of amounts previously paid.
                                 Federal, state and local administrative or law
                                 enforcement agencies also may be entitled to
                                 bring legal actions, including actions for
                                 civil money penalties or restitution, for
                                 violations of certain of these laws.

                                 Depending on the particular alleged misconduct,
                                 it is possible that claims may be asserted
                                 against various participants in secondary
                                 market transactions, including assignees that
                                 hold the loans, such as the trust fund. Losses
                                 on loans from the application of these federal,
                                 state and local laws that are not otherwise
                                 covered by one or more forms of credit
                                 enhancement will be borne by the holders of one
                                 or more classes of securities. Additionally,
                                 the trust may experience losses arising from
                                 lawsuits related to alleged violations of these
                                 laws, which, if not covered by one or more
                                 forms of credit enhancement or the related
                                 seller, will be borne by the holders of one or
                                 more classes of securities.

   Losses on Balloon Payment     Some of the mortgage loans held in the trust
   Mortgages Are Borne by You    fund may not be fully amortizing over their
                                 terms to maturity and, thus, will require
                                 substantial principal payments (that is,
                                 balloon payments) at their stated maturity.
                                 Loans with balloon payments involve a greater
                                 degree of risk than fully amortizing loans
                                 because typically the borrower must be able to
                                 refinance the loan or sell the property to make
                                 the balloon payment at maturity. The ability of
                                 a borrower to do this will depend on factors
                                 such as mortgage rates at the time of sale or
                                 refinancing, the borrower's equity in the
                                 property, the relative strength of the local
                                 housing market, the financial condition of the
                                 borrower, and tax laws. Losses on these loans
                                 that are not otherwise covered by a credit
                                 enhancement will be borne by the holders of one
                                 or more classes of securities.

YOUR RISK OF LOSS MAY BE         Multifamily lending may expose the lender to a
HIGHER THAN YOU EXPECT IF YOUR   greater risk of loss than single family
SECURITIES ARE BACKED BY         residential lending. Owners of multifamily
MULTIFAMILY LOANS                residential properties rely on monthly lease
                                 payments from tenants to

                                 o    pay for maintenance and other operating
                                      expenses of those properties,

                                 o    fund capital improvements, and

                                 o    service any mortgage loan and any other
                                      debt that may be secured by those
                                      properties.

                                 Various factors, many of which are beyond the
                                 control of the owner or operator of a
                                 multifamily property, may affect the economic
                                 viability of that property.

                                 Changes in payment patterns by tenants may
                                 result from a variety of social, legal and
                                 economic factors. Economic factors include the
                                 rate of inflation, unemployment levels and
                                 relative rates offered for various types of
                                 housing. Shifts in economic factors may trigger
                                 changes in payment patterns including increased
                                 risks of defaults by tenants and higher vacancy
                                 rates. Adverse economic conditions, either
                                 local or national, may limit the amount of rent
                                 that can be charged and may result in a
                                 reduction in timely lease payments or a
                                 reduction in occupancy levels. Occupancy and
                                 rent levels may also be affected by
                                 construction


                                        8



                                 of additional housing units, competition and
                                 local politics, including rent stabilization or
                                 rent control laws and policies. In addition,
                                 the level of mortgage interest rates may
                                 encourage tenants to purchase single family
                                 housing. We are unable to determine and have no
                                 basis to predict whether, or to what extent,
                                 economic, legal or social factors will affect
                                 future rental or payment patterns.

                                 The location and construction quality of a
                                 particular building may affect the occupancy
                                 level as well as the rents that may be charged
                                 for individual units. The characteristics of a
                                 neighborhood may change over time or in
                                 relation to newer developments. The effects of
                                 poor construction quality will increase over
                                 time in the form of increased maintenance and
                                 capital improvements. Even good construction
                                 will deteriorate over time if adequate
                                 maintenance is not performed in a timely
                                 fashion.

IMPACT OF WORLD EVENTS           The economic impact of the United States'
                                 military operations in Iraq and other parts of
                                 the world, as well as the possibility of any
                                 terrorist attacks domestically or abroad, is
                                 uncertain, but could have a material effect on
                                 general economic conditions, consumer
                                 confidence, and market liquidity. We can give
                                 no assurance as to the effect of these events
                                 on consumer confidence and the performance of
                                 the loans held by trust fund. Any adverse
                                 impact resulting from these events would be
                                 borne by the holders of one or more classes of
                                 the securities.

                                 United States military operations also increase
                                 the likelihood of shortfalls under the
                                 Servicemembers Civil Relief Act or similar
                                 state laws (referred to as the "Relief Act" ).
                                 The Relief Act provides relief to borrowers who
                                 enter active military service and to borrowers
                                 in reserve status who are called to active duty
                                 after the origination of their loan. The Relief
                                 Act provides generally that these borrowers may
                                 not be charged interest on a loan in excess of
                                 6% per annum during the period of the
                                 borrower's active duty. These shortfalls are
                                 not required to be paid by the borrower at any
                                 future time and will not be advanced by the
                                 servicer, unless otherwise specified in the
                                 related prospectus supplement. To the extent
                                 these shortfalls reduce the amount of interest
                                 paid to the holders of securities with the
                                 benefit of an insurance policy, unless
                                 otherwise specified in the related prospectus
                                 supplement, they will not be covered by the
                                 related insurance policy. In addition, the
                                 Relief Act imposes limitations that would
                                 impair the ability of the servicer to foreclose
                                 on an affected loan during the borrower's
                                 period of active duty status, and, under some
                                 circumstances, during an additional period
                                 thereafter.

YOUR RISK OF LOSS MAY BE         The trust fund may also include home equity
HIGHER THAN YOU EXPECT IF YOUR   loans that were originated with loan-to-value
SECURITIES ARE BACKED BY         ratios or combined loan-to-value ratios in
PARTIALLY UNSECURED HOME         excess of the value of the related mortgaged
EQUITY LOANS                     property. Under these circumstances, the trust
                                 fund could be treated as a general unsecured
                                 creditor as to any unsecured portion of any
                                 related loan. In the event of a default under a
                                 loan that is unsecured in part, the trust fund
                                 will have recourse only against the borrower's
                                 assets generally for the unsecured portion of
                                 the loan, along with all other general
                                 unsecured creditors of the borrower.

YOU COULD BE ADVERSELY           Federal, state, and local laws and regulations
AFFECTED BY VIOLATIONS OF        impose a wide range of requirements on
ENVIRONMENTAL LAWS               activities that may affect the environment,
                                 health, and safety. In certain circumstances,
                                 these laws and regulations impose obligations
                                 on "owners" or "operators" of residential
                                 properties such as


                                        9



                                 those that secure the loans held in the trust
                                 fund. Failure to comply with these laws and
                                 regulations can result in fines and penalties
                                 that could be assessed against the trust if it
                                 were to be considered an "owner" or "operator"
                                 of the related property. A property "owner" or
                                 "operator" can also be held liable for the cost
                                 of investigating and remediating contamination,
                                 regardless of fault, and for personal injury or
                                 property damage arising from exposure to
                                 contaminants.

                                 In some states, a lien on the property due to
                                 contamination has priority over the lien of an
                                 existing mortgage. Also, a mortgage lender may
                                 be held liable as an "owner" or "operator" for
                                 costs associated with the release of hazardous
                                 substances from a site, or petroleum from an
                                 underground storage tank under certain
                                 circumstances. If the trust were to be
                                 considered the "owner" or "operator" of a
                                 property, it will suffer losses as a result of
                                 any liability imposed for environmental hazards
                                 on the property.

RATINGS OF THE SECURITIES DO     Any class of securities issued under this
NOT ASSURE THEIR PAYMENT         prospectus and the accompanying prospectus
                                 supplement will be rated in one of the rating
                                 categories which signifies investment grade by
                                 at least one nationally recognized rating
                                 agency. A rating is based on the adequacy of
                                 the value of the trust assets and any credit
                                 enhancement for that class, and reflects the
                                 rating agency's assessment of how likely it is
                                 that holders of the class of securities will
                                 receive the payments to which they are
                                 entitled. A rating does not constitute an
                                 assessment of how likely it is that principal
                                 prepayments on the underlying loans will be
                                 made, the degree to which the rate of
                                 prepayments might differ from that originally
                                 anticipated, or the likelihood that the
                                 securities will be redeemed early. A rating is
                                 not a recommendation to purchase, hold, or sell
                                 securities because it does not address the
                                 market price of the securities or the
                                 suitability of the securities for any
                                 particular investor.

                                 A rating may not remain in effect for any given
                                 period of time and the rating agency could
                                 lower or withdraw the rating entirely in the
                                 future. For example, the rating agency could
                                 lower or withdraw its rating due to:

                                 o    a decrease in the adequacy of the value of
                                      the trust assets or any related credit
                                      enhancement,

                                 o    an adverse change in the financial or
                                      other condition of a credit enhancement
                                      provider, or

                                 o    a change in the rating of the credit
                                      enhancement provider's long-term debt.

                                 The amount, type, and nature of credit
                                 enhancement established for a class of
                                 securities will be determined on the basis of
                                 criteria established by each rating agency
                                 rating classes of the securities. These
                                 criteria are sometimes based upon an actuarial
                                 analysis of the behavior of similar loans in a
                                 larger group. That analysis is often the basis
                                 upon which each rating agency determines the
                                 amount of credit enhancement required for a
                                 class. The historical data supporting any
                                 actuarial analysis may not accurately reflect
                                 future experience, and the data derived from a
                                 large pool of similar loans may not accurately
                                 predict the delinquency, foreclosure, or loss
                                 experience of any particular pool of mortgage
                                 loans.


                                       10



                                 Mortgaged properties may not retain their
                                 values. If residential real estate markets
                                 experience an overall decline in property
                                 values such that the outstanding principal
                                 balances of the loans held in a particular
                                 trust fund and any secondary financing on the
                                 related mortgaged properties become equal to or
                                 greater than the value of the mortgaged
                                 properties, the rates of delinquencies,
                                 foreclosures, and losses could be higher than
                                 those now generally experienced in the mortgage
                                 lending industry. In addition, adverse economic
                                 conditions may affect timely payment by
                                 mortgagors on their loans whether or not the
                                 conditions affect real property values and,
                                 accordingly, the rates of delinquencies,
                                 foreclosures, and losses in any trust fund.
                                 Losses from this that are not covered by a
                                 credit enhancement will be borne, at least in
                                 part, by the holders of one or more classes of
                                 securities.

BOOK-ENTRY REGISTRATION          Securities issued in book-entry form may have
   Limit on Liquidity            only limited liquidity in the resale market,
                                 since investors may be unwilling to purchase
                                 securities for which they cannot obtain
                                 physical instruments.

   Limit on Ability to           Transactions in book-entry securities can be
   Transfer or Pledge            effected only through The Depository Trust
                                 Company, its participating organizations, its
                                 indirect participants, and certain banks.
                                 Therefore, your ability to transfer or pledge
                                 securities issued in book-entry form may be
                                 limited.

   Delays in Distributions       You may experience some delay in the receipt of
                                 distributions on book-entry securities since
                                 the distributions will be forwarded by the
                                 trustee to The Depository Trust Company for it
                                 to credit the accounts of its participants. In
                                 turn, these participants will then credit the
                                 distributions to your account either directly
                                 or indirectly through indirect participants.

SECONDARY MARKET FOR THE         The related prospectus supplement for each
SECURITIES MAY NOT EXIST         series will specify the classes in which the
                                 underwriter intends to make a secondary market,
                                 but no underwriter will have any obligation to
                                 do so. We can give no assurance that a
                                 secondary market for the securities will
                                 develop or, if it develops, that it will
                                 continue. Consequently, you may not be able to
                                 sell your securities readily or at prices that
                                 will enable you to realize your desired yield.
                                 The market values of the securities are likely
                                 to fluctuate. Fluctuations may be significant
                                 and could result in significant losses to you.

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

BANKRUPTCY OR INSOLVENCY MAY     Each seller and the depositor will take steps
AFFECT THE TIMING AND            to structure the transfer of the loans held in
AMOUNT OF DISTRIBUTIONS          the trust fund by the seller to the depositor
ON THE SECURITIES                as a sale. The depositor and the trust fund
                                 will take steps to structure the transfer of
                                 the loans from the depositor to the trust fund
                                 as a sale. If these characterizations are
                                 correct, then if the seller were to become
                                 bankrupt, the loans would not be part of the
                                 seller's bankruptcy estate and would not be
                                 available to the seller's creditors. On the
                                 other hand, if the seller becomes bankrupt, its
                                 bankruptcy trustee or one of its creditors may
                                 attempt to recharacterize the sale of the loans
                                 as a borrowing by the seller, secured by a
                                 pledge of the loans. Presenting this position
                                 to a


                                       11



                                 bankruptcy court could prevent timely payments
                                 on the securities and even reduce the payments
                                 on the securities. Additionally, if that
                                 argument is successful, the bankruptcy trustee
                                 could elect to sell the loans and pay down the
                                 securities early. Thus, you could lose the
                                 right to future payments of interest, and might
                                 suffer reinvestment losses in a lower interest
                                 rate environment.

                                 Similarly, if the characterizations of the
                                 transfers as sales are correct, then if the
                                 depositor were to become bankrupt, the loans
                                 would not be part of the depositor's bankruptcy
                                 estate and would not be available to the
                                 depositor's creditors. On the other hand, if
                                 the depositor becomes bankrupt, its bankruptcy
                                 trustee or one of its creditors may attempt to
                                 recharacterize the sale of the loans as a
                                 borrowing by the depositor, secured by a pledge
                                 of the loans. Presenting this position to a
                                 bankruptcy court could prevent timely payments
                                 on the securities and even reduce the payments
                                 on the securities.

                                 If the master servicer becomes bankrupt, the
                                 bankruptcy trustee may have the power to
                                 prevent the appointment of a successor master
                                 servicer. Any related delays in servicing could
                                 result in increased delinquencies or losses on
                                 the loans. The period during which cash
                                 collections may be commingled with the master
                                 servicer's own funds before each distribution
                                 date for securities will be specified in the
                                 applicable prospectus supplement. If the master
                                 servicer becomes bankrupt and cash collections
                                 have been commingled with the master servicer's
                                 own funds, the trust fund will likely not have
                                 a perfected interest in those collections. In
                                 this case the trust might be an unsecured
                                 creditor of the master servicer as to the
                                 commingled funds and could recover only its
                                 share as a general creditor, which might be
                                 nothing. Collections that are not commingled
                                 but still in an account of the master servicer
                                 might also be included in the bankruptcy estate
                                 of the master servicer even though the trust
                                 may have a perfected security interest in them.
                                 Their inclusion in the bankruptcy estate of the
                                 master servicer may result in delays in payment
                                 and failure to pay amounts due on the
                                 securities.

                                 Federal and state statutory provisions
                                 affording protection or relief to distressed
                                 borrowers may affect the ability of the secured
                                 mortgage lender to realize upon its security in
                                 other situations as well. For example, in a
                                 proceeding under the federal Bankruptcy Code, a
                                 lender may not foreclose on a mortgaged
                                 property without the permission of the
                                 bankruptcy court. And in certain instances a
                                 bankruptcy court may allow a borrower to reduce
                                 the monthly payments, change the rate of
                                 interest, and alter the mortgage loan repayment
                                 schedule for under-collateralized mortgage
                                 loans. The effect of these types of proceedings
                                 can be to cause delays in receiving payments on
                                 the loans underlying securities and even to
                                 reduce the aggregate amount of payments on the
                                 loans underlying securities.

THE PRINCIPAL AMOUNT OF          The market value of the assets relating to a
SECURITIES MAY EXCEED THE        series of securities at any time may be less
MARKET VALUE OF THE TRUST        than the principal amount of the securities of
FUND ASSETS                      that series then outstanding, plus accrued
                                 interest. In the case of a series of notes,
                                 after an event of default and a sale of the
                                 assets relating to a series of securities, the
                                 trustee, the master servicer, the credit
                                 enhancer, if any, and any other service
                                 provider specified in the related prospectus
                                 supplement generally will be entitled to
                                 receive the proceeds of that sale to the extent
                                 of unpaid fees and other amounts owing to them
                                 under the related


                                       12



                                 transaction document prior to distributions to
                                 securityholders. Upon any sale of the assets in
                                 connection with an event of default, the
                                 proceeds may be insufficient to pay in full the
                                 principal of and interest on the securities of
                                 the related series.

                                 Certain capitalized terms are used in this
                                 prospectus to assist you in understanding the
                                 terms of the securities. The capitalized terms
                                 used in this prospectus are defined on the
                                 pages indicated under the caption "Index to
                                 Defined Terms" beginning on page 96.


                                       13



                                 THE TRUST FUND

GENERAL

     The securities of each series will represent interests in the assets of the
related trust fund, and the notes of each series will be secured by the pledge
of the assets of the related trust fund. The trust fund for each series will be
held by the trustee for the benefit of the related securityholders. Each trust
fund will consist of the trust fund assets (the "Trust Fund Assets") consisting
of a pool comprised of loans as specified in the related prospectus supplement,
together with payments relating to those loans as specified in the related
prospectus supplement.

     The pool will be created on the first day of the month of the issuance of
the related series of securities or on another date specified in the related
prospectus supplement. The securities will be entitled to payment from the
assets of the related trust fund or funds or other assets pledged for the
benefit of the securityholders, as specified in the related prospectus
supplement and will not be entitled to payments in respect of the assets of any
other trust fund established by the depositor.*

     The Trust Fund Assets will be acquired by the depositor, either directly or
through affiliates, from originators or sellers which may be affiliates of the
depositor (the "Sellers"), and conveyed without recourse by the depositor to the
related trust fund. Loans acquired by the depositor will have been originated in
accordance with the underwriting criteria specified below under "Loan Program --
Underwriting Standards" or as otherwise described in the related prospectus
supplement. See "Loan Program -- Underwriting Standards."

     The depositor will cause the Trust Fund Assets to be assigned to the
trustee named in the related prospectus supplement for the benefit of the
holders of the securities of the related series. The master servicer named in
the related prospectus supplement will service the Trust Fund Assets, either
directly or through other servicing institutions called sub-servicers, pursuant
to a Pooling and Servicing Agreement (each, a "Pooling and Servicing Agreement"
among the depositor, the master servicer and the trustee with respect to a
series consisting of certificates, or a sale and servicing agreement (each, a
"Sale and Servicing Agreement") between the trustee and the master servicer with
respect to a series consisting of certificates and notes, and will receive a fee
for these services. See "Loan Program" and "The Agreements." With respect to
loans serviced by the master servicer through a sub-servicer, the master
servicer will remain liable for its servicing obligations under the related
Agreement as if the master servicer alone were servicing those loans.

     If so specified in the related prospectus supplement, a trust fund relating
to a series of securities may be a business trust or common law trust formed
under the laws of the state specified in the related prospectus supplement
pursuant to a trust agreement (each, a "Trust Agreement") between the depositor
and the trustee of the trust fund.

     As used herein, "Agreement" means, with respect to a series consisting of
certificates, the Pooling and Servicing Agreement, and with respect to a series
consisting of certificates and notes, the Trust Agreement, the Indenture and the
Sale and Servicing Agreement, as the context requires.

     With respect to each trust fund, prior to the initial offering of the
related series of securities, the trust fund will have no assets or liabilities.
No trust fund is expected to engage in any activities other than acquiring,
managing and holding of the related Trust Fund Assets and other assets
contemplated herein specified and in the related prospectus supplement and the
proceeds thereof, issuing securities and making payments and distributions
thereon and certain related activities. No trust fund is expected to have any
source of capital other than its assets and any related credit enhancement.

----------
*    Whenever the terms pool, certificates, notes and securities are used in
     this prospectus, those terms will be considered to apply, unless the
     context indicates otherwise, to one specific pool and the securities of one
     series including the certificates representing undivided interests in,
     and/or notes secured by the assets of, a single trust fund consisting
     primarily of the loans in that pool. Similarly, the term "Pass- Through
     Rate" will refer to the pass-through rate borne by the certificates and the
     term interest rate will refer to the interest rate borne by the notes of
     one specific series, as applicable, and the term trust fund will refer to
     one specific trust fund.


                                       14



     The applicable prospectus supplement may provide for additional obligations
of the depositor, but if it does not, the only obligations of the depositor with
respect to a series of securities will be to obtain certain representations and
warranties from the sellers and to assign to the trustee for that series of
securities the depositor's rights with respect to the representations and
warranties. See "The Agreements -- Assignment of the Trust Fund Assets." The
obligations of the master servicer with respect to the loans will consist
principally of its contractual servicing obligations under the related Agreement
(including its obligation to enforce the obligations of the sub-servicers or
sellers, or both, as more fully described herein under "Loan Program --
Representations by Sellers; Repurchases" and "The Agreements -- Sub-Servicing By
Sellers" and "-- Assignment of the Trust Fund Assets") and its obligation, if
any, to make certain cash advances in the event of delinquencies in payments on
or with respect to the loans in the amounts described herein under "Description
of the Securities -- Advances." The obligations of the master servicer to make
advances may be subject to limitations, to the extent provided herein and in the
related prospectus supplement.

     The following is a brief description of the assets expected to be included
in the trust funds. If specific information respecting the Trust Fund Assets is
not known at the time the related series of securities initially is offered,
more general information of the nature described below will be provided in the
related prospectus supplement, and specific information will be set forth in a
report on Form 8-K to be filed with the Securities and Exchange Commission (the
"SEC") after the initial issuance of the related securities (the "Detailed
Description"). A copy of the Agreement with respect to each series of securities
will be filed on Form 8-K after the initial issuance of the related securities
and will be available for inspection at the corporate trust office of the
trustee specified in the related prospectus supplement. A schedule of the loans
relating to the series will be attached to the Agreement delivered to the
trustee upon delivery of the securities.

THE LOANS

     General. Loans will consist of single family loans, multifamily loans, home
equity loans or home improvement loan contracts. For purposes hereof, "home
equity loans" includes "closed-end loans" and "revolving credit line loans." If
so specified, the loans may include cooperative apartment loans ("cooperative
loans") secured by security interests in shares issued by private, non-profit,
cooperative housing corporations ("cooperatives") and in the related proprietary
leases or occupancy agreements granting exclusive rights to occupy specific
dwelling units in the cooperatives' buildings. As more fully described in the
related prospectus supplement, the loans may be "conventional" loans or loans
that are insured or guaranteed by a governmental agency such as the Federal
Housing Administration (the "FHA") or the Department of Veterans' Affairs (the
"VA").

     The applicable prospectus supplement may specify the day on which monthly
payments on the loans in a pool will be due, but if it does not, all of the
mortgage loans in a pool will have monthly payments due on the first day of each
month. The payment terms of the loans to be included in a trust fund will be
described in the related prospectus supplement and may include any of the
following features or combination thereof or other features described in the
related prospectus supplement:

o    Interest may be payable at a fixed rate, a rate adjustable from time to
     time in relation to an index (which will be specified in the related
     prospectus supplement), a rate that is fixed for a period of time or under
     certain circumstances and is followed by an adjustable rate, a rate that
     otherwise varies from time to time, or a rate that is convertible from an
     adjustable rate to a fixed rate. Changes to an adjustable rate may be
     subject to periodic limitations, maximum rates, minimum rates or a
     combination of the limitations. Accrued interest may be deferred and added
     to the principal of a loan for the periods and under the circumstances as
     may be specified in the related prospectus supplement. Loans may provide
     for the payment of interest at a rate lower than the specified interest
     rate borne by the loan (the "Loan Rate") for a period of time or for the
     life of the loan, and the amount of any difference may be contributed from
     funds supplied by the seller of the Property or another source.

o    Principal may be payable on a level debt service basis to fully amortize
     the loan over its term, may be calculated on the basis of an assumed
     amortization schedule that is significantly longer than the original term
     to maturity or on an interest rate that is different from the Loan Rate or
     may not be amortized during all or a portion of the original term. Payment
     of all or a substantial portion of the principal may be due on


                                       15



     maturity, called balloon payments. Principal may include interest that has
     been deferred and added to the principal balance of the loan.

o    Monthly payments of principal and interest may be fixed for the life of the
     loan, may increase over a specified period of time or may change from
     period to period. The terms of a loan may include limits on periodic
     increases or decreases in the amount of monthly payments and may include
     maximum or minimum amounts of monthly payments.

o    The loans generally may be prepaid at any time. Prepayments of principal
     may be subject to a prepayment fee, which may be fixed for the life of the
     loan or may decline over time, and may be prohibited for the life of the
     loan or for certain periods, which are called lockout periods. Certain
     loans may permit prepayments after expiration of the applicable lockout
     period and may require the payment of a prepayment fee in connection with
     any subsequent prepayment. Other loans may permit prepayments without
     payment of a fee unless the prepayment occurs during specified time
     periods. The loans may include "due-on-sale" clauses that permit the
     mortgagee to demand payment of the entire loan in connection with the sale
     or certain transfers of the related mortgaged property. Other loans may be
     assumable by persons meeting the then applicable underwriting standards of
     the seller.

     A trust fund may contain buydown loans that include provisions whereby a
third party partially subsidizes the monthly payments of the obligors on the
loans during the early years of the loans, the difference to be made up from a
buydown fund contributed by the third party at the time of origination of the
loan. A buydown fund will be in an amount equal either to the discounted value
or full aggregate amount of future payment subsidies. Thereafter, buydown funds
are applied to the applicable loan upon receipt by the master servicer of the
mortgagor's portion of the monthly payment on the loan. The master servicer
administers the buydown fund to ensure that the monthly allocation from the
buydown fund combined with the monthly payment received from the mortgagor
equals the scheduled monthly payment on the applicable loan. The underlying
assumption of buydown plans is that the income of the mortgagor will increase
during the buydown period as a result of normal increases in compensation and
inflation, so that the mortgagor will be able to meet the full mortgage payments
at the end of the buydown period. To the extent that this assumption as to
increased income is not fulfilled, the possibility of defaults on buydown loans
is increased. The related prospectus supplement will contain information with
respect to any Buydown Loan concerning limitations on the interest rate paid by
the mortgagor initially, on annual increases in the interest rate and on the
length of the buydown period.

     The real property which secures repayment of the loans is referred to as
the mortgaged properties. The loans will be secured by mortgages or deeds of
trust or other similar security instruments creating a lien on a mortgaged
property. In the case of home equity loans, those liens generally will be
subordinated to one or more senior liens on the related mortgaged properties as
described in the related prospectus supplement. In addition to being secured by
mortgages on real estate the home improvement loan contracts may also be secured
by purchase money security interests in the home improvements financed thereby.
If so specified in the related prospectus supplement, the home equity loans may
include loans (primarily for home improvement or debt consolidation purposes)
that are in amounts in excess of the value of the related mortgaged properties
at the time of origination. The mortgaged properties and the home improvements
are collectively referred to herein as the "Properties." The Properties may be
located in any one of the fifty states, the District of Columbia, Guam, Puerto
Rico or any other territory of the United States.

     Loans with certain Loan-to-Value Ratios and/or certain principal balances
may be covered wholly or partially by primary mortgage guaranty insurance
policies (each, a "Primary Mortgage Insurance Policy"). The existence, extent
and duration of any coverage will be described in the applicable prospectus
supplement.

     The aggregate principal balance of loans secured by Properties that are
owner-occupied will be disclosed in the related prospectus supplement. The
applicable prospectus supplement may provide for the basis for representations
relating to Single Family Properties, but if it does not, the sole basis for a
representation that a given percentage of the loans is secured by Single Family
Properties that are owner-occupied will be either (i) the making of a
representation by the borrower at origination of the loan either that the
underlying Property will be used by the


                                       16



borrower for a period of at least six months every year or that the borrower
intends to use the Property as a primary residence or (ii) a finding that the
address of the underlying Property is the borrower's mailing address.

     Single Family Loans. The mortgaged properties relating to single family
loans will consist of detached or semi-detached one- to four-family dwelling
units, townhouses, rowhouses, individual condominium units, individual units in
planned unit developments, manufactured housing that is permanently affixed and
treated as real property under local law, and certain other dwelling units
("Single Family Properties"). Single Family Properties may include vacation and
second homes, investment properties and leasehold interests. In the case of
leasehold interests, the applicable prospectus supplement may provide for the
leasehold term, but if it does not, the term of the leasehold will exceed the
scheduled maturity of the loan by at least five years.

     Multifamily Loans. Mortgaged properties which secure multifamily loans may
include small multifamily residential properties such as rental apartment
buildings or projects containing five to fifty residential units, including
mid-rise and garden apartments. Certain of the multifamily loans may be secured
by apartment buildings owned by cooperatives. In those cases, the cooperative
owns all the apartment units in the building and all common areas. The
cooperative is owned by tenant-stockholders who, through ownership of stock,
shares or membership certificates in the corporation, receive proprietary leases
or occupancy agreements which confer exclusive rights to occupy specific
apartments or units. Generally, a tenant-stockholder of a cooperative must make
a monthly payment to the cooperative representing the tenant-stockholder's pro
rata share of the cooperative's payments for its mortgage loan, real property
taxes, maintenance expenses and other capital or ordinary expenses. Those
payments are in addition to any payments of principal and interest the
tenant-stockholder must make on any loans to the tenant-stockholder secured by
its shares in the cooperative. The cooperative will be directly responsible for
building management and, in most cases, payment of real estate taxes and hazard
and liability insurance. A cooperative's ability to meet debt service
obligations on a multifamily loan, as well as all other operating expenses, will
be dependent in large part on the receipt of maintenance payments from the
tenant-stockholders, as well as any rental income from units the cooperative
might control. Unanticipated expenditures may in some cases have to be paid by
special assessments on the tenant-stockholders. No more than 5% of the aggregate
Trust Fund Assets for any series, as constituted at the time of the applicable
cut-off date (measured by principal balance), will be comprised of multifamily
loans.

     Home Equity Loans. The mortgaged properties relating to home equity loans
will consist of Single Family Properties. As more fully described in the related
prospectus supplement, interest on each revolving credit line loan, excluding
introductory rates offered from time to time during promotional periods, is
computed and payable monthly on the average daily outstanding principal balance
of the loan. Principal amounts on a revolving credit line loan may be drawn down
(up to a maximum amount as set forth in the related prospectus supplement) or
repaid under each revolving credit line loan from time to time, but may be
subject to a minimum periodic payment. Except to the extent provided in the
related prospectus supplement, the trust fund will not include any amounts
borrowed under a revolving credit line loan after the cut-off date. The full
amount of a closed-end loan is advanced at the inception of the loan and
generally is repayable in equal (or substantially equal) installments of an
amount to fully amortize the loan at its stated maturity. Except to the extent
provided in the related prospectus supplement, the original terms to stated
maturity of closed-end loans will not exceed 360 months. Under certain
circumstances, under either a revolving credit line loan or a closed-end loan, a
borrower may choose an interest only payment option and is obligated to pay only
the amount of interest which accrues on the loan during the billing cycle. An
interest only payment option may be available for a specified period before the
borrower must begin paying at least the minimum monthly payment of a specified
percentage of the average outstanding balance of the loan.

     Home Improvement Loan Contracts. The Trust Fund Assets for a series of
securities may consist, in whole or in part, of home improvement loan contracts
originated by a home improvement contractor, a thrift or a commercial mortgage
banker in the ordinary course of business. The home improvements securing the
home improvement loan contracts may include, but are not limited to, replacement
windows, house siding, new roofs, swimming pools, satellite dishes, kitchen and
bathroom remodeling goods and solar heating panels. The home improvement loan
contracts will be secured by mortgages on Single Family Properties which are
generally subordinate to other mortgages on the same Property. In general, the
home improvement loan contracts will be fully amortizing and may have fixed
interest rates or adjustable interest rates and may provide for other payment
characteristics as described below and in the related prospectus supplement. The
initial Loan-to-Value Ratio of a home improvement loan contract is computed in
the manner described in the related prospectus supplement.


                                       17



     Additional Information. Each prospectus supplement will contain
information, as of the date of the prospectus supplement and to the extent then
specifically known to the depositor, with respect to the loans contained in the
related pool, including

o    the aggregate outstanding principal balance and the average outstanding
     principal balance of the loans as of the first day of the month of issuance
     of the related series of certificates or another date specified in the
     related prospectus supplement called a cut-off date,

o    the type of property securing the loans (e.g., single-family residences,
     individual units in condominium apartment buildings or in buildings owned
     by cooperatives, small multifamily properties, other real property or home
     improvements),

o    the original terms to maturity of the loans,

o    the ranges of the principal balances of the loans,

o    the earliest origination date and latest maturity date of any of the loans,

o    the ranges of the Loan-to-Value Ratios or Combined Loan-to-Value Ratios, as
     applicable, of the loans at origination,

o    the Loan Rates or annual percentage rates ("APR") or range of Loan Rates or
     APR's borne by the loans, and

o    the geographical distribution of the loans.

     If specific information respecting the loans is not known to the depositor
at the time the related securities are initially offered, more general
information of the nature described above will be provided in the detailed
description of Trust Fund Assets.

     The "Loan-to-Value Ratio" of a loan at any given time is the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related loan and the denominator of which is the Collateral Value
of the related Property. The "Combined Loan-to-Value Ratio" of a loan at any
given time is the ratio, expressed as a percentage, of (i) the sum of (a) the
original principal balance of the loan (or, in the case of a revolving credit
line loan, the maximum amount thereof available) and (b) the outstanding
principal balance at the date of origination of the loan of any senior mortgage
loan(s) or, in the case of any open-ended senior mortgage loan, the maximum
available line of credit with respect to the mortgage loan, regardless of any
lesser amount actually outstanding at the date of origination of the loan, to
(ii) the Collateral Value of the related Property. The "Collateral Value" of the
Property, other than with respect to certain loans the proceeds of which were
used to refinance an existing mortgage loan (each, a "Refinance Loan"), will be
calculated as described in the prospectus supplement, but if there is no
description in the prospectus supplement, it is the lesser of (a) the appraised
value determined in an appraisal obtained by the originator at origination of
the loan and (b) the sales price for the Property. In the case of Refinance
Loans, the "Collateral Value" of the related Property will be calculated as
described in the prospectus supplement, but if there is no description in the
prospectus supplement, it is generally the appraised value thereof determined in
an appraisal obtained at the time of refinancing.

     We can give no assurance that values of the Properties have remained or
will remain at their levels on the dates of origination of the related loans. If
the residential real estate market should experience an overall decline in
property values such that the outstanding principal balances of the loans, and
any secondary financing on the Properties, in a particular pool become equal to
or greater than the value of the Properties, the actual rates of delinquencies,
foreclosures and losses could be higher than those now generally experienced in
the mortgage lending industry. In addition, adverse economic conditions and
other factors (which may or may not affect real property values) may affect the
timely payment by borrowers of scheduled payments of principal and interest on
the


                                       18



loans and, accordingly, the actual rates of delinquencies, foreclosures and
losses with respect to any pool. To the extent that the losses are not covered
by subordination provisions or alternative arrangements, the losses will be
borne, at least in part, by the holders of the securities of the related series.

SUBSTITUTION OF TRUST FUND ASSETS

     Substitution of Trust Fund Assets will be permitted in the event of
breaches of representations and warranties with respect to any original Trust
Fund Asset or in the event the documentation with respect to any Trust Fund
Asset is determined by the trustee to be incomplete. The period during which the
substitution will be permitted generally will be indicated in the related
prospectus supplement. The related prospectus supplement will describe any other
conditions upon which Trust Fund Assets may be substituted for Trust Fund Assets
initially included in the Trust Fund.

AVAILABLE INFORMATION

     The depositor has filed with the SEC a Registration Statement under the
Securities Act of 1933, as amended (the "Securities Act"), covering the
securities. This prospectus, which forms a part of the Registration Statement,
and the prospectus supplement relating to each series of securities contain
summaries of the material terms of the documents referred to in this prospectus
and in the prospectus supplement, but do not contain all of the information in
the Registration Statement pursuant to the rules and regulations of the SEC. For
further information, reference is made to the Registration Statement and its
exhibits. The Registration Statement and exhibits can be inspected and copied at
prescribed rates at the public reference facilities maintained by the SEC at its
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The SEC maintains an Internet Web site that contains
reports, information statements and other information regarding the registrants
that file electronically with the SEC, including the depositor. The address of
that Internet Web site is http://www.sec.gov. The depositor's SEC Securities Act
file number is 333-125164.

     This prospectus and any applicable prospectus supplement do not constitute
an offer to sell or a solicitation of an offer to buy any securities other than
the securities offered by this prospectus and the prospectus supplement nor an
offer of the securities to any person in any state or other jurisdiction in
which the offer would be unlawful.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE; REPORTS FILED WITH THE SEC

     All documents filed for the trust fund referred to in the accompanying
prospectus supplement after the date of this prospectus and before the end of
the related offering with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated by reference in this prospectus and are a part of this prospectus
from the date of their filing. Any statement contained in a document
incorporated by reference in this prospectus is modified or superseded for all
purposes of this prospectus to the extent that a statement contained in this
prospectus (or in the accompanying prospectus supplement) or in any other
subsequently filed document that also is incorporated by reference differs from
that statement. Any statement so modified or superseded shall not, except as so
modified or superseded, constitute a part of this prospectus.

     The depositor or master servicer on behalf of the trust fund of the related
series will file the reports required under the Securities Act and under Section
13(a), 13(c), 14 or 15(d) of the Exchange Act. These reports include (but are
not limited to):

o    Reports on Form 8-K (Current Report), following the issuance of the series
     of securities of the related trust fund, including as Exhibits to the Form
     8-K (1) the agreements or other documents specified in the related
     prospectus supplement, if applicable, (2) the Detailed Description, if
     applicable, regarding the related Trust Fund Assets and (3) the opinions
     related to the tax consequences and the legality of the series being issued
     required to be filed under applicable securities laws;


                                       19



o    Reports on Form 8-K (Current Report), following the occurrence of events
     specified in Form 8-K requiring disclosure, which are required to be filed
     within the time-frame specified in Form 8-K related to the type of event;

o    Reports on Form 10-D (Asset-Backed Issuer Distribution Report), containing
     the distribution and pool performance information required on Form 10-D,
     which are required to be filed 15 days following the distribution date
     specified in the related prospectus supplement; and

o    Report on Form 10-K (Annual Report), containing the items specified in Form
     10-K with respect to a fiscal year and filing or furnishing, as
     appropriate, the required exhibits.

     Neither the depositor nor the master servicer intends to file with the SEC
any reports required under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
with respect to a trust fund following completion of the reporting period
required by Rule 15d-1 or Regulation 15D under the Securities Exchange Act of
1934. Unless specifically stated in the report, the reports and any information
included in the report will neither be examined nor reported on by an
independent public accountant. Each trust fund formed by the depositor will have
a separate file number assigned by the SEC, which unless otherwise specified in
the related prospectus supplement is not available until filing of the final
prospectus supplement related to the series. Reports filed with respect to a
trust fund with the SEC after the final prospectus supplement is filed will be
available under trust fund's specific number, which will be a series number
assigned to the file number of the depositor shown above.

     The trustee on behalf of any trust fund will provide without charge to each
person to whom this prospectus is delivered, on the person's written request, a
copy of any or all of the documents referred to above that have been or may be
incorporated by reference in this prospectus (not including exhibits to the
information that is incorporated by reference unless the exhibits are
specifically incorporated by reference into the information that this prospectus
incorporates) and any reports filed with the SEC. Requests should be directed to
the corporate trust office of the trustee specified in the accompanying
prospectus supplement.

REPORTS TO SECURITYHOLDERS

     The distribution and pool performance reports filed on Form 10-D will be
forwarded to each securityholder as specified in the related prospectus
supplement. See "Description of the Securities -- Reports to Securityholders."
All other reports filed with the SEC concerning the trust fund will be forwarded
to securityholders free of charge upon written request to the trustee on behalf
of any trust fund, but will not be made available through a Web site of the
depositor, the master servicer or any other party as these reports and exhibits
can be inspected and copied at prescribed rates at the public reference
facilities maintained by the SEC and can also be viewed electronically at the
Internet Web site of the SEC shown above under "-- Available Information."

                                 USE OF PROCEEDS

     The net proceeds to be received from the sale of the securities will be
applied by the depositor to the purchase of Trust Fund Assets or will be used by
the depositor for general corporate purposes. The depositor expects to sell
securities in series from time to time, but the timing and amount of offerings
of securities will depend on a number of factors, including the volume of Trust
Fund Assets acquired by the depositor, prevailing interest rates, availability
of funds and general market conditions.

                                  THE DEPOSITOR

     CWABS, Inc., a Delaware corporation (the "depositor"), was incorporated in
August 1996 for the limited purpose of acquiring, owning and transferring Trust
Fund Assets and selling interests in them or bonds secured by them. The
depositor is a limited purpose finance subsidiary of Countrywide Financial
Corporation, a Delaware corporation. The depositor maintains its principal
office at 4500 Park Granada, Calabasas, California 91302. Its telephone number
is (818) 225-3000.


                                       20



     The depositor's obligations after issuance of the securities include
delivery of the Trust Fund Assets and certain related documents and instruments,
repurchasing Trust Fund Assets in the event of certain breaches of
representations or warranties made by the depositor, providing tax-related
information to the Trustee and maintaining the trustee's first priority
perfected security interest in the Trust Fund Assets.

     Neither the depositor nor any of the depositor's affiliates will insure or
guarantee distributions on the securities of any series.

                                  LOAN PROGRAM

     The loans will have been purchased by the depositor, either directly or
through affiliates, from sellers. The applicable prospectus supplement may
provide for the underwriting criteria used in originating the loans, but if it
does not, the loans so acquired by the depositor will have been originated in
accordance with the underwriting criteria specified below under "Underwriting
Standards."

UNDERWRITING STANDARDS

     The applicable prospectus supplement may provide for the seller's
representations and warranties relating to the loans, but if it does not, each
seller will represent and warrant that all loans originated and/or sold by it to
the depositor or one of its affiliates will have been underwritten in accordance
with standards consistent with those utilized by mortgage lenders generally
during the period of origination for similar types of loans. As to any loan
insured by the FHA or partially guaranteed by the VA, the seller will represent
that it has complied with underwriting policies of the FHA or the VA, as the
case may be.

     Underwriting standards are applied by or on behalf of a lender to evaluate
the borrower's credit standing and repayment ability, and the value and adequacy
of the related Property as collateral. In general, a prospective borrower
applying for a loan is required to fill out a detailed application designed to
provide to the underwriting officer pertinent credit information, including the
principal balance and payment history with respect to any senior mortgage, if
any. The applicable prospectus supplement may specify whether that credit
information will be verified by the seller, but if it does not, the credit
information supplied by the borrower will be verified by the related seller. As
part of the description of the borrower's financial condition, the borrower
generally is required to provide a current list of assets and liabilities and a
statement of income and expenses, as well as an authorization to apply for a
credit report which summarizes the borrower's credit history with local
merchants and lenders and any record of bankruptcy. In most cases, an employment
verification is obtained from an independent source (typically the borrower's
employer) which verification reports, among other things, the length of
employment with that organization and the borrower's current salary. If a
prospective borrower is self-employed, the borrower may be required to submit
copies of signed tax returns. The borrower may also be required to authorize
verification of deposits at financial institutions where the borrower has demand
or savings accounts.

     In determining the adequacy of the property to be used as collateral, an
appraisal will generally be made of each property considered for financing.
Except as described in the prospectus supplement, an appraiser is generally
required to inspect the property, issue a report on its condition and, if
applicable, verify construction, if new, has been completed. The appraisal is
generally based on the market value of comparable homes, the estimated rental
income (if considered applicable by the appraiser) and the cost of replacing the
home. The value of the property being financed, as indicated by the appraisal,
must be such that it currently supports, and is anticipated to support in the
future, the outstanding loan balance.

     The maximum loan amount will vary depending upon a borrower's credit grade
and loan program but will not generally exceed $1,000,000. Variations in maximum
loan amount limits will be permitted based on compensating factors. Compensating
factors may generally include, to the extent specified in the related prospectus
supplement, low loan-to-value ratio, low debt-to-income ratio, stable
employment, favorable credit history and the nature of the underlying first
mortgage loan, if applicable.

     Each seller's underwriting standards will generally permit loans with
loan-to-value ratios at origination of up to 100% depending on the loan program,
type and use of the property, creditworthiness of the borrower and debt-


                                       21



to-income ratio. If so specified in the related prospectus supplement, a
seller's underwriting criteria may permit loans with loan-to-value ratios at
origination in excess of 100%, such as for debt consolidation or home
improvement purposes. Loan-to-value ratios may not be evaluated in the case of
Title I loans.

     After obtaining all applicable employment, credit and property information,
the related seller will use a debt-to-income ratio to assist in determining
whether the prospective borrower has sufficient monthly income available to
support the payments of principal and interest on the mortgage loan in addition
to other monthly credit obligations. The "debt-to-income ratio" is the ratio of
the borrower's total monthly payments to the borrower's gross monthly income.
The maximum monthly debt-to-income ratio will vary depending upon a borrower's
credit grade and loan program but will not generally exceed 55%. Variations in
the monthly debt-to-income ratio limit will be permitted based on compensating
factors to the extent specified in the related prospectus supplement.

     In the case of a loan secured by a leasehold interest in real property, the
title to which is held by a third party lessor, the applicable prospectus
supplement may provide for the related representations and warranties of the
seller, but if it does not, the related seller will represent and warrant, among
other things, that the remaining term of the lease and any sublease is at least
five years longer than the remaining term on the loan.

     Certain of the types of loans that may be included in a trust fund are
recently developed and may involve additional uncertainties not present in
traditional types of loans. For example, certain of those loans may provide for
escalating or variable payments by the borrower. These types of loans are
underwritten on the basis of a judgment that the borrowers have the ability to
make the monthly payments required initially. In some instances, a borrower's
income may not be sufficient to permit continued loan payments as the payments
increase. These types of loans may also be underwritten primarily upon the basis
of Loan-to-Value Ratios or other favorable credit factors.

QUALIFICATIONS OF SELLERS

     Each seller must be an institution experienced in originating and servicing
loans of the type contained in the related pool and must maintain satisfactory
facilities to originate and service (either directly or through qualified
subservicers) those loans. If a seller does not meet the foregoing
qualifications, the related originator must satisfy those qualifications.

REPRESENTATIONS BY SELLERS; REPURCHASES

     Each seller will have made representations and warranties in respect of the
loans sold by the seller and evidenced by all, or a part, of a series of
securities. The representations and warranties may include, among other things:

o    that a lender's policy of title insurance (or in the case of Properties
     located in areas where those policies are generally not available, an
     attorney's certificate of title) or a commitment to issue the policy was
     effective on the date of origination of each loan, other than cooperative
     loans and certain home equity loans, and that each policy (or certificate
     of title as applicable) remained in effect on the applicable cut-off date;

o    that the seller had good title to each loan and each loan was subject to no
     valid offsets, defenses or counterclaims except to the extent that any
     buydown agreement may forgive certain indebtedness of a borrower;

o    that each loan is secured by a valid lien on, or a perfected security
     interest with respect to, the Property (subject only to permissible liens
     disclosed, if applicable, title insurance exceptions, if applicable, and
     certain other exceptions described in the Agreement) and that, to the
     seller's knowledge, the Property was free of material damage;

o    that there were no delinquent tax or assessment liens against the Property;


                                       22



o    that no payment of a principal and interest on a loan was delinquent more
     than the number of days specified in the related prospectus supplement; and

o    that each loan at the time it was originated and on the date of transfer by
     the seller to the depositor complied in all material respects with all
     applicable local, state and federal laws.

If so specified in the related prospectus supplement, the representations and
warranties of a seller in respect of a loan will be made not as of the cut-off
date but as of the date on which the seller sold the loan to the depositor or
one of its affiliates. Under those circumstances, a substantial period of time
may have elapsed between the sale date and the date of initial issuance of the
series of securities evidencing an interest in the loan. Since the
representations and warranties of a seller do not address events that may occur
following the sale of a loan by the seller, its repurchase obligation described
below will not arise if the relevant event that would otherwise have given rise
to the repurchase obligation with respect to a loan occurs after the date of
sale of the loan by the seller to the depositor or its affiliates. However, the
depositor will not include any loan in the trust fund for any series of
securities if anything has come to the depositor's attention that would cause it
to believe that the representations and warranties of a seller will not be
accurate and complete in all material respects in respect of the loan as of the
date of initial issuance of the related series of securities. If the master
servicer is also a seller of loans with respect to a particular series of
securities, those representations will be in addition to the representations and
warranties made by the master servicer in its capacity as a master servicer.

     The master servicer or the trustee, if the master servicer is the seller,
will promptly notify the relevant seller of any breach of any representation or
warranty made by it in respect of a loan which materially and adversely affects
the interests of the securityholders in the loan. If the seller cannot cure the
breach within 90 days following notice from the master servicer or the trustee,
as the case may be, the applicable prospectus supplement may provide for the
seller's obligations under those circumstances, but if it does not, then the
seller will be obligated either

o    to repurchase the loan from the trust fund at a price (the "Purchase
     Price") equal to 100% of the unpaid principal balance thereof as of the
     date of the repurchase plus accrued interest thereon to the first day of
     the month following the month of repurchase at the Loan Rate (less any
     Advances or amount payable as related servicing compensation if the seller
     is the master servicer) or

o    substitute for the loan a replacement loan that satisfies the criteria
     specified in the related prospectus supplement.

If a REMIC election is to be made with respect to a trust fund, the applicable
prospectus supplement may provide for the obligations of the master servicer or
residual certificateholder, but if it does not, the master servicer or a holder
of the related residual certificate generally will be obligated to pay any
prohibited transaction tax which may arise in connection with any repurchase or
substitution and the trustee must have received a satisfactory opinion of
counsel that the repurchase or substitution will not cause the trust fund to
lose its status as a REMIC or otherwise subject the trust fund to a prohibited
transaction tax. The master servicer may be entitled to reimbursement for that
payment from the assets of the related trust fund or from any holder of the
related residual certificate. See "Description of the Securities -- General."
Except in those cases in which the master servicer is the seller, the master
servicer will be required under the applicable Agreement to enforce this
obligation for the benefit of the trustee and the holders of the securities,
following the practices it would employ in its good faith business judgment were
it the owner of the loan. This repurchase or substitution obligation will
constitute the sole remedy available to holders of securities or the trustee for
a breach of representation by a seller.

     Neither the depositor nor the master servicer (unless the master servicer
is the seller) will be obligated to purchase or substitute a loan if a seller
defaults on its obligation to do so, and we can give no assurance that sellers
will carry out their respective repurchase or substitution obligations with
respect to loans. However, to the extent that a breach of a representation and
warranty of a seller may also constitute a breach of a representation made by
the master servicer, the master servicer may have a repurchase or substitution
obligation as described below under "The Agreements -- Assignment of Trust Fund
Assets."


                                       23



                                STATIC POOL DATA

     If specified in the related prospectus supplement, static pool data with
respect to the delinquency, cumulative loss and prepayment data for Countrywide
Home Loans, Inc. ("Countrywide Home Loans") or any other person specified in the
related prospectus supplement will be made available through a Web site. The
prospectus supplement related to each series for which the static pool data is
provided through a Web site will contain the Web site address to obtain this
information. Except as stated below, the static pool data provided through any
Web site will be deemed part of this prospectus and the registration statement
of which this prospectus is a part from the date of the related prospectus
supplement.

     Notwithstanding the foregoing, the following information shall not be
deemed part of the prospectus or the registration statement of which this
prospectus is a part:

o    with respect to information regarding prior securitized pools of
     Countrywide Home Loans (or the applicable person specified in the related
     prospectus supplement) that do not include the currently offered pool,
     information regarding prior securitized pools that were established before
     January 1, 2006; and

o    with respect to information regarding the pool described in the related
     prospectus supplement, information about the pool for periods before
     January 1, 2006.

     Static pool data may also be provided in the related prospectus supplement
or may be provided in the form of a CD-ROM accompanying the related prospectus
supplement. The related prospectus supplement will specify how the static pool
data will be presented.

                          DESCRIPTION OF THE SECURITIES

     Each series of certificates will be issued pursuant to separate Agreements.
A form of Pooling and Servicing Agreement has been filed as an exhibit to the
Registration Statement of which this prospectus forms a part. Each Pooling and
Servicing Agreement will be dated as of the related cut-off date, will be among
the depositor, the master servicer and the trustee for the benefit of the
holders of the securities of the related series. Each series of notes will be
issued pursuant to an indenture (the "Indenture") between the related trust fund
and the entity named in the related prospectus supplement as trustee with
respect to the related series, and the related loans will be serviced by the
master servicer pursuant to a Sale and Servicing Agreement. Each Indenture will
be dated as of the cut-off date and the Trust Fund Assets will be pledged to the
related trustee for the benefit of the holders of the securities of the related
series.

     A form of Indenture and Sale and Servicing Agreement has been filed as an
exhibit to the Registration Statement of which this prospectus forms a part. A
series of securities may consist of both notes and certificates. The provisions
of each Agreement will vary depending upon the nature of the securities to be
issued thereunder and the nature of the related trust fund. The following are
descriptions of the material provisions which may appear in each Agreement. The
descriptions are subject to, and are qualified in their entirety by reference
to, all of the provisions of the Agreement for each series of securities and the
applicable prospectus supplement. The depositor will provide a copy of the
Agreement (without exhibits) relating to any series without charge upon written
request of a holder of record of a security of that series addressed to CWABS,
Inc., 4500 Park Granada, Calabasas, California 91302, Attention: Secretary.

GENERAL

     The securities of each series will be issued in book-entry or fully
registered form, in the authorized denominations specified in the related
prospectus supplement, will, in the case of certificates, evidence specified
beneficial ownership interests in, and in the case of notes, be secured by, the
assets of the related trust fund created pursuant to the related Agreement and
will not be entitled to payments in respect of the assets included in any other
trust fund established by the depositor. The applicable prospectus supplement
may provide for guarantees or insurance obtained from a governmental entity or
other person, but if it does not, the Trust Fund Assets will not be


                                       24



guaranteed or insured by any governmental entity or other person. Each trust
fund will consist of, to the extent provided in the related Agreement,

o    the Trust Fund Assets, as from time to time are subject to the related
     Agreement (exclusive of any amounts specified in the related prospectus
     supplement ("Retained Interest")), including all payments of interest and
     principal received with respect to the loans after the cut-off date (to the
     extent not applied in computing the principal balance of the loans as of
     the cut-off date (the "Cut-off Date Principal Balance"));

o    the assets required to be deposited in the related Security Account from
     time to time;

o    property which secured a loan and which is acquired on behalf of the
     securityholders by foreclosure or deed in lieu of foreclosure and

o    any insurance policies or other forms of credit enhancement required to be
     maintained pursuant to the related Agreement.

If so specified in the related prospectus supplement, a trust fund may also
include one or more of the following: reinvestment income on payments received
on the Trust Fund Assets, a reserve fund, a mortgage pool insurance policy, a
special hazard insurance policy, a bankruptcy bond, one or more letters of
credit, a surety bond, guaranties or similar instruments.

     Each series of securities will be issued in one or more classes. Each class
of certificates of a series will evidence beneficial ownership of a specified
percentage (which may be 0%) or portion of future interest payments and a
specified percentage (which may be 0%) or portion of future principal payments
on, and each class of notes of a series will be secured by, the related Trust
Fund Assets. A series of securities may include one or more classes that are
senior in right to payment to one or more other classes of securities of that
series. Certain series or classes of securities may be covered by insurance
policies, surety bonds or other forms of credit enhancement, in each case as
described under "Credit Enhancement" herein and in the related prospectus
supplement. One or more classes of securities of a series may be entitled to
receive distributions of principal, interest or any combination thereof.
Distributions on one or more classes of a series of securities may be made prior
to one or more other classes, after the occurrence of specified events, in
accordance with a schedule or formula or on the basis of collections from
designated portions of the related Trust Fund Assets, in each case as specified
in the related prospectus supplement. The timing and amounts of the
distributions may vary among classes or over time as specified in the related
prospectus supplement.

     Distributions of principal and interest (or, where applicable, of principal
only or interest only) on the related securities will be made by the trustee on
each distribution date (i.e., monthly, quarterly, semi-annually or at the other
intervals and on the dates as are specified in the related prospectus
supplement) in proportion to the percentages specified in the related prospectus
supplement. Distributions will be made to the persons in whose names the
securities are registered at the close of business on the dates specified in the
related prospectus supplement (each, a "Record Date"). Distributions will be
made in the manner specified in the related prospectus supplement to the persons
entitled thereto at the address appearing in the register maintained for holders
of securities (the "Security Register"); provided, however, that the final
distribution in retirement of the securities will be made only upon presentation
and surrender of the securities at the office or agency of the trustee or other
person specified in the notice to securityholders of the final distribution.

     The securities will be freely transferable and exchangeable at the
Corporate Trust Office of the trustee as set forth in the related prospectus
supplement. No service charge will be made for any registration of exchange or
transfer of securities of any series, but the trustee may require payment of a
sum sufficient to cover any related tax or other governmental charge.

     Certain Issues Related to the Suitability of Investments in the Securities
for Holders. Under current law the purchase and holding by or on behalf of any
employee benefit plan or other retirement arrangement subject to provisions of
the Employee Retirement Income Security Act of 1974, as amended, or the Code of
certain classes of certificates may result in "prohibited transactions" within
the meaning of ERISA and the Code. See "ERISA


                                       25



Considerations." Retirement arrangements subject to these provisions include
individual retirement accounts and annuities, Keogh plans and collective
investment funds in which the plans, accounts or arrangements are invested. The
applicable prospectus supplement may specify other conditions under which
transfers of this type would be permitted, but if it does not, transfer of the
certificates will not be registered unless the transferee represents that it is
not, and is not purchasing on behalf of, a plan, account or other retirement
arrangement or provides an opinion of counsel satisfactory to the trustee and
the depositor that the purchase of the certificates by or on behalf of a plan,
account or other retirement arrangement is permissible under applicable law and
will not subject the trustee, the master servicer or the depositor to any
obligation or liability in addition to those undertaken in the pooling and
servicing agreement.

     As to each series, an election may be made to treat the related trust fund
or designated portions thereof as one or more "real estate mortgage investment
conduits" ("REMICs") as defined in the Code. The related prospectus supplement
will specify whether one or more REMIC elections are to be made. Alternatively,
the Agreement for a series may provide that one or more REMIC elections may be
made at the discretion of the depositor or the master servicer and may only be
made if certain conditions are satisfied. The terms and provisions applicable to
the making of a REMIC election for each related series, if applicable, will be
set forth in the related prospectus supplement. If one or more REMIC elections
are made with respect to a series, one of the classes will be designated as
evidencing the sole class of "residual interests" in the related REMIC, as
defined in the Code. All other classes of securities in the series will
constitute "regular interests" in the related REMIC or REMICs, as applicable, as
defined in the Code. As to each series with respect to which one or more REMIC
elections are to be made, the master servicer or a holder of the related
residual certificate will be obligated to take all actions required in order to
comply with applicable laws and regulations and will be obligated to pay any
prohibited transaction taxes. Unless otherwise provided in the related
prospectus supplement, the master servicer will be entitled to reimbursement if
it makes any prohibited transaction tax payment from the assets of the trust
fund or from any holder of the related residual certificate. Unless otherwise
specified in the related prospectus supplement, if the amounts distributable to
related residual certificates are insufficient to cover the amount of any
prohibited transaction taxes, the amount necessary to reimburse the master
servicer may be deducted from the amounts otherwise payable to the other classes
of certificates of the series.

DISTRIBUTIONS ON SECURITIES

     General. In general, the method of determining the amount of distributions
on a particular series of securities will depend on the type of credit support,
if any, that is used with respect to the related series. See "Credit
Enhancement." Set forth below are descriptions of various methods that may be
used to determine the amount of distributions on the securities of a particular
series. The prospectus supplement for each series of securities will describe
the method to be used in determining the amount of distributions on the
securities of the related series.

     Distributions allocable to principal and interest on the securities will be
made by the trustee out of, and only to the extent of, funds in the related
Security Account, including any funds transferred from any reserve fund or the
pre-funding account. As between securities of different classes and as between
distributions of principal (and, if applicable, between distributions of
Principal Prepayments, as defined below, and scheduled payments of principal)
and interest, distributions made on any distribution date will be applied as
specified in the related prospectus supplement. The prospectus supplement will
also describe the method for allocating distributions among securities of a
particular class, but if the prospectus supplement does not, distributions to
any class of securities will be made pro rata to all securityholders of that
class.

     Available Funds. All distributions on the securities of each series on each
distribution date will be made from the Available Funds described below, in
accordance with the terms described in the related prospectus supplement and
specified in the Agreement. The applicable prospectus supplement may define
Available Funds with references to different accounts or different amounts, but
if it does not, "Available Funds" for each distribution date will generally
equal the amount on deposit in the related Security Account on that distribution
date (net of related fees and expenses payable by the related trust fund) other
than amounts to be held therein for distribution on future distribution dates.

     Distributions of Interest. Interest will accrue on the aggregate principal
balance of the securities (or, in the case of securities entitled only to
distributions allocable to interest, the aggregate notional amount) of each
class of


                                       26



securities (the "Class Security Balance") entitled to interest from the date, at
the Pass-Through Rate or interest rate, as applicable (which in either case may
be a fixed rate or rate adjustable as specified in the related prospectus
supplement), and for the periods specified in the related prospectus supplement.
To the extent funds are available therefor, interest accrued during each
specified period on each class of securities entitled to interest (other than a
class of securities that provides for interest that accrues, but is not
currently payable) will be distributable on the distribution dates specified in
the related prospectus supplement until the aggregate Class Security Balance of
the securities of that class has been distributed in full or, in the case of
securities entitled only to distributions allocable to interest, until the
aggregate notional amount of those securities is reduced to zero or for the
period of time designated in the related prospectus supplement. The original
Class Security Balance of each security will equal the aggregate distributions
allocable to principal to which the security is entitled. The applicable
prospectus supplement may specify some other basis for these distributions, but
if it does not, distributions allocable to interest on each security that is not
entitled to distributions allocable to principal will be calculated based on the
notional amount of the security. The notional amount of a security will not
evidence an interest in or entitlement to distributions allocable to principal
but will be used solely for convenience in expressing the calculation of
interest and for certain other purposes.

     Interest payable on the securities of a series on a distribution date will
include all interest accrued during the period specified in the related
prospectus supplement. In the event interest accrues over a period ending two or
more days prior to a distribution date, the effective yield to securityholders
will be reduced from the yield that would otherwise be obtainable if interest
payable on the security were to accrue through the day immediately preceding
that distribution date, and the effective yield (at par) to securityholders will
be less than the indicated coupon rate.

     With respect to any class of accrual securities, if specified in the
related prospectus supplement, any interest that has accrued but is not paid on
a given distribution date will be added to the aggregate Class Security Balance
of that class of securities on that distribution date. The applicable prospectus
supplement may specify some other basis for these distributions, but if it does
not, distributions of interest on any class of accrual securities will commence
only after the occurrence of the events specified in the related prospectus
supplement. Prior to that time, in the aggregate Class Security Balance of the
class of accrual securities will increase on each distribution date by the
amount of interest that accrued during the preceding interest accrual period but
that was not required to be distributed to the class on that distribution date.
Thereafter the class of accrual securities accrue interest on its outstanding
Class Security Balance as so adjusted.

     Distributions of Principal. The related prospectus supplement will specify
the method by which the amount of principal to be distributed on the securities
on each distribution date will be calculated and the manner in which the amount
will be allocated among the classes of securities entitled to distributions of
principal. The aggregate Class Security Balance of any class of securities
entitled to distributions of principal generally will be the aggregate original
Class Security Balance of the class of securities specified in the prospectus
supplement,

o    reduced by all distributions reported to the holders of the class of
     securities as allocable to principal,

o    in the case of accrual securities, in general, increased by all interest
     accrued but not then distributable on the accrual securities;

o    in the case of adjustable rate securities, subject to the effect of
     negative amortization, if applicable; and

o    if specified in the related prospectus supplement, reduced by the amount of
     any losses allocated to the Class Security Balance of the class of
     securities.

     If so provided in the related prospectus supplement, one or more classes of
securities will be entitled to receive all or a disproportionate percentage of
the payments of principal which are received from borrowers in advance of their
scheduled due dates and are not accompanied by amounts representing scheduled
interest due after the month in which the payment is made ("Principal
Prepayments") in the percentages and under the circumstances or for the periods
specified in the prospectus supplement. The effect of this allocation of
Principal Prepayments to the class or classes of securities will be to
accelerate the amortization of those securities while increasing the interests
evidenced by one or more other classes of securities in the trust fund.
Increasing the interests of the other


                                       27



classes of securities relative to that of certain securities is intended to
preserve the availability of the subordination provided by the securities for
which the interests have been increased. See "Credit Enhancement --
Subordination."

     Unscheduled Distributions. If specified in the related prospectus
supplement, the securities will be subject to receipt of distributions before
the next scheduled distribution date under the circumstances and in the manner
described below and in the prospectus supplement. If applicable, the trustee
will be required to make unscheduled distributions on the day and in the amount
specified in the related prospectus supplement if, due to substantial payments
of principal (including Principal Prepayments) on the Trust Fund Assets, the
trustee or the master servicer determines that the funds available or
anticipated to be available from the Security Account and, if applicable, any
reserve fund, may be insufficient to make required distributions on the
securities on that distribution date. The applicable prospectus supplement may
provide for limits on the amount of an unscheduled distribution, but if it does
not, the amount of any unscheduled distribution that is allocable to principal
will not exceed the amount that would otherwise have been required to be
distributed as principal on the securities on the next distribution date. The
applicable prospectus supplement may specify whether the unscheduled
distribution will include interest, but if it does not, the unscheduled
distributions will include interest at the applicable Pass-Through Rate (if any)
or interest rate (if any) on the amount of the unscheduled distribution
allocable to principal for the period and to the date specified in the
prospectus supplement.

ADVANCES

     To the extent provided in the related prospectus supplement, the master
servicer will be required to advance on or before each distribution date (from
its own funds, funds advanced by sub-servicers or funds held in the Security
Account for future distributions to the holders of securities of the related
series), an amount equal to the aggregate of payments of interest and/or
principal that were delinquent on the related Determination Date (as the term is
defined in the related prospectus supplement) and were not advanced by any
sub-servicer, subject to the master servicer's determination that the advances
may be recoverable out of late payments by borrowers, Liquidation Proceeds,
Insurance Proceeds or otherwise. In the case of cooperative loans, the master
servicer also may be required to advance any unpaid maintenance fees and other
charges under the related proprietary leases as specified in the related
prospectus supplement.

     In making advances, the master servicer will endeavor to maintain a regular
flow of scheduled interest and principal payments to holders of the securities,
rather than to guarantee or insure against losses. If advances are made by the
master servicer from cash being held for future distribution to securityholders,
the master servicer will replace those funds on or before any future
distribution date to the extent that funds in the applicable Security Account on
the future distribution date would be less than the amount required to be
available for distributions to securityholders on that distribution date. Any
master servicer funds advanced will be reimbursable to the master servicer out
of recoveries on the specific loans with respect to which the advances were made
(e.g., late payments made by the related borrower, any related Insurance
Proceeds, Liquidation Proceeds or proceeds of any loan purchased by the
depositor, a sub-servicer or a seller pursuant to the related Agreement).
Advances by the master servicer (and any advances by a sub-servicer) also will
be reimbursable to the master servicer (or sub-servicer) from cash otherwise
distributable to securityholders (including the holders of Senior securities) to
the extent that the master servicer determines that the advance or advances
previously made are not ultimately recoverable as described above. To the extent
provided in the related prospectus supplement, the master servicer also will be
obligated to make advances, to the extent recoverable out of Insurance Proceeds,
Liquidation Proceeds or otherwise, in respect of certain taxes and insurance
premiums not paid by borrowers on a timely basis. Funds so advanced are
reimbursable to the master servicer to the extent permitted by the related
Agreement. The obligations of the master servicer to make advances may be
supported by a cash advance reserve fund, a surety bond or other arrangement of
the type described herein under "Credit Enhancement," in each case as described
in the related prospectus supplement.

     In the event the master servicer or a sub-servicer fails to make a required
advance, the applicable prospectus supplement may specify whether another party
will have advancing obligations, but if it does not, the trustee will be
obligated to make the advance in its capacity as successor servicer. If the
trustee makes an advance, it will be entitled to be reimbursed for the advance
to the same extent and degree as the master servicer or a sub-servicer is
entitled to be reimbursed for advances. See "Description of the Securities --
Distributions on Securities."


                                       28



REPORTS TO SECURITYHOLDERS

     Prior to or concurrently with each distribution on a distribution date the
master servicer or the trustee will furnish to each securityholder of record of
the related series a statement setting forth, to the extent applicable to the
related series of securities, among other things:

o    the amount of the distribution allocable to principal, separately
     identifying the aggregate amount of any Principal Prepayments and if so
     specified in the related prospectus supplement, any applicable prepayment
     charges included therein;

o    the amount of the distribution allocable to interest;

o    the amount of any advance;

o    the aggregate amount (a) otherwise allocable to the holders of Subordinate
     Securities on the distribution date, and (b) withdrawn from the reserve
     fund or the pre-funding account, if any, that is included in the amounts
     distributed to the Senior Securityholders;

o    the outstanding principal balance or notional amount of each class of the
     related series after giving effect to the distribution of principal on the
     distribution date;

o    the percentage of principal payments on the loans (excluding prepayments),
     if any, which each class of the related securities will be entitled to
     receive on the following distribution date;

o    the percentage of Principal Prepayments on the loans, if any, which each
     class of the related securities will be entitled to receive on the
     following distribution date;

o    the related amount of the servicing compensation retained or withdrawn from
     the Security Account by the master servicer, and the amount of additional
     servicing compensation received by the master servicer attributable to
     penalties, fees, excess Liquidation Proceeds and other similar charges and
     items;

o    the number and aggregate principal balances of loans (A) delinquent
     (exclusive of loans in foreclosure) 1 to 30 days, 31 to 60 days, 61 to 90
     days and 91 or more days and (B) in foreclosure and delinquent 1 to 30
     days, 31 to 60 days, 61 to 90 days and 91 or more days, as of the close of
     business on the last day of the calendar month preceding the distribution
     date;

o    the book value of any real estate acquired through foreclosure or grant of
     a deed in lieu of foreclosure;

o    the Pass-Through Rate or interest rate, as applicable, if adjusted from the
     date of the last statement, of each class of the related series expected to
     be applicable to the next distribution to the class;

o    if applicable, the amount remaining in any reserve fund or the pre-funding
     account at the close of business on the distribution date;

o    the Pass-Through Rate or interest rate, as applicable, as of the day prior
     to the immediately preceding distribution date; and

o    any amounts remaining under letters of credit, pool policies or other forms
     of credit enhancement.

     Where applicable, any amount set forth above may be expressed as a dollar
amount per single security of the relevant class having the percentage interest
specified in the related prospectus supplement. The report to


                                       29



securityholders for any series of securities may include additional or other
information of a similar nature to that specified above.

     In addition, within a reasonable period of time after the end of each
calendar year, the master servicer or the trustee will mail to each
securityholder of record at any time during the related calendar year a report
(a) as to the aggregate of amounts reported pursuant to the first two items
above for the related calendar year or, in the event the person was a
securityholder of record during a portion of that calendar year, for the
applicable portion of the year and (b) other customary information as may be
deemed necessary or desirable for securityholders to prepare their tax returns.

CATEGORIES OF CLASSES OF SECURITIES

     The securities of any series may be comprised of one or more classes. These
classes, in general, fall into different categories. The following chart
identifies and generally defines certain of the more typical categories. The
prospectus supplement for a series of securities may identify the classes which
comprise the related series by reference to the following categories.

         CATEGORIES OF CLASSES                          DEFINITIONS
---------------------------------------   --------------------------------------

                                                      PRINCIPAL TYPES

Accretion Directed.....................   A class that receives principal
                                          payments from the accreted interest
                                          from specified Accrual classes. An
                                          accretion directed class also may
                                          receive principal payments from
                                          principal paid on the underlying Trust
                                          Fund Assets for the related series.

Companion Class........................   A class that receives principal
                                          payments on any distribution date only
                                          if scheduled payments have been made
                                          on specified planned principal
                                          classes, targeted principal classes or
                                          scheduled principal classes.

Component Securities...................   A class consisting of "components."
                                          The components of a class of component
                                          securities may have different
                                          principal and/or interest payment
                                          characteristics but together
                                          constitute a single class. Each
                                          component of a class of component
                                          securities may be identified as
                                          falling into one or more of the
                                          categories in this chart.

Non-Accelerated Senior or NAS..........   A class that, for the period of time
                                          specified in the related prospectus
                                          supplement, generally will not receive
                                          (in other words, is locked out of) (1)
                                          principal prepayments on the
                                          underlying Trust Fund Assets that are
                                          allocated disproportionately to the
                                          senior securities because of the
                                          shifting interest structure of the
                                          securities in the trust and/or (2)
                                          scheduled principal payments on the
                                          underlying Trust Fund Assets, as
                                          specified in the related prospectus
                                          supplement. During the lock-out
                                          period, the portion of the principal
                                          distributions on the underlying Trust
                                          Fund Assets that the NAS class is
                                          locked out of will be distributed to
                                          the other classes of senior
                                          securities.

Notional Amount Securities.............   A class having no principal balance
                                          and bearing interest on the related
                                          notional amount. The notional amount
                                          is used for purposes of the
                                          determination of interest
                                          distributions.

Planned Principal Class or PACs........   A class that is designed to receive
                                          principal payments using a
                                          predetermined principal balance
                                          schedule derived by assuming two
                                          constant prepayment rates for the
                                          underlying Trust Fund Assets. These
                                          two rates are the endpoints for the
                                          "structuring range" for the planned


                                       30



         CATEGORIES OF CLASSES                          DEFINITIONS
---------------------------------------   --------------------------------------

                                          principal class. The planned principal
                                          classes in any series of certificates
                                          may be subdivided into different
                                          categories (e.g., primary planned
                                          principal classes, secondary planned
                                          principal classes and so forth) having
                                          different effective structuring ranges
                                          and different principal payment
                                          priorities. The structuring range for
                                          the secondary planned principal class
                                          of a series of certificates will be
                                          narrower than that for the primary
                                          planned principal class of the series.

Scheduled Principal Class..............   A class that is designed to receive
                                          principal payments using a
                                          predetermined principal balance
                                          schedule but is not designated as a
                                          Planned Principal Class or Targeted
                                          Principal Class. In many cases, the
                                          schedule is derived by assuming two
                                          constant prepayment rates for the
                                          underlying Trust Fund Assets. These
                                          two rates are the endpoints for the
                                          "structuring range" for the scheduled
                                          principal class.

Sequential Pay.........................   Classes that receive principal
                                          payments in a prescribed sequence,
                                          that do not have predetermined
                                          principal balance schedules and that
                                          under all circumstances receive
                                          payments of principal continuously
                                          from the first distribution date on
                                          which they receive principal until
                                          they are retired. A single class that
                                          receives principal payments before or
                                          after all other classes in the same
                                          series of securities may be identified
                                          as a sequential pay class.

Strip..................................   A class that receives a constant
                                          proportion, or "strip," of the
                                          principal payments on the underlying
                                          Trust Fund Assets.

Super Senior...........................   A class that will not bear its
                                          proportionate share of realized losses
                                          (other than excess losses) as its
                                          share is directed to another class,
                                          referred to as the "support class"
                                          until the class principal balance of
                                          the support class is reduced to zero.

Support Class..........................   A class that absorbs the realized
                                          losses other than excess losses that
                                          would otherwise be allocated to a
                                          Super Senior Class (or would not
                                          otherwise be allocated to the Senior
                                          Class) after the related Classes of
                                          subordinate securities are no longer
                                          outstanding.

Targeted Principal Class or TACs.......   A class that is designed to receive
                                          principal payments using a
                                          predetermined principal balance
                                          schedule derived by assuming a single
                                          constant prepayment rate for the
                                          underlying Trust Fund Assets.

                                                     INTEREST TYPES

Fixed Rate.............................   A class with an interest rate that is
                                          fixed throughout the life of the
                                          class.

Floating Rate or Adjustable Rate ......   A class with an interest rate that
                                          resets periodically based upon a
                                          designated index and that varies
                                          directly with changes in the index.

Inverse Floating Rate..................   A class with an interest rate that
                                          resets periodically based upon a
                                          designated index and that varies
                                          inversely with changes in the index.

Variable Rate..........................   A class with an interest rate that
                                          resets periodically and is calculated
                                          by reference to the rate or rates of
                                          interest applicable to specified
                                          assets or


                                       31



         CATEGORIES OF CLASSES                          DEFINITIONS
---------------------------------------   --------------------------------------

                                          instruments (e.g., the Loan Rates
                                          borne by the underlying loans).

Interest Only..........................   A class that receives some or all of
                                          the interest payments made on the
                                          underlying Trust Fund Assets and
                                          little or no principal. Interest Only
                                          classes have either a nominal
                                          principal balance or a notional
                                          amount. A nominal principal balance
                                          represents actual principal that will
                                          be paid on the class. It is referred
                                          to as nominal since it is extremely
                                          small compared to other classes. A
                                          notional amount is the amount used as
                                          a reference to calculate the amount of
                                          interest due on an Interest Only class
                                          that is not entitled to any
                                          distributions in respect of principal.

Principal Only.........................   A class that does not bear interest
                                          and is entitled to receive only
                                          distributions in respect of principal.

Partial Accrual........................   A class that accretes a portion of the
                                          amount of accrued interest thereon,
                                          which amount will be added to the
                                          principal balance of the class on each
                                          applicable distribution date, with the
                                          remainder of the accrued interest to
                                          be distributed currently as interest
                                          on the Partial Accrual class. This
                                          accretion may continue until a
                                          specified event has occurred or until
                                          the Partial Accrual class is retired.

Accrual................................   A class that accretes the amount of
                                          accrued interest otherwise
                                          distributable on the Accrual class,
                                          which amount will be added as
                                          principal to the principal balance of
                                          the Accrual class on each applicable
                                          distribution date. This accretion may
                                          continue until some specified event
                                          has occurred or until the Accrual
                                          class is retired.

Callable...............................   A class that is redeemable or
                                          terminable when 25% or more of the
                                          original principal balance of the
                                          mortgage loans held in the trust fund
                                          is outstanding.

     Other types of securities that may be issued include classes that are
entitled to receive only designated portions of the collections on the Trust
Fund Assets (i.e. prepayment charges) or excess cashflow from all or designated
portions of the Trust Fund Assets (sometimes referred to as "residual classes").

INDICES APPLICABLE TO FLOATING RATE AND INVERSE FLOATING RATE CLASSES

LIBOR

     The applicable prospectus supplement may specify some other basis for
determining LIBOR, but if it does not, on the LIBOR determination date (as
defined in the related prospectus supplement) for each class of certificates of
a series for which the applicable interest rate is determined by reference to an
index denominated as LIBOR, the person designated in the related pooling and
servicing agreement as the calculation agent will determine LIBOR in accordance
with one of the two methods described below (which method will be specified in
the related prospectus supplement):

LIBO Method

     Unless otherwise specified in the related prospectus supplement, if using
this method to calculate LIBOR, the calculation agent will determine LIBOR on
the basis of the rate for U.S. dollar deposits for the period specified in the
prospectus supplement that appears on Telerate Screen Page 3750 as of 11:00 a.m.
(London time) on the interest determination date (as defined in the related
prospectus supplement). If the rate does not appear on the Telerate Screen Page
3750 (or any page that may replace the page on that service, or if this service
is no longer


                                       32



offered, another service for displaying LIBOR or comparable rates as may be
reasonably selected by the calculation agent), LIBOR for the applicable accrual
period will be the Reference Bank Rate.

     "Reference Bank Rate" with respect to any accrual period, means

     (a) the arithmetic mean (rounded upwards, if necessary, to the nearest
whole multiple of 0.03125%) of the offered rates for United States dollar
deposits for one month that are quoted by the reference banks as of 11:00 a.m.,
New York City time, on the related interest determination date to prime banks in
the London interbank market, provided that at least two reference banks provide
the rate; and

     (b) If fewer than two offered rates appear, the Reference Bank Rate will be
the arithmetic mean (rounded upwards, if necessary, to the nearest whole
multiple of 0.03125%) of the rates quoted by one or more major banks in New York
City, selected by the calculation agent, as of 11:00 a.m., New York City time,
on the related interest determination date for loans in U.S. dollars to leading
European banks.

     Each reference bank will be a leading bank engaged in transactions in
Eurodollar deposits in the international Eurocurrency market; will not control,
be controlled by, or be under common control with the depositor, Countrywide
Home Loans or the master servicer; and will have an established place of
business in London. If a reference bank should be unwilling or unable to act as
a reference bank or if appointment of a reference bank is terminated, another
leading bank meeting the criteria specified above will be appointed.

     If these quotations cannot be obtained by the calculation agent and no
Reference Bank Rate is available, LIBOR will be LIBOR applicable to the
preceding interest accrual period.

BBA Method

     If using this method of determining LIBOR, the calculation agent will
determine LIBOR on the basis of the British Bankers' Association "Interest
Settlement Rate" for one-month deposits in United States dollars as found on
Telerate page 3750 as of 11:00 a.m. London time on each LIBOR determination
date. Interest Settlement Rates currently are based on rates quoted by eight
British Bankers' Association designated banks as being, in the view of the
banks, the offered rate at which deposits are being quoted to prime banks in the
London interbank market. The Interest Settlement Rates are calculated by
eliminating the two highest rates and the two lowest rates, averaging the four
remaining rates, carrying the result (expressed as a percentage) out to six
decimal places, and rounding to five decimal places.

     If on any LIBOR determination date, the calculation agent is unable to
calculate LIBOR in accordance with the method set forth in the immediately
preceding paragraph, LIBOR for the next interest accrual period shall be
calculated in accordance with the LIBOR method described under "LIBO Method."

     The establishment of LIBOR on each LIBOR determination date by the
calculation agent and its calculation of the rate of interest for the applicable
classes for the related interest accrual period shall (in the absence of
manifest error) be final and binding.

COFI

     The Eleventh District Cost of Funds Index is designed to represent the
monthly weighted average cost of funds for savings institutions in Arizona,
California and Nevada that are member institutions of the Eleventh Federal Home
Loan Bank District (the "Eleventh District"). The Eleventh District Cost of
Funds Index for a particular month reflects the interest costs paid on all types
of funds held by Eleventh District member institutions and is calculated by
dividing the cost of funds by the average of the total amount of those funds
outstanding at the end of that month and of the prior month and annualizing and
adjusting the result to reflect the actual number of days in the particular
month. If necessary, before these calculations are made, the component figures
are adjusted by the Federal Home Loan Bank of San Francisco ("FHLBSF") to
neutralize the effect of events such as member institutions leaving the Eleventh
District or acquiring institutions outside the Eleventh District. The Eleventh
District Cost of Funds Index is weighted to reflect the relative amount of each
type of funds held at the end of the


                                       33



relevant month. The major components of funds of Eleventh District member
institutions are: savings deposits, time deposits, FHLBSF advances, repurchase
agreements and all other borrowings. Because the component funds represent a
variety of maturities whose costs may react in different ways to changing
conditions, the Eleventh District Cost of Funds Index does not necessarily
reflect current market rates.

     A number of factors affect the performance of the Eleventh District Cost of
Funds Index, which may cause it to move in a manner different from indices tied
to specific interest rates, such as United States Treasury bills or LIBOR.
Because the liabilities upon which the Eleventh District Cost of Funds Index is
based were issued at various times under various market conditions and with
various maturities, the Eleventh District Cost of Funds Index may not
necessarily reflect the prevailing market interest rates on new liabilities of
similar maturities. Moreover, as stated above, the Eleventh District Cost of
Funds Index is designed to represent the average cost of funds for Eleventh
District savings institutions for the month prior to the month in which it is
due to be published. Additionally, the Eleventh District Cost of Funds Index may
not necessarily move in the same direction as market interest rates at all
times, since as longer term deposits or borrowings mature and are renewed at
prevailing market interest rates, the Eleventh District Cost of Funds Index is
influenced by the differential between the prior and the new rates on those
deposits or borrowings. In addition, movements of the Eleventh District Cost of
Funds Index, as compared to other indices tied to specific interest rates, may
be affected by changes instituted by the FHLBSF in the method used to calculate
the Eleventh District Cost of Funds Index.

     The FHLBSF publishes the Eleventh District Cost of Funds Index in its
monthly Information Bulletin. Any individual may request regular receipt by mail
of Information Bulletins by writing the Federal Home Loan Bank of San Francisco,
P.O. Box 7948, 600 California Street, San Francisco, California 94120, or by
calling (415) 616-1000. The Eleventh District Cost of Funds Index may also be
obtained by calling the FHLBSF at (415) 616-2600.

     The FHLBSF has stated in its Information Bulletin that the Eleventh
District Cost of Funds Index for a month "will be announced on or near the last
working day" of the following month and also has stated that it "cannot
guarantee the announcement" of the index on an exact date. So long as the
Eleventh District Cost of Funds Index for a month is announced on or before the
tenth day of the second following month, the interest rate for each class of
securities of a series as to which the applicable interest rate is determined by
reference to an index denominated as COFI (each, a class of "COFI securities")
for the Interest Accrual Period commencing in the second following month will be
based on the Eleventh District Cost of Funds Index for the second preceding
month. If publication is delayed beyond the tenth day, the interest rate will be
based on the Eleventh District Cost of Funds Index for the third preceding
month.

     The applicable prospectus supplement may specify some other basis for
determining COFI, but if it does not, then if on the tenth day of the month in
which any interest accrual period commences for a class of COFI securities the
most recently published Eleventh District Cost of Funds Index relates to a month
before the third preceding month, the index for the current interest accrual
period and for each succeeding interest accrual period will, except as described
in the next to last sentence of this paragraph, be based on the National Monthly
Median Cost of Funds Ratio to SAIF-Insured Institutions (the "National Cost of
Funds Index") published by the Office of Thrift Supervision (the "OTS") for the
third preceding month (or the fourth preceding month if the National Cost of
Funds Index for the third preceding month has not been published on the tenth
day of an interest accrual period). Information on the National Cost of Funds
Index may be obtained by writing the OTS at 1700 G Street, N.W., Washington,
D.C. 20552 or calling (202) 906-6677, and the current National Cost of Funds
Index may be obtained by calling (202) 906-6988. If on the tenth day of the
month in which an interest accrual period commences the most recently published
National Cost of Funds Index relates to a month before the fourth preceding
month, the applicable index for the interest accrual period and each succeeding
interest accrual period will be based on LIBOR, as determined by the calculation
agent in accordance with the Agreement relating to the series of certificates. A
change of index from the Eleventh District Cost of Funds Index to an alternative
index will result in a change in the index level and could increase its
volatility, particularly if LIBOR is the alternative index.

     The establishment of COFI by the calculation agent and its calculation of
the rates of interest for the applicable classes for the related interest
accrual period shall (in the absence of manifest error) be final and binding.


                                       34



Treasury Index

     The applicable prospectus supplement may specify some other basis for
determining and defining the Treasury index, but if it does not, on the Treasury
index determination date for each class of securities of a series for which the
applicable interest rate is determined by reference to an index denominated as a
Treasury index, the calculation agent will ascertain the Treasury index for
Treasury securities of the maturity and for the period (or, if applicable, date)
specified in the related prospectus supplement. The Treasury index for any
period means the average of the yield for each business day during the specified
period (and for any date means the yield for the date), expressed as a per annum
percentage rate, on U.S. Treasury securities adjusted to the "constant maturity"
specified in the prospectus supplement or if no "constant maturity" is so
specified, U.S. Treasury securities trading on the secondary market having the
maturity specified in the prospectus supplement, in each case as published by
the Federal Reserve Board in its Statistical Release No. H.15 (519). Statistical
Release No. H.15 (519) is published on Monday or Tuesday of each week and may be
obtained by writing or calling the Publications Department at the Board of
Governors of the Federal Reserve System, 21st and C Streets, Washington, D.C.
20551 (202) 452-3244. If the calculation agent has not yet received Statistical
Release No. H.15 (519) for a week, then it will use the Statistical Release from
the preceding week.

     Yields on U.S. Treasury securities at "constant maturity" are derived from
the U.S. Treasury's daily yield curve. This curve, which relates the yield on a
security to its time to maturity, is based on the closing market bid yields on
actively traded Treasury securities in the over-the-counter market. These market
yields are calculated from composites of quotations reported by five leading
U.S. Government securities dealers to the Federal Reserve Bank of New York. This
method provides a yield for a given maturity even if no security with that exact
maturity is outstanding. In the event that the Treasury Index is no longer
published, a new index based upon comparable data and methodology will be
designated in accordance with the Agreement relating to the particular series of
securities. The Calculation Agent's determination of the Treasury Index, and its
calculation of the rates of interest for the applicable classes for the related
Interest Accrual Period shall (in the absence of manifest error) be final and
binding.

Prime Rate

     The applicable prospectus supplement may specify the party responsible for
determining the Prime Rate, but if it does not, on the Prime Rate Determination
Date (as the term is defined in the related prospectus supplement) for each
class of securities of a series as to which the applicable interest rate is
determined by reference to an index denominated as the Prime Rate, the
calculation agent will ascertain the Prime Rate for the related interest accrual
period. The applicable prospectus supplement may provide for the means of
determining the Prime Rate, but if it does not, the Prime Rate for an interest
accrual period will be the "Prime Rate" as published in the "Money Rates"
section of The Wall Street Journal (or if not so published, the "Prime Rate" as
published in a newspaper of general circulation selected by the calculation
agent in its sole discretion) on the related Prime Rate Determination Date. If a
prime rate range is given, then the average of that range will be used. In the
event that the Prime Rate is no longer published, a new index based upon
comparable data and methodology will be designated in accordance with the
Agreement relating to the particular series of securities. The calculation
agent's determination of the Prime Rate and its calculation of the rates of
interest for the related interest accrual period shall (in the absence of
manifest error) be final and binding.

BOOK-ENTRY REGISTRATION OF SECURITIES

     As described in the related prospectus supplement, if not issued in fully
registered certificated form, each class of securities will be registered as
book-entry certificates (the "Book-Entry Securities"). Persons acquiring
beneficial ownership interests in the Book-Entry Securities ("Security Owners")
may elect to hold their Book-Entry Securities through the Depository Trust
Company ("DTC") in the United States, or Clearstream, Luxembourg or the
Euroclear System ("Euroclear"), in Europe, if they are participants of those
systems, or indirectly through organizations which are participants in those
systems. Each class of the Book-Entry Securities will be issued in one or more
certificates which equal the aggregate principal balance of the applicable class
of the Book-Entry Securities and will initially be registered in the name of
Cede & Co., the nominee of DTC. Clearstream, Luxembourg and Euroclear will hold
omnibus positions on behalf of their participants through customers' securities
accounts in Clearstream, Luxembourg and Euroclear's names on the books of their
respective depositaries which in turn will hold the positions in customers'
securities accounts in the depositaries' names on the books of DTC. Citibank, NA


                                       35



will act as depositary for Clearstream, Luxembourg and JPMorgan Chase will act
as depositary for Euroclear (in those capacities, individually the "Relevant
Depositary" and collectively the "European Depositaries"). Unless otherwise
described in the related prospectus supplement, beneficial interests in the
Book-Entry Securities may be held in minimum denominations representing
Certificate Principal Balances of $20,000 and integral multiples of $1,000 in
excess thereof, except that one investor of each class of Book-Entry Securities
may hold a beneficial interest therein that is not an integral multiple of
$1,000. Except as described below, no person acquiring a beneficial ownership
interest in a Book-Entry Security (each, a "beneficial owner") will be entitled
to receive a physical certificate representing the person's beneficial ownership
interest in the Book-Entry Security (a "Definitive Security"). Unless and until
Definitive Securities are issued, it is anticipated that the only
securityholders of the Book-Entry Securities will be Cede & Co., as nominee of
DTC. Security Owners will not be Certificateholders as that term is used in the
applicable Agreement. Security Owners are only permitted to exercise their
rights indirectly through the participating organizations that utilize the
services of DTC, including securities brokers and dealers, banks and trust
companies and clearing corporations and certain other organizations
("Participants") and DTC.

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

     Security Owners will receive all distributions of principal of, and
interest on, the Book-Entry Securities from the trustee through DTC and DTC
Participants. While the Book-Entry Securities are outstanding (except under the
circumstances described below), under the rules, regulations and procedures
creating and affecting DTC and its operations (the "Rules"), DTC is required to
make book-entry transfers among Participants on whose behalf it acts with
respect to the Book-Entry Securities and is required to receive and transmit
distributions of principal of, and interest on, the Book-Entry Securities.
Participants and organizations which have indirect access to the DTC system,
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants"), with whom Security Owners have accounts
with respect to the Book-Entry Securities are similarly required to make
book-entry transfers and receive and transmit the distributions on behalf of
their respective Security Owners. Accordingly, although Security Owners will not
possess certificates, the Rules provide a mechanism by which Security Owners
will receive distributions and will be able to transfer their interest.

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

     Because of time zone differences, credits of securities received in
Clearstream, Luxembourg or Euroclear as a result of a transaction with a
Participant will be made during, subsequent securities settlement processing and
dated the business day following, the DTC settlement date. These credits or any
transactions in the securities received in Clearstream, Luxembourg or Euroclear
as a result of a transaction with a Participant, settled during the processing
will be reported to the relevant Euroclear or Clearstream, Luxembourg
Participants on that following business day. Cash received in Clearstream,
Luxembourg or Euroclear, as a result of sales of securities by or through a
Clearstream, Luxembourg Participant or Euroclear Participant to a DTC
Participant, will be received with value on the DTC settlement date but will be
available in the relevant Clearstream, Luxembourg or Euroclear cash account only
as of the business day following settlement in DTC.


                                       36



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

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

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

     Clearstream Banking, societe anonyme, 67 Bd Grande-Duchesse Charlotte,
L-2967 Luxembourg ("Clearstream, Luxembourg"), was incorporated in 1970 as
"Clearstream, Luxembourg S.A." a company with limited liability under Luxembourg
law (a societe anonyme). Clearstream, Luxembourg S.A. subsequently changed its
name to Cedelbank. On January 10, 2000, Cedelbank's parent company, Clearstream,
Luxembourg International, societe anonyme ("CI") merged its clearing, settlement
and custody business with that of Deutsche Borse Clearing AG ("DBC"). The merger
involved the transfer by CI of substantially all of its assets and liabilities
(including its shares in CB) to a new Luxembourg company, New Clearstream,
Luxembourg International, societe anonyme ("New CI"), which is 50% owned by CI
and 50% owned by DBC's parent company Deutsche Borse AG. The shareholders of
these two entities are banks, securities dealers and financial institutions.
Clearstream, Luxembourg International currently has 92 shareholders, including
U.S. financial institutions or their subsidiaries. No single entity may own more
than 5 percent of Clearstream, Luxembourg International's stock.

     Further to the merger, the Board of Directors of New CI decided to re-name
the companies in the group in order to give them a cohesive brand name. The new
brand name that was chosen is "Clearstream" effective as of January 14, 2000.
New CI has been renamed "Clearstream International, societe anonyme." On January
18, 2000, Cedelbank was renamed "Clearstream Banking, societe anonyme" and
Clearstream, Luxembourg Global Services was renamed "Clearstream Services,
societe anonyme."

     On January 17, 2000, DBC was renamed "Clearstream Banking AG." This means
that there are now two entities in the corporate group headed by Clearstream
International which share the name "Clearstream Banking," the entity previously
named "Cedelbank" and the entity previously named "Deutsche Borse Clearing AG."

     Clearstream, Luxembourg holds securities for its customers and facilitates
the clearance and settlement of securities transactions between Clearstream,
Luxembourg customers through electronic book-entry changes in accounts of
Clearstream, Luxembourg customers, thereby eliminating the need for physical
movement of certificates. Transactions may be settled by Clearstream, Luxembourg
in any of 36 currencies, including United States Dollars. Clearstream,
Luxembourg provides to its customers, among other things, services for
safekeeping, administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. Clearstream, Luxembourg also
deals with domestic securities markets in over 30 countries through established
depository and custodial relationships. Clearstream, Luxembourg is registered as
a bank in Luxembourg and is subject to regulation by the Commission de
Surveillance du Secteur Financier, "CSSF," which supervises Luxembourg banks.
Clearstream, Luxembourg's customers are world-wide financial institutions
including underwriters, securities brokers and dealers, banks, trust companies
and clearing corporations. Clearstream, Luxembourg's U.S. customers are limited
to securities brokers and dealers, and banks. Currently, Clearstream,


                                       37



Luxembourg has approximately 2,000 customers located in over 80 countries,
including all major European countries, Canada, and the United States. Indirect
access to Clearstream, Luxembourg is available to other institutions that clear
through or maintain a custodial relationship with an account holder of
Clearstream, Luxembourg. Clearstream, Luxembourg has established an electronic
bridge with Euroclear Bank S.A./ N.V. as the Operator of the Euroclear System
(the "Euroclear Operator") in Brussels to facilitate settlement of trades
between Clearstream, Luxembourg and the Euroclear Operator.

     Euroclear was created in 1968 to hold securities for participants of
Euroclear ("Euroclear Participants") and to clear and settle transactions
between Euroclear Participants through simultaneous electronic book-entry
delivery against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities and
cash. Transactions may now be settled in any of 32 currencies, including United
States dollars. Euroclear includes various other services, including securities
lending and borrowing and interfaces with domestic markets in several countries
generally similar to the arrangements for cross-market transfers with DTC
described above. Euroclear is operated by the Brussels, Belgium office of the
Euroclear Operator, under contract with Euroclear Clearance Systems S.C., a
Belgian cooperative corporation (the "Cooperative"). All operations are
conducted by the Euroclear Operator, and all Euroclear securities clearance
accounts and Euroclear cash accounts are accounts with the Euroclear Operator,
not the Cooperative. The Cooperative establishes policy for Euroclear on behalf
of Euroclear Participants. Euroclear Participants include banks (including
central banks), securities brokers and dealers and other professional financial
intermediaries. Indirect access to Euroclear is also available to other firms
that clear through or maintain a custodial relationship with a Euroclear
Participant, either directly or indirectly.

     The Euroclear Operator has a banking license from the Belgian Banking and
Finance Commission. This license authorizes the Euroclear Operator to carry out
banking activities on a global basis.

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

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

     Under a book-entry format, beneficial owners of the Book-Entry Securities
may experience some delay in their receipt of payments, since the payments will
be forwarded by the trustee to Cede & Co. Distributions with respect to
Book-Entry Securities held through Clearstream, Luxembourg or Euroclear will be
credited to the cash accounts of Clearstream, Luxembourg Participants or
Euroclear Participants in accordance with the relevant system's rules and
procedures, to the extent received by the Relevant Depositary. These
distributions will be subject to tax reporting in accordance with relevant
United States tax laws and regulations. See "Material Federal Income Tax
Consequences -- Tax Treatment of Foreign Investors" and "-- Tax Consequences to
Holders of the Notes -- Backup Withholding" herein. Because DTC can only act on
behalf of Financial Intermediaries, the ability of a beneficial owner to pledge
Book-Entry Securities to persons or entities that do not participate in the
depository system, or otherwise take actions in respect of Book-Entry
Securities, may be limited due to the lack of physical certificates for the
Book-Entry Securities. In addition, issuance of the Book-Entry Securities in
book-entry form may reduce the liquidity of the securities in the secondary
market since certain potential investors may be unwilling to purchase securities
for which they cannot obtain physical certificates.


                                       38



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

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

     Definitive Securities will be issued to beneficial owners of the Book-Entry
Securities, or their nominees, rather than to DTC, only if (a) DTC or the
depositor advises the trustee in writing that DTC is no longer willing,
qualified or able to discharge properly its responsibilities as nominee and
depositary with respect to the Book-Entry Securities and the depositor or the
trustee is unable to locate a qualified successor or (b) after the occurrence of
an Event of Default, beneficial owners having not less than 51% of the voting
rights evidenced by the Book-Entry Securities advise the trustee and DTC through
the Financial Intermediaries and the DTC participants in writing that the
continuation of a book-entry system through DTC (or a successor thereto) is no
longer in the best interests of beneficial owners of that class.

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

     Although DTC, Clearstream, Luxembourg and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of securities among
participants of DTC, Clearstream, Luxembourg and Euroclear, they are under no
obligation to perform or continue to perform these procedures and these
procedures may be discontinued at any time.

     None of the master servicer, the depositor or the trustee will have any
responsibility for any aspect of the records relating to or payments made on
account of beneficial ownership interests of the Book-Entry Securities held by
Cede & Co., as nominee of DTC, or for maintaining, supervising or reviewing any
records relating to the beneficial ownership interests.

                               CREDIT ENHANCEMENT

GENERAL

     Credit enhancement may be provided with respect to one or more classes of a
series of securities or with respect to the related Trust Fund Assets. Credit
enhancement may be in the form of:

          o    the subordination of one or more classes of the securities of the
               series,

          o    letter of credit,

          o    a limited financial guaranty policy issued by an entity named in
               the related prospectus supplement,


                                       39



          o    surety bond,

          o    bankruptcy bond,

          o    special hazard insurance policy,

          o    guaranteed investment contract,

          o    overcollateralization,

          o    one or more reserve funds,

          o    a mortgage pool insurance policy,

          o    FHA Insurance,

          o    a VA Guarantee,

          o    cross-collateralization feature, or

          o    any combination of the foregoing.

     The applicable prospectus supplement may provide for credit enhancement
which covers all the classes of securities, but if it does not, credit
enhancement will not provide protection against all risks of loss and will not
guarantee repayment of the entire principal balance of the securities and
interest thereon. If losses occur which exceed the amount covered by credit
enhancement or which are not covered by the credit enhancement, securityholders
will bear their allocable share of any deficiencies.

SUBORDINATION

     If so specified in the related prospectus supplement, protection afforded
to holders of one or more classes of securities of a series by means of the
subordination feature may be accomplished by the preferential right of holders
of one or more other classes of the series (the "Senior Securities") to
distributions in respect of scheduled principal, Principal Prepayments, interest
or any combination thereof that otherwise would have been payable to holders of
subordinate securities (the "Subordinate Securities") under the circumstances
and to the extent specified in the related prospectus supplement. Protection may
also be afforded to the holders of Senior Securities of a series by: (i)
reducing the principal or notional balance (if applicable) of the related
subordinate securities; (ii) a combination of the immediately preceding sentence
and clause (i) above; or (iii) as otherwise described in the related prospectus
supplement. If so specified in the related prospectus supplement, delays in
receipt of scheduled payments on the loans and losses on defaulted loans may be
borne first by the various classes of subordinate securities and thereafter by
the various classes of Senior Securities, in each case under the circumstances
and subject to the limitations specified in the related prospectus supplement.
The aggregate distributions in respect of delinquent payments on the loans over
the lives of the securities or at any time, the aggregate losses in respect of
defaulted loans which must be borne by the Subordinate Securities by virtue of
subordination and the amount of the distributions otherwise distributable to the
holders of Subordinate Securities that will be distributable to Senior
Securityholders on any distribution date may be limited as specified in the
related prospectus supplement. If aggregate distributions in respect of
delinquent payments on the loans or aggregate losses in respect of the loans
were to exceed an amount specified in the related prospectus supplement, holders
of Senior Securities would experience losses on the securities.

     In addition to or in lieu of the foregoing, if so specified in the related
prospectus supplement, all or any portion of distributions otherwise payable to
holders of Subordinate Securities on any distribution date may instead be
deposited into one or more reserve funds established with the trustee or
distributed to holders of Senior


                                       40



Securities. The deposits to a reserve fund may be made on each distribution
date, for specified periods or until the balance in the reserve fund has reached
a specified amount and, following payments from the reserve fund to holders of
Senior Securities or otherwise, thereafter to the extent necessary to restore
the balance in the reserve fund to required levels, in each case as specified in
the related prospectus supplement. Amounts on deposit in the reserve fund may be
released to the holders of certain classes of securities at the times and under
the circumstances specified in the related prospectus supplement.

     If specified in the related prospectus supplement, various classes of
Senior Securities and Subordinate Securities may themselves be subordinate in
their right to receive certain distributions to other classes of Senior and
Subordinate Securities, respectively, through preferential rights of those
classes of securities to distributions in respect to the other classes of Senior
Securities and Subordinate Securities, a cross-collateralization mechanism or
otherwise.

     As between classes of Senior Securities and as between classes of
Subordinate Securities, distributions may be allocated among those classes (i)
in the order of their scheduled final distribution dates, (ii) in accordance
with a schedule or formula, (iii) in relation to the occurrence of events, or
(iv) otherwise, in each case as specified in the related prospectus supplement.
As between classes of Subordinate Securities, payments to holders of Senior
Securities on account of delinquencies or losses and payments to any reserve
fund will be allocated as specified in the related prospectus supplement.

LETTER OF CREDIT

     The letter of credit, if any, with respect to a series of securities will
be issued by the bank or financial institution specified in the related
prospectus supplement (the "L/C Bank"). Under the letter of credit, the L/C Bank
will be obligated to honor drawings thereunder in an aggregate fixed dollar
amount, net of unreimbursed payments thereunder, equal to the percentage
specified in the related prospectus supplement of the aggregate principal
balance of the loans on the related cut-off date or of one or more classes of
securities (the "L/C Percentage"). If so specified in the related prospectus
supplement, the letter of credit may permit drawings in the event of losses not
covered by insurance policies or other credit support, such as losses arising
from damage not covered by standard hazard insurance policies, losses resulting
from the bankruptcy of a borrower and the application of certain provisions of
the federal Bankruptcy Code, or losses resulting from denial of insurance
coverage due to misrepresentations in connection with the origination of a loan.
The amount available under the letter of credit will, in all cases, be reduced
to the extent of the unreimbursed payments thereunder. The obligations of the
L/C Bank under the letter of credit for each series of securities will expire at
the earlier of the date specified in the related prospectus supplement or the
termination of the trust fund. See "The Agreements -- Termination: Optional
Termination." A copy of the letter of credit for a series, if any, will be filed
with the SEC as an exhibit to a Current Report on Form 8-K after the issuance of
the securities of the related series.

INSURANCE POLICIES, SURETY BONDS AND GUARANTIES

     If so provided in the prospectus supplement for a series of securities,
deficiencies in amounts otherwise payable on the securities or certain classes
thereof will be covered by insurance policies and/or surety bonds provided by
one or more insurance companies or sureties. These instruments may cover, with
respect to one or more classes of securities of the related series, timely
distributions of interest and/or full distributions of principal on the basis of
a schedule of principal distributions set forth in or determined in the manner
specified in the related prospectus supplement. In addition, if specified in the
related prospectus supplement, a trust fund may also include bankruptcy bonds,
special hazard insurance policies, other insurance or guaranties for the purpose
of (i) maintaining timely payments or providing additional protection against
losses on the assets included in the trust fund, (ii) paying administrative
expenses or (iii) establishing a minimum reinvestment rate on the payments made
in respect of the assets or principal payment rate on the assets. If specified
in the related prospectus supplement, the trust fund may include a guaranteed
investment contact pursuant to which the trust fund is entitled to receive
specified payments for a period of time. These arrangements may include
agreements under which securityholders are entitled to receive amounts deposited
in various accounts held by the trustee upon the terms specified in the related
prospectus supplement. If applicable, a copy of any instrument for a series will
be filed with the SEC as an exhibit to a Current Report on Form 8-K after the
issuance of the securities of the related series.


                                       41



OVERCOLLATERALIZATION AND EXCESS CASH FLOW

     If so provided in the prospectus supplement for a series of securities, the
aggregate principal balance of the underlying Trust Fund Assets as of the
cut-off date may exceed the principal balance of the securities being issued,
thereby resulting in overcollateralization. In addition, if so provided in the
prospectus supplement, a portion of the interest payment on each loan may be
applied as an additional distribution in respect of principal to reduce the
principal balance of a certain class or classes of securities and, thus,
accelerate the rate of payment of principal on that class or classes of
securities. Reducing the principal balance of the securities without a
corresponding reduction in the principal balance of the underlying Trust Fund
Assets will result in overcollateralization or increase the level of
overcollateralization. Additionally, some of the excess cash flow may be applied
to make distributions to holders of securities to which losses have been
allocated up to the amount of the losses that were allocated.

RESERVE ACCOUNTS

     If specified in the related prospectus supplement, credit support with
respect to a series of securities will be provided by the establishment and
maintenance with the trustee for the series of securities, in trust, of one or
more reserve funds for the series. The related prospectus supplement will
specify whether or not any reserve fund will be included in the trust fund for
the related series.

     The reserve fund for a series will be funded (i) by the deposit therein of
cash, United States Treasury securities, instruments evidencing ownership of
principal or interest payments thereon, letters of credit, demand notes,
certificates of deposit or a combination thereof in the aggregate amount
specified in the related prospectus supplement, (ii) by the deposit therein from
time to time of certain amounts, as specified in the related prospectus
supplement to which the holders of Subordinate Securities, if any, would
otherwise be entitled or (iii) or as otherwise may be specified in the related
prospectus supplement.

     Any amounts on deposit in the reserve fund and the proceeds of any other
instrument upon maturity will be held in cash or will be invested in Permitted
Investments. Any amounts so deposited and payments on instruments so deposited
will be available for withdrawal from the reserve fund for distribution to the
holders of securities of the related series for the purposes, in the manner and
at the times specified in the related prospectus supplement.

POOL INSURANCE POLICIES

     If specified in the related prospectus supplement, a separate pool
insurance policy ("Pool Insurance Policy") will be obtained for the pool and
issued by the insurer (the "Pool Insurer") named in the related prospectus
supplement. Each Pool Insurance Policy will, subject to the limitations
described below, cover loss by reason of default in payment on loans in the pool
in an amount equal to a percentage specified in the related prospectus
supplement of the aggregate principal balance of the loans on the cut-off date
which are not covered as to their entire outstanding principal balances by
Primary Mortgage Insurance Policies. As more fully described below, the master
servicer will present claims thereunder to the Pool Insurer on behalf of itself,
the trustee and the holders of the securities of the related series. The Pool
Insurance Policies, however, are not blanket policies against loss, since claims
thereunder may only be made respecting particular defaulted loans and only upon
satisfaction of certain conditions precedent described below. The applicable
prospectus supplement may provide for the extent of coverage provided by the
related Pool Insurance Policy, but if it does not, the Pool Insurance Policies
will not cover losses due to a failure to pay or denial of a claim under a
Primary Mortgage Insurance Policy.

     The applicable prospectus supplement may provide for the conditions for the
presentation of claims under a Pool Insurance Policy, but if it does not, the
Pool Insurance Policy will provide that no claims may be validly presented
unless (i) any required Primary Mortgage Insurance Policy is in effect for the
defaulted loan and a claim thereunder has been submitted and settled; (ii)
hazard insurance on the related Property has been kept in force and real estate
taxes and other protection and preservation expenses have been paid; (iii) if
there has been physical loss or damage to the Property, it has been restored to
its physical condition (reasonable wear and tear excepted) at the time of
issuance of the policy; and (iv) the insured has acquired good and merchantable
title to the Property free and clear of liens except certain permitted
encumbrances. Upon satisfaction of these conditions, the Pool Insurer will have
the option either (a) to purchase the property securing the defaulted loan at a
price equal to the principal balance thereof plus accrued and unpaid interest at
the Loan Rate to the date of the purchase and certain expenses


                                       42



incurred by the master servicer on behalf of the trustee and securityholders, or
(b) to pay the amount by which the sum of the principal balance of the defaulted
loan plus accrued and unpaid interest at the Loan Rate to the date of payment of
the claim and the aforementioned expenses exceeds the proceeds received from an
approved sale of the Property, in either case net of certain amounts paid or
assumed to have been paid under the related Primary Mortgage Insurance Policy.
If any Property securing a defaulted loan is damaged and proceeds, if any, from
the related hazard insurance policy or the applicable special hazard insurance
policy are insufficient to restore the damaged Property to a condition
sufficient to permit recovery under the Pool Insurance Policy, the master
servicer will not be required to expend its own funds to restore the damaged
Property unless it determines that (i) the restoration will increase the
proceeds to securityholders on liquidation of the loan after reimbursement of
the master servicer for its expenses and (ii) the expenses will be recoverable
by it through proceeds of the sale of the Property or proceeds of the related
Pool Insurance Policy or any related Primary Mortgage Insurance Policy.

     The applicable prospectus supplement may provide for a Pool Insurance
Policy covering losses resulting from defaults, but if it does not, the Pool
Insurance Policy will not insure (and many Primary Mortgage Insurance Policies
do not insure) against loss sustained by reason of a default arising from, among
other things,

o    fraud or negligence in the origination or servicing of a loan, including
     misrepresentation by the borrower, the originator or persons involved in
     the origination thereof, or

o    failure to construct a Property in accordance with plans and
     specifications.

A failure of coverage attributable to one of the foregoing events might result
in a breach of the related seller's representations described above, and, might
give rise to an obligation on the part of the related seller to repurchase the
defaulted loan if the breach cannot be cured by the related seller. No Pool
Insurance Policy will cover (and many Primary Mortgage Insurance Policies do not
cover) a claim in respect of a defaulted loan occurring when the servicer of the
loan, at the time of default or thereafter, was not approved by the applicable
insurer.

     The applicable prospectus supplement may provide for a Pool Insurance
Policy featuring a fixed amount of coverage over the life of the policy, but if
it does not, the original amount of coverage under each Pool Insurance Policy
will be reduced over the life of the related securities by the aggregate dollar
amount of claims paid less the aggregate of the net amounts realized by the Pool
Insurer upon disposition of all foreclosed properties. The applicable prospectus
supplement may provide for the exclusion of specified expenses from the coverage
of the Pool Insurance Policy, but if it does not, the amount of claims paid will
include certain expenses incurred by the master servicer as well as accrued
interest on delinquent loans to the date of payment of the claim. Accordingly,
if aggregate net claims paid under any Pool Insurance Policy reach the original
policy limit, coverage under that Pool Insurance Policy will be exhausted and
any further losses will be borne by the related securityholders.

     Additionally, if specified in the related prospectus supplement, the master
servicer will maintain or cause to be maintained, as the case may be, in full
force and effect, a Primary Mortgage Insurance Policy with regard to each loan
for which coverage is required and loans designated in the related prospectus
supplement as insured by the FHA will be insured by the FHA as authorized under
the United States Housing Act of 1937, as amended. See "The Agreements -
Realization Upon Defaulted Loans" for a discussion of these types of insurance.

     In general, the master servicer will require the mortgagor or obligor on
each loan to maintain a hazard insurance policy providing for no less than the
coverage of the standard form of fire insurance policy with extended coverage
customary for the type of Property in the state in which the Property is
located. See "The Agreements - Hazard Insurance" for a description of the
coverage with respect to these policies.

FINANCIAL INSTRUMENTS

     If specified in the related prospectus supplement, the trust fund may
include one or more interest rate or currency swap arrangements or similar
financial instruments that are used to alter the payment characteristics of the
mortgage loans or the securities issued by the trust fund and whose primary
purpose is not to provide credit enhancement related to the assets in the trust
fund or the securities issued by the trust fund. The primary purpose of a
currency swap arrangement will be to convert payments to be made on the mortgage
loans or the securities issued


                                       43



by the trust fund from one currency into another currency, and the primary
purpose of an interest rate swap arrangement or other financial instrument will
be one or more of the following:

o    convert the payments on some or all of the mortgage loans from fixed to
     floating payments, or from floating to fixed, or from floating based on a
     particular interest rate index to floating based on another interest rate
     index;

o    provide payments in the event that any interest rate index related to the
     mortgage loans or the securities issued by the trust rises above or falls
     below specified levels; or

o    provide protection against interest rate changes.

     If a trust fund includes financial instruments of this type, the
instruments may be structured to be exempt from the registration requirements of
the Securities Act. If applicable, a copy of any instrument for a series will be
filed with the SEC as an exhibit to a Current Report on Form 8-K to be filed
with the SEC after the issuance of the securities of the related series.

CROSS SUPPORT

     If specified in the related prospectus supplement, the beneficial ownership
of separate groups of assets included in a trust fund may be evidenced by
separate classes of the related series of securities. Similarly, if specified in
the related prospectus supplement, certain classes of notes may be supported by
cash flow and related assets of separate group of assets from other classes of
notes. In that case, credit support may be provided by a cross support feature
that requires that distributions be made on securities evidencing a beneficial
ownership interest in, or notes supported by, other asset groups within the same
trust fund. The related prospectus supplement for a series that includes a cross
support feature will describe the manner and conditions for applying the cross
support feature.

     If specified in the related prospectus supplement, the coverage provided by
one or more forms of credit support may apply concurrently to two or more
related groups of assets included in a trust fund. If applicable, the related
prospectus supplement will identify the groups of assets in the trust fund to
which the credit support relates and the manner of determining the amount of the
coverage provided by it and of the application of the coverage to the identified
groups of assets included in the trust fund.

                  YIELD, MATURITY AND PREPAYMENT CONSIDERATIONS

     The yields to maturity and weighted average lives of the securities will be
affected primarily by the amount and timing of principal payments received on or
in respect of the Trust Fund Assets included in the related trust fund. The
original terms to maturity of the loans in a given pool will vary depending upon
the type of loans included therein. Each prospectus supplement will contain
information with respect to the type and maturities of the loans in the related
pool. The related prospectus supplement will specify the circumstances, if any,
under which the related loans will be subject to prepayment charges. The
prepayment experience on the loans in a pool will affect the weighted average
life of the related series of securities.

PREPAYMENTS ON LOANS

     The rate of prepayment on the loans cannot be predicted. Home equity loans
and home improvement loan contracts have been originated in significant volume
only during the past few years and the depositor is not aware of any publicly
available studies or statistics on the rate of prepayment of the loans.
Generally, home equity loans and home improvement loan contracts are not viewed
by borrowers as permanent financing. Accordingly, the loans may experience a
higher rate of prepayment than traditional first mortgage loans. On the other
hand, because home equity loans such as the revolving credit line loans
generally are not fully amortizing, the absence of voluntary borrower
prepayments could cause rates of principal payments lower than, or similar to,
those of traditional fully-amortizing first mortgage loans.


                                       44



     The prepayment experience of the related trust fund consisting of a pool of
a pool of home equity mortgage loans or home improvement loan contracts may be
affected by a wide variety of factors, including:

o    general economic conditions,

o    prevailing interest rate levels,

o    the availability of alternative financing,

o    homeowner mobility,

o    the amounts of, and interest rates on, the underlying senior mortgage
     loans, and

o    the use of first mortgage loans as long-term financing for home purchase
     and subordinate mortgage loans as shorter-term financing for a variety of
     purposes, including home improvement, education expenses and purchases of
     consumer durables such as automobiles.

     Accordingly, the loans may experience a higher rate of prepayment than
traditional fixed-rate mortgage loans. In addition, any future limitations on
the right of borrowers to deduct interest payments on home equity loans for
federal income tax purposes may further increase the rate of prepayments of the
loans. The enforcement of a "due-on-sale" provision (as described below) will
have the same effect as a prepayment of the related loan. See "Certain Legal
Aspects of the Loans -- Due-on-Sale Clauses."

     Collections on revolving credit line loans may vary because, among other
things, borrowers may (i) make payments during any month as low as the minimum
monthly payment for that month or, during the interest-only period for certain
revolving credit line loans and, in more limited circumstances, closed- end
loans, with respect to which an interest-only payment option has been selected,
the interest and the fees and charges for that month or (ii) make payments as
high as the entire outstanding principal balance plus accrued interest and the
fees and charges thereon. It is possible that borrowers may fail to make the
required periodic payments. In addition, collections on the loans may vary due
to seasonal purchasing and the payment habits of borrowers.

     Generally, all conventional loans will contain due-on-sale provisions
permitting the mortgagee to accelerate the maturity of the loan upon sale or
certain transfers by the borrower of the related Property. Loans insured by the
FHA, and single family loans partially guaranteed by the VA, are assumable with
the consent of the FHA and the VA, respectively. Thus, the rate of prepayments
on the loans may be lower than that of conventional loans bearing comparable
interest rates. The master servicer generally will enforce any due-on-sale or
due-on-encumbrance clause, to the extent it has knowledge of the conveyance or
further encumbrance or the proposed conveyance or proposed further encumbrance
of the Property and reasonably believes that it is entitled to do so under
applicable law; provided, however, that the master servicer will not take any
enforcement action that would impair or threaten to impair any recovery under
any related insurance policy. See "The Agreements -- Collection Procedures" and
"Certain Legal Aspects of the Loans" for a description of certain provisions of
each Agreement and certain legal developments that may affect the prepayment
experience on the loans.

     The rate of prepayments with respect to conventional mortgage loans has
fluctuated significantly in recent years. In general, with respect to fixed rate
loans, if prevailing rates fall significantly below the Loan Rates borne by the
loans, the loans are more likely to be subject to higher prepayment rates than
if prevailing interest rates remain at or above the Loan Rates. Conversely, if
prevailing interest rates rise appreciably above the Loan Rates borne by the
fixed rate loans, the loans are more likely to experience a lower prepayment
rate than if prevailing rates remain at or below the Loan Rates. However, we can
give no assurance that either will occur. As is the case with fixed rate loans,
adjustable rate loans may be subject to a greater rate of principal prepayments
in a declining interest rate environment. For example, if prevailing interest
rates fall significantly, adjustable rate loans could be subject to higher
prepayment rates than if prevailing interest rates remain constant because the
availability of fixed rate loans at lower interest rates may encourage
mortgagors to refinance their adjustable rate loans to a lower fixed interest
rate. Prepayments on the hybrid loans (loans which are fixed for a period and
then convert to adjustable rate loans)


                                       45



may differ as they approach their respective initial adjustment dates,
particularly those that require payments of interest only prior to their initial
adjustment date. However, we can give no assurance that will occur. The actual
rate of principal prepayments on the mortgage loans is influenced by a variety
of economic, tax, geographic, demographic, social, legal and other factors and
has fluctuated considerably in recent years. In addition, the rate of principal
prepayments may differ among pools of mortgage loans at any time because of
specific factors relating to the mortgage loans in the particular pool,
including, among other things, the age of the mortgage loans, the geographic
locations of the properties securing the loans, the extent of the mortgagor's
equity in the properties, and changes in the mortgagors' housing needs, job
transfers and employment status.

PREPAYMENT EFFECT ON INTEREST

     When a full prepayment is made on a loan, the borrower is charged interest
on the principal amount of the loan so prepaid only for the number of days in
the month actually elapsed up to the date of the prepayment, rather than for a
full month. The effect of prepayments in full will be to reduce the amount of
interest passed through or paid in the following month to holders of securities
because interest on the principal amount of any loan so prepaid will generally
be paid only to the date of prepayment. Partial prepayments in a given month may
be applied to the outstanding principal balances of the loans so prepaid on the
first day of the month of receipt or the month following receipt. In the latter
case, partial prepayments will not reduce the amount of interest passed through
or paid in that month. The applicable prospectus supplement may specify when
prepayments are passed through to securityholders, but if it does not, neither
full nor partial prepayments will be passed through or paid until the month
following receipt.

     If the rate at which interest is passed through or paid to the holders of
securities of a series is calculated on a loan-by-loan basis, disproportionate
principal prepayments among loans with different Loan Rates will affect the
yield on the securities. In most cases, the effective yield to securityholders
will be lower than the yield otherwise produced by the applicable Pass-Through
Rate or interest rate and purchase price, because while interest will generally
accrue on each loan from the first day of the month, the distribution of
interest will not be made earlier than the month following the month of accrual.

DELAYS IN REALIZATION ON PROPERTY; EXPENSES OF REALIZATION

     Even assuming that the Properties provide adequate security for the loans,
substantial delays could be encountered in connection with the liquidation of
defaulted loans and corresponding delays in the receipt of related proceeds by
securityholders could occur. An action to foreclose on a Property securing a
loan is regulated by state statutes and rules and is subject to many of the
delays and expenses of other lawsuits if defenses or counterclaims are
interposed, sometimes requiring several years to complete. Furthermore, in some
states an action to obtain a deficiency judgment is not permitted following a
nonjudicial sale of a property. In the event of a default by a borrower, these
restrictions among other things, may impede the ability of the master servicer
to foreclose on or sell the Property or to obtain liquidation proceeds
sufficient to repay all amounts due on the related loan. In addition, the master
servicer will be entitled to deduct from related liquidation proceeds all
expenses reasonably incurred in attempting to recover amounts due on defaulted
loans and not yet repaid, including payments to senior lienholders, legal fees
and costs of legal action, real estate taxes and maintenance and preservation
expenses.

     Liquidation expenses with respect to defaulted mortgage loans generally do
not vary directly with the outstanding principal balance of the loan at the time
of default. Therefore, assuming that a servicer took the same steps in realizing
upon a defaulted mortgage loan having a small remaining principal balance as it
would in the case of a defaulted mortgage loan having a large remaining
principal balance, the amount realized after expenses of liquidation would be
smaller as a percentage of the remaining principal balance of the small mortgage
loan than would be the case with the other defaulted mortgage loan having a
large remaining principal balance.

     Applicable state laws generally regulate interest rates and other charges,
require certain disclosures, and require licensing of certain originators and
servicers of loans. In addition, most have other laws, public policy and general
principles of equity relating to the protection of consumers, unfair and
deceptive practices and practices which may apply to the origination, servicing
and collection of the loans. Depending on the provisions of the applicable law
and the specific facts and circumstances involved, violations of these laws,
policies and principles may limit the ability of the master servicer to collect
all or part of the principal of or interest on the loans, may


                                       46



entitle the borrower to a refund of amounts previously paid and, in addition,
could subject the master servicer to damages and administrative sanctions.

OPTIONAL PURCHASE

     Under certain circumstances, the master servicer, the holders of the
residual interests in a REMIC or another person specified in the related
prospectus supplement may have the option to purchase the assets of a trust fund
thereby effecting earlier retirement of the related series of securities. See
"The Agreements -- Termination; Optional Termination".

     The relative contribution of the various factors affecting prepayment may
vary from time to time. We can give no assurance as to the rate of payment of
principal of the Trust Fund Assets at any time or over the lives of the
securities.

PREPAYMENT STANDARDS OR MODELS

     Prepayments on loans can be measured relative to a prepayment standard or
model. The prospectus supplement for a series of securities will describe the
prepayment standard or model, if any, used and may contain tables setting forth
the projected weighted average life of each class of securities of that series
and the percentage of the original principal amount of each class of securities
of that series that would be outstanding on specified distribution dates for
that series based on the assumptions stated in the prospectus supplement,
including assumptions that prepayments on the loans or underlying loans, as
applicable, included in the related trust fund are made at rates corresponding
to various percentages of the prepayment standard or model specified in the
prospectus supplement.

     We can give no assurance that prepayment of the loans or underlying loans,
as applicable, included in the related trust fund will conform to any level of
any prepayment standard or model specified in the related prospectus supplement.
The rate of principal prepayments on pools of loans is influenced by a variety
of economic, demographic, geographic, legal, tax, social and other factors.

YIELD

     The yield to an investor who purchases securities in the secondary market
at a price other than par will vary from the anticipated yield if the rate of
prepayment on the loans is actually different than the rate anticipated by the
investor at the time the securities were purchased.

     The prospectus supplement relating to a series of securities will discuss
in greater detail the effect of the rate and timing of principal payments
(including prepayments), delinquencies and losses on the yield, weighted average
lives and maturities of the securities.

                                 THE AGREEMENTS

     Set forth below is a description of the material provisions of each
Agreement which are not described elsewhere in this prospectus. The description
is subject to, and qualified in its entirety by reference to, the provisions of
each Agreement. Where particular provisions or terms used in the Agreements are
referred to, those provisions or terms are as specified in the Agreements.

ASSIGNMENT OF THE TRUST FUND ASSETS

     Assignment of the Loans. At the time of issuance of the securities of a
series, the depositor will cause the loans comprising the related trust fund to
be assigned to the trustee (or trust, in the case of a series with both notes
and certificates), without recourse, together with all principal and interest
received by or on behalf of the depositor on or with respect to the loans after
the cut-off date, other than principal and interest due on or before the cut-off
date and other than any Retained Interest specified in the related prospectus
supplement. In the case of a series with both notes and certificates, the trust
will pledge these assets to the trustee for the benefit of the holders of the
notes.


                                       47



The trustee (or trust, in the case of a series with both notes and certificates)
will, concurrently with the assignment, deliver the related securities to the
depositor in exchange for the loans. Each loan will be identified in a schedule
appearing as an exhibit to the related Pooling and Servicing Agreement or Sale
and Servicing Agreement, as applicable. The schedule will include information as
to the outstanding principal balance of each loan after application of payments
due on or before the cut-off date, as well as information regarding the Loan
Rate or APR, the maturity of the loan, the Loan-to-Value Ratios or Combined
Loan-to-Value Ratios, as applicable, at origination and certain other
information.

     In addition, the depositor will also deliver or cause to be delivered to
the trustee (or to the custodian) for each single family loan, multifamily loan
or home equity loan,

o    the mortgage note or contract endorsed without recourse in blank or to the
     order of the trustee, except that the depositor may deliver or cause to be
     delivered a lost note affidavit together with a copy of the original note
     in lieu of any original mortgage note that has been lost,

o    the mortgage, deed of trust or similar instrument (a "Mortgage") with
     evidence of recording indicated thereon (except for any Mortgage not
     returned from the public recording office, in which case the depositor will
     deliver or cause to be delivered a copy of the Mortgage together with a
     certificate that the original of the Mortgage was delivered to the
     recording office),

o    an assignment of the Mortgage to the trustee, which assignment will be in
     recordable form in the case of a Mortgage assignment, and

o    any other security documents, including those relating to any senior
     interests in the Property, as may be specified in the related prospectus
     supplement or the related Pooling and Servicing Agreement or Sale and
     Servicing Agreement.

The applicable prospectus supplement may provide other arrangements for assuring
the priority of assignments, but if it does not, the seller, the depositor or
the trustee, as specified in the related Pooling and Servicing Agreement or Sale
and Servicing Agreement, will promptly cause the assignments of the related
loans to be recorded in the appropriate public office for real property records,
except in states in which, in the opinion of counsel acceptable to the trustee,
the recording is not required to protect the trustee's or the
certificateholder's interest.

     With respect to any loans that are cooperative loans, the depositor will
cause to be delivered to the trustee the related original cooperative shares
endorsed without recourse in blank or to the order of the trustee, the original
security agreement, the proprietary lease or occupancy agreement, the
recognition agreement, the relevant financing statements and any other document
specified in the related prospectus supplement. The depositor will cause to be
filed in the appropriate office an assignment and a financing statement
evidencing the trustee's security interest in each cooperative loan.

     The applicable prospectus supplement may provide for the depositor's
delivery obligations in connection with home improvement loan contracts, but if
it does not, the depositor will as to each home improvement loan contract,
deliver or cause to be delivered to the trustee the original home improvement
loan contract and copies of documents and instruments related to each home
improvement contract and the security interest in the Property securing the home
improvement loan contract. In general, it is expected that the home improvement
loan contracts will not be stamped or otherwise marked to reflect their
assignment to the trustee. Therefore, if, through negligence, fraud or
otherwise, a subsequent purchaser were able to take physical possession of the
home improvement loan contracts without notice of the assignment by the
depositor, the interest of securityholders in the home improvement loan
contracts could be defeated. See "Certain Legal Aspects of the Loans -- The Home
Improvement Loan Contracts."

     The trustee (or the custodian) will review the loan documents within the
time period specified in the related prospectus supplement after receipt
thereof, and the trustee will hold the documents in trust for the benefit of the
related securityholders. Generally, if the document is found to be missing or
defective in any material respect, the trustee (or the custodian) will notify
the master servicer, the depositor, and the related seller. If the seller cannot


                                       48



cure the omission or defect within the time period specified in the related
prospectus supplement after receipt of the notice, the seller will be obligated
to either purchase the related loan from the trust fund at the Purchase Price or
if so specified in the related prospectus supplement, remove the loan from the
trust fund and substitute in its place one or more other loans that meet certain
requirements set forth therein. We can give no assurance that a seller will
fulfill this purchase or substitution obligation. Although the master servicer
may be obligated to enforce the obligation to purchase the related loan to the
extent described above under "Loan Program -- Representations by Sellers;
Repurchases," neither the master servicer nor the depositor will be obligated to
purchase or replace the loan if the seller defaults on its obligation, unless
the breach also constitutes a breach of the representations or warranties of the
master servicer or the depositor, as the case may be. The applicable prospectus
supplement may provide other remedies, but if it does not, this obligation to
cure, purchase or substitute constitutes the sole remedy available to the
securityholders or the trustee for omission of, or a material defect in, a
constituent document.

     The trustee may be authorized to appoint a custodian pursuant to a
custodial agreement to maintain possession of and, if applicable, to review the
documents relating to the loans as agent of the trustee.

     Notwithstanding the foregoing provisions, with respect to a trust fund for
which one or more REMIC elections are to be made, no purchase or substitution of
a loan will be made if the purchase or substitution would result in a prohibited
transaction tax under the Code.

     Although the depositor has expressed in the Agreement its intent to treat
the conveyance of the loans as a sale, the depositor will also grant to the
trustee (or trust, in the case of a series with both notes and certificates) a
security interest in the loans. This security interest is intended to protect
the interests of the securityholders if a bankruptcy court were to characterize
the depositor's transfer of the loans as a borrowing by the depositor secured by
a pledge of the loans as described under "Risk Factors - Bankruptcy or
Insolvency May Affect The Timing And Amount Of Distributions On The Securities".
In the event that a bankruptcy court did characterize the transaction as a
borrowing by the depositor, that borrowing would be secured by the loans in
which the depositor granted a security interest to the trustee (or trust, in the
case of a series with both notes and certificates). The depositor has agreed to
take those actions that are necessary to maintain the security interest granted
to the trustee as a first priority, perfected security interest in the loans,
including the filing of Uniform Commercial Code financing statements, if
necessary.

PAYMENTS ON LOANS; DEPOSITS TO SECURITY ACCOUNT

     The master servicer will establish and maintain or cause to be established
and maintained with respect to the related trust fund a separate account or
accounts for the collection of payments on the related Trust Fund Assets in the
trust fund (the "Security Account"). The applicable prospectus supplement may
provide for other requirements for the Security Account, but if it does not, the
Security Account must be either:

o    an account or accounts maintained with a federal or state chartered
     depository institution or trust company the short-term unsecured debt
     obligations of which (or, in the case of a depository institution or trust
     company that is the principal subsidiary of a holding company, the debt
     obligations of such holding company) have the highest short-term ratings of
     Moody's or Fitch and one of the two highest short-term ratings of S&P, if
     S&P is a Rating Agency, at the time any amounts are held on deposit
     therein;

o    an account or accounts in a depository institution or trust company the
     deposits in which are insured by the FDIC (to the limits established by the
     FDIC), and the uninsured deposits in which are otherwise secured such that,
     as evidenced by an opinion of counsel, the securityholders have a claim
     with respect to the funds in the security account or a perfected first
     priority security interest against any collateral securing the funds that
     is superior to the claims of any other depositors or general creditors of
     the depository institution with which the Security Account is maintained;

o    a trust account or accounts maintained with the corporate trust department
     of a federal or state chartered depository institution or trust company
     having capital and surplus of not less than $50,000,000, acting in its
     fiduciary capacity; or


                                       49



o    an account or accounts otherwise acceptable to each Rating Agency.

     The collateral eligible to secure amounts in the Security Account is
limited to Permitted Investments. A Security Account may be maintained as an
interest bearing account or the funds held therein may be invested pending each
succeeding distribution date in Permitted Investments. To the extent provided in
the related prospectus supplement, the master servicer or its designee will be
entitled to direct the investment of the funds held in the Security Account and
to receive any interest or other income earned on funds in the Security Account
as additional compensation, and will be obligated to deposit in the Security
Account the amount of any loss immediately as realized. The Security Account may
be maintained with the master servicer or with a depository institution that is
an affiliate of the master servicer, provided it meets the standards set forth
above.

     The master servicer will deposit or cause to be deposited in the Security
Account for each trust fund, to the extent applicable and unless otherwise
specified in the related Pooling and Servicing Agreement or Sale and Servicing
Agreement, and the related prospectus supplement, the following payments and
collections received or advances made by or on behalf of it subsequent to the
cut-off date (other than payments due on or before the cut-off date and
exclusive of any amounts representing any Retained Interest):

o    all payments on account of principal, including Principal Prepayments and,
     if specified in the related prospectus supplement, any applicable
     prepayment charges, on the loans;

o    all payments on account of interest on the loans, net of applicable
     servicing compensation;

o    all proceeds (net of unreimbursed payments of property taxes, insurance
     premiums and similar items ("Insured Expenses") incurred, and unreimbursed
     advances made, by the master servicer, if any) of the hazard insurance
     policies and any Primary Mortgage Insurance Policies, to the extent the
     proceeds are not applied to the restoration of the property or released to
     the mortgagor in accordance with the master servicer's normal servicing
     procedures (collectively, "Insurance Proceeds") and all other cash amounts
     (net of unreimbursed expenses incurred in connection with liquidation or
     foreclosure ("Liquidation Expenses") and unreimbursed advances made, by the
     master servicer, if any) received and retained in connection with the
     liquidation of defaulted loans, by foreclosure or otherwise, together with
     any net proceeds received on a monthly basis with respect to any properties
     acquired on behalf of the securityholders by foreclosure or deed in lieu of
     foreclosure ("Liquidation Proceeds") and any Subsequent Recoveries;

o    all proceeds of any loan or property in respect thereof purchased by the
     master servicer, the depositor or any seller as described under "Loan
     Program-- Representations by Sellers; Repurchases" or "--Assignment of
     Trust Fund Assets" above and all proceeds of any loan purchased as
     described under "--Termination; Optional Termination" below;

o    all payments required to be deposited in the Security Account with respect
     to any deductible clause in any blanket insurance policy described under
     "--Hazard Insurance" below;

o    any amount required to be deposited by the master servicer in connection
     with losses realized on investments for the benefit of the master servicer
     of funds held in the Security Account and, to the extent specified in the
     related prospectus supplement, any advances required to be made by the
     master servicer and any payments required to be made by the master servicer
     in connection with prepayment interest shortfalls; and

o    all other amounts required to be deposited in the Security Account pursuant
     to the Agreement.


                                       50



     Unless otherwise specified in the related prospectus supplement the master
servicer will make these deposits within two business days of receipt of the
amounts.

     Unless otherwise specified in the related prospectus supplement, the master
servicer (or the depositor, as applicable) may from time to time direct the
institution that maintains the Security Account to withdraw funds from the
Security Account for the following purposes:

o    to pay to the master servicer the master servicing fees (subject to
     reduction) described in the related prospectus supplement, and, as
     additional servicing compensation, earnings on or investment income with
     respect to funds in the amounts in the Security Account credited thereto,
     as well as any other additional servicing compensation specified in the
     related prospectus supplement;

o    to reimburse the master servicer and the trustee for advances, which right
     of reimbursement with respect to any loan is limited to amounts received
     that represent late recoveries of payments of principal and/or interest on
     the loan (or Insurance Proceeds or Liquidation Proceeds with respect
     thereto) with respect to which the advance was made;

o    to reimburse the master servicer and the trustee for any advances
     previously made which the master servicer has determined to be
     nonrecoverable;

o    to reimburse the master servicer from Insurance Proceeds for expenses
     incurred by the master servicer and covered by the related insurance
     policies;

o    to reimburse the master servicer for unpaid master servicing fees and
     unreimbursed out-of-pocket costs and expenses incurred by the master
     servicer in the performance of its servicing obligations, which right of
     reimbursement is limited to amounts received representing late recoveries
     of the payments for which the advances were made;

o    to pay to the master servicer, the depositor or the applicable seller, with
     respect to each loan or property acquired in respect thereof that has been
     purchased by the master servicer or seller pursuant to the related
     Agreement, all amounts received after the purchase and not taken into
     account in determining the purchase price of the repurchased loan;

o    to reimburse the master servicer, the depositor or other party specified in
     the related prospectus supplement for expenses incurred and reimbursable
     pursuant to the Agreement;

o    to pay any lender-paid primary mortgage insurance premium;

o    to withdraw any amount deposited in the Security Account and not required
     to be deposited therein; and

o    to clear and terminate the Security Account upon termination of the
     Agreement.

     In addition, the Agreement will generally provide that, on or prior to the
business day immediately preceding each distribution date, the master servicer
shall withdraw from the Security Account the amount of Available Funds and the
trustee fee for the distribution date, to the extent on deposit, for deposit in
an account maintained by the trustee for the related series of securities.

     Unless otherwise specified in the related prospectus supplement, aside from
the annual compliance review and servicing criteria assessment and accompanying
accountants' attestation, there is no independent verification of the
transaction accounts or the transaction activity. The master servicer is
required to provide an annual certification to the effect that the master
servicer has fulfilled its obligations under the related Pooling and Servicing
Agreement or Sale and Servicing Agreement throughout the preceding year, as well
as an annual assessment and an


                                       51



accompanying accountants' attestation as to its compliance with applicable
servicing criteria. See " - Evidence as to Compliance."

PRE-FUNDING ACCOUNT

     If so provided in the related prospectus supplement, the trustee will
establish and maintain an account (the "Pre-Funding Account"), in the name of
the related trustee on behalf of the related securityholders, into which the
seller or the depositor will deposit cash in an amount specified in the
prospectus supplement (the "Pre-Funded Amount") on the related closing date. The
Pre-Funding Account will be maintained with the trustee for the related series
of securities or with another eligible institution, and is designed solely to
hold funds to be applied during the period from the closing date to a date not
more than a year after the closing date (the "Funding Period") to pay to the
depositor the purchase price for loans purchased during the Funding Period (the
"Subsequent Loans"). Monies on deposit in the Pre-Funding Account will not be
available to cover losses on or in respect of the related loans. The Pre-Funded
Amount will not exceed 50% of the initial aggregate principal amount of the
certificates and notes of the related series. The Pre-Funded Amount will be used
by the related trustee to purchase Subsequent Loans from the depositor from time
to time during the Funding Period. The Funding Period, if any, for a trust fund
will begin on the related closing date and will end on the date specified in the
related prospectus supplement, which in no event will be later than the date
that is one year after the related closing date. Monies on deposit in the
Pre-Funding Account may be invested in Permitted Investments under the
circumstances and in the manner described in the related prospectus supplement.
Unless otherwise specified in the related prospectus supplement, earnings on
investment of funds in the Pre-Funding Account will be deposited into the
related Security Account or the other trust account as is specified in the
related prospectus supplement and losses will be charged against the funds on
deposit in the Pre-Funding Account. Any amounts remaining in the Pre-Funding
Account at the end of the Funding Period will be distributed in the manner and
priority specified in the related prospectus supplement.

     In addition, if so provided in the related prospectus supplement, on the
related closing date the depositor or the seller will deposit in an account (the
"Capitalized Interest Account") cash in the amount necessary to cover shortfalls
in interest on the related series of securities that may arise as a result of
utilization of the Pre-Funding Account as described above, or with respect to
the related distributions dates, Countrywide Home Loans may deposit the amount
of these shortfalls specified in the related prospectus supplement in to the
related Security Account. The Capitalized Interest Account shall be maintained
with the trustee for the related series of securities and is designed solely to
cover the above-mentioned interest shortfalls. Neither the monies on deposit in
the Capitalized Interest Account nor any amounts paid by Countrywide Home Loans
will be available to cover losses on or in respect of the related loans. To the
extent that the entire amount on deposit in the Capitalized Interest Account has
not been applied to cover shortfalls in interest on the related series of
securities by the end of the Funding Period, any amounts remaining in the
Capitalized Interest Account will be paid to the depositor.

INVESTMENTS IN AMOUNTS HELD IN ACCOUNTS

     Unless otherwise specified in the related prospectus supplement, funds held
in a Security Account, any Pre-Funding Account, any Capitalized Interest
Account, any reserve fund or any other accounts that are part of the Trust Fund
Assets, may be invested in "Permitted Investments" which may include one or more
of the following:

          (i) obligations of the United States or any agency thereof, provided
     the obligations are backed by the full faith and credit of the United
     States;

          (ii) general obligations of or obligations guaranteed by any state of
     the United States or the District of Columbia receiving the highest
     long-term debt rating of each Rating Agency rating the related series of
     securities, or a lower rating that each Rating Agency has confirmed in
     writing is sufficient for the ratings originally assigned to the securities
     by each Rating Agency;

          (iii) commercial paper issued by Countrywide Home Loans or any of its
     affiliates; provided that the commercial paper is rated no lower than the
     rating specified in the related prospectus supplement;


                                       52



          (iv) commercial or finance company paper which is then receiving the
     highest commercial or finance company paper rating of each Rating Agency,
     or such lower rating as each Rating Agency has confirmed in writing is
     sufficient for the ratings originally assigned to the related securities by
     each Rating Agency;

          (v) certificates of deposit, demand or time deposits, or bankers'
     acceptances issued by any depository institution or trust company
     incorporated under the laws of the United States or of any state thereof
     and subject to supervision and examination by federal and/or state banking
     authorities, provided that the commercial paper and/or long term unsecured
     debt obligations of the depository institution or trust company (or in the
     case of the principal depository institution in a holding company system,
     the commercial paper or long-term unsecured debt obligations of the holding
     company, but only if Moody's Investors Service, Inc. ("Moody's") is not a
     Rating Agency) are then rated one of the two highest long-term and the
     highest short-term ratings of each Rating Agency for the securities, or
     such lower ratings as each Rating Agency has confirmed in writing is
     sufficient for the ratings originally assigned to the related securities by
     any Rating Agency;

          (vi) demand or time deposits or certificates of deposit issued by any
     bank or trust company or savings institution to the extent that the
     deposits are fully insured by the FDIC;

          (vii) guaranteed reinvestment agreements issued by any bank, insurance
     company or other corporation containing, at the time of the issuance of the
     agreements, the terms and conditions as each Rating Agency has confirmed in
     writing is sufficient for the ratings originally assigned to the related
     securities by any Rating Agency;

          (viii) repurchase obligations with respect to any security described
     in clauses (i) and (ii) above, in either case entered into with a
     depository institution or trust company (acting as principal) described in
     clause (v) above;

          (ix) securities (other than stripped bonds, stripped coupons or
     instruments sold at a purchase price in excess of 115% of the face amount
     thereof) bearing interest or sold at a discount issued by any corporation
     incorporated under the laws of the United States or any state thereof
     which, at the time of the investment, have one of the two highest ratings
     of each Rating Agency (except if the Rating Agency is Moody's, the rating
     shall be the highest commercial paper rating of Moody's for any of those
     securities), or such lower rating as each Rating Agency has confirmed in
     writing is sufficient for the ratings originally assigned to the related
     securities by any Rating Agency, as evidenced by a signed writing delivered
     by each Rating Agency;

          (x) interests in any money market fund which at the date of
     acquisition of the interests in the fund and throughout the time the
     interests are held in the fund has the highest applicable rating by each
     Rating Agency or such lower rating as each Rating Agency has confirmed in
     writing is sufficient for the ratings originally assigned to the related
     securities by each Rating Agency;

          (xi) short term investment funds sponsored by any trust company or
     national banking association incorporated under the laws of the United
     States or any state thereof which on the date of acquisition has been rated
     by each Rating Agency in their respective highest applicable rating
     category or a lower rating that each Rating Agency has confirmed in writing
     is sufficient for the ratings originally assigned to those securities by
     each Rating Agency; and

          (xii) other investments that have a specified stated maturity and
     bearing interest or sold at a discount acceptable to each Rating Agency as
     will not result in the downgrading or withdrawal of the rating then
     assigned to the related securities by any Rating Agency, as evidenced by a
     signed writing delivered by each Rating Agency; provided that none of those
     investments shall be a Permitted Investment if the investments evidences
     the right to receive interest only payments with respect to the obligations
     underlying the investment; and provided, further, that no investment
     specified in clause (x) or clause (xi) above shall be a Permitted
     Investment for any pre-funding account or any related Capitalized Interest
     Account.


                                       53



If a letter of credit is deposited with the trustee, that letter of credit will
be irrevocable and will name the trustee, in its capacity as trustee for the
holders of the securities, as beneficiary and will be issued by an entity
acceptable to each Rating Agency that rates the securities of the related
series. Additional information with respect to the instruments deposited in the
accounts will be set forth in the related prospectus supplement.

Unless otherwise specified in the related prospectus supplement, the Permitted
Investments will be held in the name of the trustee for the benefit of the
securityholders and may not mature later than:

o    in the case of a Security Account, the second business day next preceding
     the date on which funds must be transferred to the trustee in each month
     (except that if the Permitted Investment is an obligation of the
     institution that maintains the Security Account, then the Permitted
     Investment may not mature later than the business day next preceding that
     date) and may not be sold or disposed of prior to its maturity; and

o    in the case of the any other account, the business day immediately
     preceding the first distribution date that follows the date of the
     investment (except that if the Permitted Investment is an obligation of the
     institution that maintains the account, then the Permitted Investment may
     mature not later than the related distribution date) and may not be sold or
     disposed of prior to its maturity.

SUB-SERVICING BY SELLERS

     Each seller of a loan or any other servicing entity may act as the
sub-servicer for the loan pursuant to a sub-servicing agreement, which will not
contain any terms inconsistent with the related Agreement. Notwithstanding any
subservicing arrangement, unless otherwise provided in the related prospectus
supplement, the master servicer will remain liable for its servicing duties and
obligations under the related Agreement as if the master servicer alone were
servicing the loans.

COLLECTION PROCEDURES

     The master servicer, directly or through one or more sub-servicers, will
make reasonable efforts to collect all payments called for under the loans and
will, consistent with each Agreement and any mortgage insurance policy required
to be maintained under the related Agreement, follow collection procedures that
are customary with respect to loans that are comparable to the loans. Consistent
with the above, the master servicer may, in its discretion, waive any assumption
fee, late payment or other charge in connection with a loan and to the extent
not inconsistent with the coverage of the loan by a any mortgage insurance
policy required to be maintained under the related Agreement, if applicable,
arrange with a borrower a schedule for the liquidation of delinquencies running
for no more than 270 days after the applicable due date for each payment. To the
extent the master servicer is obligated to make or cause to be made advances,
the obligation will remain during any period of that arrangement.

     The applicable prospectus supplement may provide for other alternatives
regarding due-on-sale clause, but if it does not, in any case in which property
securing a loan has been, or is about to be, conveyed by the mortgagor or
obligor, the master servicer will, to the extent it has knowledge of the
conveyance or proposed conveyance, exercise or cause to be exercised its rights
to accelerate the maturity of the loan under any due-on-sale clause applicable
thereto, but only if the exercise of the rights is permitted by applicable law
and will not impair or threaten to impair any recovery under any mortgage
insurance policy required to be maintained under the related Agreement. If these
conditions are not met or if the master servicer reasonably believes it is
unable under applicable law to enforce the due-on-sale clause or if coverage
under any required mortgage insurance policy would be adversely affected, the
master servicer will enter into or cause to be entered into an assumption and
modification agreement with the person to whom the property has been or is about
to be conveyed, pursuant to which the person becomes liable for repayment of the
loan and, to the extent permitted by applicable law, the mortgagor remains
liable thereon. Any fee collected by or on behalf of the master servicer for
entering into an assumption agreement will be retained by or on behalf of the
master servicer as additional servicing compensation. See "Certain Legal Aspects
of the Loans -- Due-on-Sale Clauses". In connection with any assumption, the
terms of the related loan may not be changed.


                                       54



     With respect to cooperative loans, any prospective purchaser will generally
have to obtain the approval of the board of directors of the relevant
cooperative before purchasing the shares and acquiring rights under the related
proprietary lease or occupancy agreement. See "Certain Legal Aspects of the
Loans". This approval is usually based on the purchaser's income and net worth
and numerous other factors. Although the cooperative's approval is unlikely to
be unreasonably withheld or delayed, the necessity of acquiring approval could
limit the number of potential purchasers for those shares and otherwise limit
the trust fund's ability to sell and realize the value of those shares.

     In general a "tenant-stockholder" (as defined in Code Section 216(b)(2)) of
a corporation that qualifies as a "cooperative housing corporation" within the
meaning of Code Section 216(b)(1) is allowed a deduction for amounts paid or
accrued within his taxable year to the corporation representing his
proportionate share of certain interest expenses and certain real estate taxes
allowable as a deduction under Code Section 216(a) to the corporation under Code
Sections 163 and 164. In order for a corporation to qualify under Code Section
216(b)(1) for its taxable year in which those items are allowable as a deduction
to the corporation, that Section requires, among other things, that at least 80%
of the gross income of the corporation be derived from its tenant-stockholders
(as defined in Code Section 216(b)(2)). By virtue of this requirement, the
status of a corporation for purposes of Code Section 216(b)(1) must be
determined on a year-to-year basis. Consequently, we can give no assurance that
cooperatives relating to the cooperative loans will qualify under that Section
for any particular year. In the event that a cooperative fails to qualify for
one or more years, the value of the collateral securing any related cooperative
loans could be significantly impaired because no deduction would be allowable to
tenant-stockholders under Code Section 216(a) with respect to those years. In
view of the significance of the tax benefits accorded tenant-stockholders of a
corporation that qualifies under Code Section 216(b)(1), the likelihood that a
failure to qualify would be permitted to continue over a period of years appears
remote.

HAZARD INSURANCE

     In general, the master servicer will require the mortgagor or obligor on
each loan to maintain a hazard insurance policy providing coverage in an amount
that is at least equal to the lesser of:

o    the maximum insurable value of the improvements securing the loan or

o    the greater of

          (1) the outstanding principal balance of the loan; and

          (2) an amount such that the proceeds of the policy shall be sufficient
     to prevent the mortgagor and/or the mortgagee from becoming a co-insurer.

All amounts collected by the master servicer under any hazard policy (except for
amounts to be applied to the restoration or repair of the Property or released
to the mortgagor or obligor in accordance with the master servicer's normal
servicing procedures) will be deposited in the related Security Account. In the
event that the master servicer maintains a blanket policy insuring against
hazard losses on all the loans comprising part of a trust fund, it will
conclusively be deemed to have satisfied its obligation relating to the
maintenance of hazard insurance. The blanket policy may contain a deductible
clause, in which case the master servicer will be required to deposit from its
own funds into the related Security Account the amounts which would have been
deposited therein but for that clause.

     In general, the standard form of fire and extended coverage policy covers
physical damage to or destruction of the improvements securing a loan by fire,
lightning, explosion, smoke, windstorm and hail, riot, strike and civil
commotion, subject to the conditions and exclusions particularized in each
policy. Although the policies relating to the loans may have been underwritten
by different insurers under different state laws in accordance with different
applicable forms and therefore may not contain identical terms and conditions,
the basic terms thereof are dictated by respective state laws, and most policies
typically do not cover any physical damage resulting from the following: war,
revolution, governmental actions, floods and other water-related causes, earth
movement (including earthquakes, landslides and mud flows), nuclear reactions,
wet or dry rot, vermin, rodents, insects or domestic animals, theft and, in
certain cases, vandalism and hurricanes. The foregoing list is merely indicative
of certain


                                       55



kinds of uninsured risks and is not intended to be all inclusive. If the
Property securing a loan is located in a federally designated special flood area
at the time of origination, the master servicer will require the mortgagor or
obligor to obtain and maintain flood insurance.

     The hazard insurance policies covering properties securing the loans
typically contain a clause which in effect requires the insured at all time to
carry insurance of a specified percentage (generally 80% to 90%) of the full
replacement value of the insured property in order to recover the full amount of
any partial loss. If the insured's coverage falls below this specified
percentage, then the insurer's liability in the event of partial loss will not
exceed the larger of

o    the actual cash value (generally defined as replacement cost at the time
     and place of loss, less physical depreciation) of the improvements damaged
     or destroyed and

o    the proportion of the loss as the amount of insurance carried bears to the
     specified percentage of the full replacement cost of the improvements.

Since the amount of hazard insurance the master servicer may cause to be
maintained on the improvements securing the loans declines as the principal
balances owing thereon decrease, and since improved real estate generally has
appreciated in value over time in the past, the effect of this requirement in
the event of partial loss may be that hazard insurance proceeds will be
insufficient to restore fully the damaged property. If specified in the related
prospectus supplement, a special hazard insurance policy will be obtained to
insure against certain of the uninsured risks described above. See "Credit
Enhancement".

     The master servicer will not require that a standard hazard or flood
insurance policy be maintained on the cooperative dwelling relating to any
cooperative loan. Generally, the cooperative itself is responsible for
maintenance of hazard insurance for the property owned by the cooperative and
the tenant-stockholders of that cooperative do not maintain individual hazard
insurance policies. To the extent, however, that a cooperative and the related
borrower on a cooperative loan do not maintain that insurance or do not maintain
adequate coverage or any insurance proceeds are not applied to the restoration
of damaged property, any damage to the borrower's cooperative dwelling or the
cooperative's building could significantly reduce the value of the collateral
securing the cooperative loan to the extent not covered by other credit support.

     If the Property securing a defaulted loan is damaged and proceeds, if any,
from the related hazard insurance policy are insufficient to restore the damaged
Property, the master servicer is not required to expend its own funds to restore
the damaged Property unless it determines (i) that the restoration will increase
the proceeds to securityholders on liquidation of the loan after reimbursement
of the master servicer for its expenses and (ii) that the expenses will be
recoverable by it from related Insurance Proceeds, Liquidation Proceeds or
Subsequent Recoveries.

     If recovery on a defaulted loan under any related Insurance Policy is not
available for the reasons set forth in the preceding paragraph, or if the
defaulted loan is not covered by an Insurance Policy, the master servicer will
be obligated to follow or cause to be followed those normal practices and
procedures as it deems necessary or advisable to realize upon the defaulted
loan. If the proceeds of any liquidation of the Property securing the defaulted
loan are less than the principal balance of the loan plus interest accrued
thereon that is payable to securityholders, the trust fund will realize a loss
in the amount of the difference plus the aggregate of expenses incurred by the
master servicer in connection with the proceedings and which are reimbursable
under the Agreement. In the unlikely event that those proceedings result in a
total recovery which is, after reimbursement to the master servicer of its
expenses, in excess of the principal balance of the loan plus interest accrued
thereon that is payable to securityholders, the master servicer will be entitled
to withdraw or retain from the Security Account amounts representing its normal
servicing compensation with respect to the loan and amounts representing the
balance of the excess, exclusive of any amount required by law to be forwarded
to the related borrower, as additional servicing compensation.

     If the master servicer or its designee recovers Insurance Proceeds which,
when added to any related Liquidation Proceeds and after deduction of certain
expenses reimbursable to the master servicer, exceed the principal balance of
the loan plus interest accrued thereon that is payable to securityholders, the
master servicer will be entitled to withdraw or retain from the Security Account
amounts representing its normal servicing compensation


                                       56



with respect to the loan. In the event that the master servicer has expended its
own funds to restore the damaged Property and the funds have not been reimbursed
under the related hazard insurance policy, it will be entitled to withdraw from
the Security Account out of related Liquidation Proceeds or Insurance Proceeds
an amount equal to the expenses incurred by it, in which event the trust fund
may realize a loss up to the amount so charged. Since Insurance Proceeds cannot
exceed deficiency claims and certain expenses incurred by the master servicer,
that payment or recovery will not result in a recovery to the trust fund which
exceeds the principal balance of the defaulted loan together with accrued
interest thereon. See "Credit Enhancement".

APPLICATION OF LIQUIDATION PROCEEDS

     The proceeds from any liquidation of a loan will be applied in the
following order of priority:

          o    to reimburse the master servicer for any unreimbursed expenses
               incurred by it to restore the related Property and any
               unreimbursed servicing compensation payable to the master
               servicer with respect to the loan;

          o    to reimburse the master servicer and trustee for any unreimbursed
               advances with respect to the loan;

          o    to accrued and unpaid interest (to the extent no advance has been
               made for that amount or the advance has been reimbursed) on the
               loan; and

          o    as a recovery of principal of the loan.

Unless otherwise specified in the related prospectus supplement, excess proceeds
from the liquidation of a loan will be retained by the master servicer as
additional servicing compensation.

     If specified in the related prospectus supplement, if, after final
liquidation of a mortgage loan, the master servicer receives a recovery
specifically related to that mortgage loan, the recovery (net of any
reimbursable expenses) will be distributed to the securityholders in the manner
specified in the related prospectus supplement. In addition, the principal
balance of each class of securities to which realized losses have been
allocated, will be increased, sequentially in the order of payment priority, to
the extent that such subsequent recoveries are distributed as principal to any
class of securities. However, the principal balance of the class of securities
will not be increased by more than the amount of realized losses previously
applied to reduce the principal balance of each the class of securities. Holders
of securities whose class principal balance is increased in this manner will not
be entitled to interest on the increased balance for any interest accrual period
preceding the Distribution Date on which the increase occurs.

REALIZATION UPON DEFAULTED LOANS

     Primary Mortgage Insurance Policies. If so specified in the related
prospectus supplement, the master servicer will maintain or cause to be
maintained, as the case may be, in full force and effect, a Primary Mortgage
Insurance Policy with regard to each loan for which the coverage is required.
Primary Mortgage Insurance Policies reimburse certain losses sustained by reason
of defaults in payments by borrowers. The master servicer will not cancel or
refuse to renew any Primary Mortgage Insurance Policy in effect at the time of
the initial issuance of a series of securities that is required to be kept in
force under the applicable Agreement unless the replacement Primary Mortgage
Insurance Policy for the cancelled or nonrenewed policy is maintained with an
insurer whose claims-paying ability is sufficient to maintain the current rating
of the classes of securities of the series that have been rated.

     Although the terms of primary mortgage insurance vary, the amount of a
claim for benefits under a Primary Mortgage Insurance Policy covering a loan
will consist of the insured percentage of the unpaid principal amount of the
covered loan and accrued and unpaid interest on it and reimbursement of certain
expenses, less all rents or other payments collected or received by the insured
(other than the proceeds of hazard insurance) that are derived from or


                                       57



in any way related to the Property, hazard insurance proceeds in excess of the
amount required to restore the Property and which have not been applied to the
payment of the mortgage loan, amounts expended but not approved by the issuer of
the related Primary Mortgage Insurance Policy, claim payments previously made by
the primary insurer and unpaid premiums.

     Primary Mortgage Insurance Policies reimburse certain losses sustained from
defaults in payments by borrowers. Primary Mortgage Insurance Policies will not
insure against, and exclude from coverage, a loss sustained from a default
arising from or involving certain matters, including fraud or negligence in
origination or servicing of the loans, including misrepresentation by the
originator, mortgagor, obligor or other persons involved in the origination of
the loan; failure to construct the Property subject to the mortgage loan in
accordance with specified plans; physical damage to the Property; and the
related sub-servicer not being approved as a servicer by the primary insurer.

     As conditions precedent to the filing of or payment of a claim under a
Primary Mortgage Insurance Policy covering a loan, the insured will generally be
required to

o    advance or discharge all hazard insurance policy premiums and as necessary
     and approved in advance by the primary insurer, real estate property taxes,
     all expenses required to maintain the related Property in at least as good
     a condition as existed at the effective date of the Primary Mortgage
     Insurance Policy, ordinary wear and tear excepted, Property sales expenses,
     any specified outstanding liens on the Property and foreclosure costs,
     including court costs and reasonable attorneys' fees;

o    upon any physical loss or damage to the Property, have the Property
     restored and repaired to at least as good a condition as existed at the
     effective date of the Primary Mortgage Insurance Policy, ordinary wear and
     tear excepted; and

o    tender to the primary insurer good and merchantable title to and possession
     of the Property.

     The master servicer, on behalf of itself, the trustee and the
certificateholders, will present claims to the insurer under each primary
mortgage insurance policy, and will take any reasonable steps consistent with
its practices regarding comparable mortgage loans and necessary to receive
payment or to permit recovery under the policy with respect to defaulted
mortgage loans.

     FHA Insurance; VA Guaranties. Loans designated in the related prospectus
supplement as insured by the FHA will be insured by the FHA as authorized under
the United States Housing Act of 1937, as amended. In addition to the Title I
Program of the FHA, see "Certain Legal Aspects of the Loans -- Title I Program",
certain loans will be insured under various FHA programs including the standard
FHA 203 (b) program to finance the acquisition of one- to four-family housing
units and the FHA 245 graduated payment mortgage program. These programs
generally limit the principal amount and interest rates of the mortgage loans
insured. Loans insured by FHA generally require a minimum down payment of
approximately 5% of the original principal amount of the loan. No FHA-insured
loans relating to a series may have an interest rate or original principal
amount exceeding the applicable FHA limits at the time of origination of the
loan.

     The insurance premiums for loans insured by the FHA are collected by
lenders approved by the HUD or by the master servicer or any sub-servicers and
are paid to the FHA. The regulations governing FHA single-family mortgage
insurance programs provide that insurance benefits are payable either upon
foreclosure (or other acquisition of possession) and conveyance of the mortgaged
premises to HUD or upon assignment of the defaulted loan to HUD. With respect to
a defaulted FHA-insured loan, the master servicer or any sub-servicer is limited
in its ability to initiate foreclosure proceedings. When it is determined,
either by the master servicer or any sub-servicer or HUD, that default was
caused by circumstances beyond the mortgagor's control, the master servicer or
any sub-servicer is expected to make an effort to avoid foreclosure by entering,
if feasible, into one of a number of available forms of forbearance plans with
the mortgagor. These plans may involve the reduction or suspension of regular
loan payments for a specified period, with the payments to be made up on or
before the maturity date of the loan, or the recasting of payments due under the
loan up to or beyond the maturity date. In addition, when a default caused by
circumstances beyond the mortgagor's control is accompanied by certain other
criteria, HUD may provide relief by


                                       58



making payments to the master servicer or any sub-servicer in partial or full
satisfaction of amounts due under the loan (which payments are to be repaid by
the mortgagor to HUD) or by accepting assignment of the loan from the master
servicer or any sub-servicer. With certain exceptions, at least three full
monthly installments must be due and unpaid under the loan and HUD must have
rejected any request for relief from the mortgagor before the master servicer or
any sub-servicer may initiate foreclosure proceedings.

     HUD has the option, in most cases, to pay insurance claims in cash or in
debentures issued by HUD. Currently, claims are being paid in cash, and claims
have not been paid in debentures since 1965. HUD debentures issued in
satisfaction of FHA insurance claims bear interest at the applicable HUD
debentures interest rate. The master servicer of any sub-servicer of each
FHA-insured mortgage loan will be obligated to purchase the debenture issued in
satisfaction of the loan upon default for an amount equal to the principal
amount of the debenture.

     The amount of insurance benefits generally paid by the FHA is equal to the
entire unpaid principal amount of the defaulted loan adjusted to reimburse the
master servicer or sub-servicer for certain costs and expenses and to deduct
certain amounts received or retained by the master servicer or sub-servicer
after default. When entitlement to insurance benefits results from foreclosure
(or other acquisition of possession) and conveyance to HUD, the master servicer
or sub-servicer is compensated for no more than two-thirds of its foreclosure
costs, and is compensated for accrued and unpaid interest but in general only to
the extent it was allowed pursuant to a forbearance plan approved by HUD. When
entitlement to insurance benefits results from assignment of the loan to HUD,
the insurance payment includes full compensation for interest accrued and unpaid
to the assignment date. The insurance payment itself, upon foreclosure of an
FHA-insured mortgage loan, bears interest from a date 30 days after the
mortgagor's first uncorrected failure to perform any obligation to make any
payment due under the loan and, upon assignment, from the date of assignment to
the date of payment of the claim, in each case at the same interest rate as the
applicable HUD debenture interest rate as described above.

     Loans designated in the related prospectus supplement as guaranteed by the
VA will be partially guaranteed by the VA under the Serviceman's Readjustment
Act of 1944, as amended (a "VA Guaranty"). The Serviceman's Readjustment Act of
1944, as amended, permits a veteran (or in certain instances the spouse of a
veteran) to obtain a mortgage loan guaranty by the VA covering mortgage
financing of the purchase of a one- to four-family dwelling unit at interest
rates permitted by the VA. The program has no mortgage loan limits, requires no
down payment from the purchaser and permits the guaranty of mortgage loans of up
to 30 years' duration. However, no loan guaranteed by the VA will have an
original principal amount greater than five times the partial VA guaranty for
the loan. The maximum guaranty that may be issued by the VA under a VA
guaranteed mortgage loan depends upon the original principal amount of the
mortgage loan, as further described in 38 United States Code Section 1803(a), as
amended.

     The liability on the guaranty may be reduced or increased pro rata with any
reduction or increase in the amount of indebtedness, but in no event will the
amount payable on the guaranty exceed the amount of the original guaranty. The
VA, at its option and without regard to the guaranty, may make full payment to a
mortgage holder of unsatisfied indebtedness on a loan upon its assignment to the
VA.

     With respect to a defaulted VA guaranteed loan, the master servicer or
sub-servicer is, absent exceptional circumstances, authorized to announce its
intention to foreclose only when the default has continued for three months.
Generally, a claim for the guaranty is submitted after liquidation of the
mortgaged property.

     The amount payable under the guaranty will be the percentage of the
VA-insured loan originally guaranteed applied to indebtedness outstanding as of
the applicable date of computation specified in the VA regulations. Payments
under the guaranty will be equal to the unpaid principal amount of the loan,
interest accrued on the unpaid balance of the loan to the appropriate date of
computation and limited expenses of the mortgagee, but in each case only to the
extent that the amounts have not been recovered through liquidation of the
mortgaged property.

SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES

     The principal servicing compensation to be paid to the master servicer in
respect of its master servicing activities for each series of securities will be
equal to the percentage per annum described in the related prospectus


                                       59



supplement (which may vary under certain circumstances) of the outstanding
principal balance of each loan, and that compensation will be retained by it
from collections of interest on the loan in the related trust fund (the "Master
Servicing Fee"). As compensation for its servicing duties, a sub-servicer or, if
there is no sub-servicer, the master servicer will be entitled to a monthly
servicing fee as described in the related prospectus supplement. In addition,
generally, the master servicer or sub-servicer will retain all prepayment
charges, assumption fees and late payment charges, to the extent collected from
borrowers, and any benefit that may accrue as a result of the investment of
funds in the applicable Security Account.

     The master servicer will, to the extent permitted in the related Pooling
and Servicing Agreement or Sale and Servicing Agreement, pay or cause to be paid
certain ongoing expenses associated with each trust fund and incurred by it in
connection with its responsibilities under the related Agreement, including,
without limitation, payment of any fee or other amount payable in respect of any
credit enhancement arrangements, payment of the fees and disbursements of the
trustee, unless otherwise specified in the related prospectus supplement, any
custodian appointed by the trustee, the certificate registrar and any paying
agent, and payment of expenses incurred in enforcing the obligations of
sub-servicers and sellers. The master servicer will be entitled to reimbursement
of expenses incurred in enforcing the obligations of sub-servicers and sellers
under certain limited circumstances. In addition, as indicated in the preceding
section, the master servicer will be entitled to reimbursement for certain
expenses incurred by it in connection with any defaulted loan as to which it has
determined that all recoverable Liquidation Proceeds and Insurance Proceeds have
been received and in connection with the restoration of Properties, the right of
reimbursement being before the rights of holders of the securities to receive
any related Liquidation Proceeds (including Insurance Proceeds).

EVIDENCE AS TO COMPLIANCE

     Each Agreement will provide for delivery to the depositor and the trustee,
on or before a specified date in each year, of an annual statement signed by an
authorized officer of the master servicer to the effect that the master servicer
has fulfilled its obligations under the Agreement throughout the preceding year.

     Each Agreement will also provide for delivery to the depositor, the master
servicer and the trustee, on or before a specified date in each year, of an
annual servicing assessment report from each party performing servicing
functions with respect to the related series, including any servicer that
services 5% or more of the Trust Fund Assets. In each assessment report, the
party providing the report must include an assessment of its compliance with the
servicing criteria during the previous fiscal year, and disclose any material
noncompliance with the applicable servicing criteria. The servicing criteria are
divided generally into four categories:

          o    general servicing considerations;

          o    cash collection and administration;

          o    investor remittances and reporting; and

          o    pool asset administration.

     Each servicing assessment report is required to be accompanied by
attestation report provided by a public registered accounting firm. The
attestation report must contain an opinion of the registered public accounting
firm as to whether the related servicing criteria assessment was fairly stated
in all material respects, or a statement that the firm cannot express that
opinion. The attestation examination the must be made in accordance with the
attestation engagement standards issued or adopted by the Public Company
Accounting Oversight Board.

     Copies of the annual servicing compliance statement, the servicing criteria
assessment report and related accountants attestations and the annual
accountants' statement (if any) may be obtained by securityholders of the
related series without charge upon written request to the master servicer at the
address set forth in the related prospectus supplement.


                                       60



CERTAIN MATTERS REGARDING THE MASTER SERVICER AND THE DEPOSITOR

     The master servicer under each Pooling and Servicing Agreement or Sale and
Servicing Agreement, as applicable, will be named in the related prospectus
supplement. The entity serving as master servicer may have normal business
relationships with the depositor or the depositor's affiliates.

     Each Agreement will provide that the master servicer may not resign from
its obligations and duties under the Agreement except upon a determination that
its duties thereunder are no longer permissible under applicable law or upon
appointment of a successor servicer acceptable to the trustee and with written
confirmation from each Ratings Agency that such resignation and appointment
would not result in a downgrade or withdrawal of the ratings of any of the
securities. The master servicer may, however, be removed from its obligations
and duties as set forth in the Agreement. No resignation will become effective
until the trustee or a successor servicer has assumed the master servicer's
obligations and duties under the Agreement.

     Each Agreement will further provide that neither the master servicer, the
depositor nor any director, officer, employee, or agent of the master servicer
or the depositor will be under any liability to the trustee, the related trust
fund or securityholders for any action taken or for refraining from the taking
of any action in good faith pursuant to the Agreement, or for errors in
judgment; provided, however, that neither the master servicer, the depositor nor
any person will be protected against any breach of a representation and
warranty, any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
thereunder or by reason of reckless disregard of obligations and duties
thereunder. Each Agreement will further provide that the master servicer, the
depositor and any director, officer, employee or agent of the master servicer or
the depositor will be entitled to indemnification by the related trust fund and
will be held harmless against any loss, liability or expense incurred in
connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to the Agreement or
the securities, other than any loss, liability or expense related to any
specific loan or loans (except any loss, liability or expense otherwise
reimbursable pursuant to the Agreement) and any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties thereunder or by reason of reckless disregard of
obligations and duties thereunder. In addition, each Agreement will provide that
neither the master servicer nor the depositor will be under any obligation to
appear in, prosecute or defend any legal action which is not incidental to its
respective responsibilities under the Agreement and which in its opinion may
involve it in any expense or liability. The master servicer or the depositor
may, however, in its discretion undertake any action which it may deem necessary
or desirable with respect to the Agreement and the rights and duties of the
parties thereto and the interests of the trustee and the securityholders
thereunder. In that event, the legal expenses and costs of the action and any
liability resulting therefrom will be expenses, costs and liabilities of the
trust fund and the master servicer or the depositor, as the case may be, will be
entitled to be reimbursed therefor out of funds otherwise distributable to
securityholders.

     In general, any person into which the master servicer may be merged or
consolidated, or any person resulting from any merger or consolidation to which
the master servicer is a party, or any person succeeding to the business of the
master servicer, will be the successor of the master servicer under each
Agreement, provided that that person is qualified to sell mortgage loans to, and
service mortgage loans on behalf of, Fannie Mae or Freddie Mac.

EVENTS OF DEFAULT; RIGHTS UPON EVENT OF DEFAULT

     Pooling and Servicing Agreement; Sale and Servicing Agreement. The
applicable prospectus supplement may provide for other Events of Default under
any Pooling and Servicing Agreement or Sale and Servicing Agreement, but if it
does not, the Events of Default will consist of

o    any failure by the master servicer to deposit in a Security Account or
     remit to the trustee any payment which continues unremedied for five days
     after the giving of written notice of the failure to the master servicer by
     the trustee or the depositor, or to the master servicer, the depositor and
     the trustee by the holders of securities of that class evidencing not less
     than 25% of the total distributions allocated to the class ("percentage
     interests");


                                       61



o    any failure by the master servicer to observe or perform in any material
     respect any of its other covenants or agreements in the Agreement which
     continues unremedied for sixty days after the giving of written notice of
     the failure to the master servicer by the trustee or the depositor, or to
     the master servicer, the depositor and the trustee by the holders of
     securities of any class evidencing not less than 25% of the aggregate
     percentage interests constituting that class; and

o    certain events of insolvency, readjustment of debt, marshalling of assets
     and liabilities or similar proceeding and certain actions by or on behalf
     of the master servicer indicating its insolvency, reorganization or
     inability to pay its obligations.

     If specified in the related prospectus supplement, the Agreement will
permit the trustee to sell the Trust Fund Assets and the other assets of the
trust fund described under "Credit Enhancement" herein in the event that
payments on them are insufficient to make payments required in the Agreement.
The assets of the trust fund will be sold only under the circumstances and in
the manner specified in the related prospectus supplement.

     The applicable prospectus supplement may provide for steps required to be
taken if an Event of Default remains unremedied, but if it does not, so long as
an Event of Default under an Agreement remains unremedied, the trustee may, and
at the direction of holders of securities of any class evidencing not less than
25% of the aggregate percentage interests constituting that class and under
those circumstances as may be specified in the Agreement, the trustee shall
terminate all of the rights and obligations of the master servicer under the
Agreement relating to the trust fund and in and to the related Trust Fund
Assets, whereupon the trustee will succeed to all of the responsibilities,
duties and liabilities of the master servicer under the Agreement, including, if
specified in the related prospectus supplement, the obligation to make advances,
and will be entitled to similar compensation arrangements. After the master
servicer has received notice of termination, the trustee may execute and
deliver, on behalf of the master servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and do or accomplish all other acts or
things necessary or appropriate to effect the termination of the master
servicer, including the transfer and endorsement or assignment of the loans and
related documents. The master servicer has agreed to cooperate with the trustee
in effecting the termination of the master servicer, including the transfer to
the trustee of all cash amounts which shall at the time be credited to the
Security Account, or thereafter be received with respect to the loans. Upon
request of the trustee, the master servicer has also agreed, at its expense, to
deliver to the assuming party all documents and records relating to each
subservicing agreement and the loans then being serviced thereunder and an
accounting of amounts collected held by it and otherwise use its best efforts to
effect the orderly and efficient transfer of the subservicing agreement to the
assuming party. No additional funds have been reserved to pay for any expenses
not paid by the master servicer in connection with a servicing transfer.

     In the event that the trustee is unwilling or unable to act as the
successor to the master servicer, it may appoint, or petition a court of
competent jurisdiction for the appointment of, a mortgage loan servicing
institution with a net worth of at least $15,000,000 to act as successor to the
master servicer under the Agreement. Pending that appointment, the trustee is
obligated to act in that capacity. The trustee and any successor may agree upon
the servicing compensation to be paid, which in no event may be greater than the
compensation payable to the master servicer under the Agreement.

     Unless otherwise provided in the related prospectus supplement, no
securityholder, solely by virtue of the holder's status as a securityholder,
will have any right under any Agreement to institute any proceeding with respect
to the Agreement, unless the holder previously has given to the trustee written
notice of default and unless the holders of securities of any class of that
series evidencing not less than 25% of the aggregate percentage interests
constituting the class have made written request upon the trustee to institute
the proceeding in its own name as trustee thereunder and have offered to the
trustee reasonable indemnity, and the trustee for 60 days has neglected or
refused to institute that proceeding.


                                       62



     Indenture. The applicable prospectus supplement may provide for other
Events of Default, but if it does not, the Events of Default under each
Indenture will consist of:

o    a default by the issuer in the payment of any principal of or interest on
     any note of that series which continues unremedied for five days after the
     giving of written notice of the default is given as specified in the
     related prospectus supplement;

o    failure to perform in any material respect any other obligation or observe
     any representation or warranty of the issuer in the Indenture which
     continues for a period of thirty (30) days after notice thereof is given in
     accordance with the procedures described in the related prospectus
     supplement;

o    certain events of insolvency with respect to the issuer; or

o    any other Event of Default provided with respect to notes of that series
     including but not limited to certain defaults on the part of the issuer, if
     any, of a credit enhancement instrument supporting the notes.

     Unless otherwise provided in the related prospectus supplement, if an Event
of Default with respect to the notes of any series at the time outstanding
occurs and is continuing, either the trustee or the holders of not less than 51%
of the then aggregate outstanding amount of the notes of that series may declare
the principal amount (or, if the notes of that series have an interest rate of
0%, the portion of the principal amount as may be specified in the terms of that
series, as provided in the related prospectus supplement) of all the notes of
that series to be due and payable immediately. That declaration may, under
certain circumstances, be rescinded and annulled by the holders of not less than
51% of the percentage interests of the notes of the series.

     Unless otherwise provided in the related prospectus supplement, if,
following an Event of Default with respect to any series of notes, the notes of
the series have been declared to be due and payable, the trustee may,
notwithstanding that acceleration, elect to maintain possession of the
collateral securing the notes of the series and to continue to apply
distributions on the collateral as if there had been no declaration of
acceleration if the collateral continues to provide sufficient funds for the
payment of principal of and interest on the notes of the series as they would
have become due if there had not been a declaration. In addition, unless
otherwise specified in the related prospectus supplement, the trustee may not
sell or otherwise liquidate the collateral securing the notes of a series
following an Event of Default, other than a default in the payment of any
principal or interest on any note of the series for five days or more, unless

o    the holders of 100% of the percentage interests of the notes of the series
     consent to the sale,

o    the proceeds of the sale or liquidation are sufficient to pay in full the
     principal of and accrued interest, due and unpaid, on the outstanding notes
     of the series at the date of the sale or

o    the trustee determines that the collateral would not be sufficient on an
     ongoing basis to make all payments on the notes as the payments would have
     become due if the notes had not been declared due and payable, and the
     trustee obtains the consent of the holders of a majority of the percentage
     interests of the notes of the series.

     If specified in the related prospectus supplement, other parties, such as a
credit enhancement provider, may have certain rights with respect to remedies
upon an Event of Default that may limit the rights of the related noteholders.

     In the event that the trustee liquidates the collateral in connection with
an Event of Default involving a default for five days or more in the payment of
principal of or interest on the notes of a series, the Indenture may provide
that the trustee will have a prior lien on the proceeds of that liquidation for
unpaid fees and expenses. As a result, upon the occurrence of that Event of
Default, the amount available for distribution to the noteholders would be less
than would otherwise be the case. However, the trustee may not institute a
proceeding for the enforcement


                                       63



of its lien except in connection with a proceeding for the enforcement of the
lien of the Indenture for the benefit of the noteholders after the occurrence of
that Event of Default.

     In the event the principal of the notes of a series is declared due and
payable, as described above, the holders of the notes issued at a discount from
par may be entitled to receive no more than an amount equal to the unpaid
principal amount thereof less the amount of the discount which is unamortized.

     Subject to the provisions of the Indenture relating to the duties of the
trustee, in case an Event of Default shall occur and be continuing with respect
to a series of notes, the trustee shall be under no obligation to exercise any
of the rights or powers under the Indenture at the request or direction of any
of the holders of notes of the series, unless the holders offered to the trustee
security or indemnity satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in complying with the request or
direction. Subject to the provisions for indemnification and certain limitations
contained in the Indenture, the holders of not less than 51% of the then
aggregate outstanding amount of the notes of the series shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee or exercising any trust or power conferred on the
trustee with respect to the notes of the series, and the holders of not less
than 51% of the then aggregate outstanding amount of the notes of the series
may, in certain cases, waive any default with respect thereto, except a default
in the payment of principal or interest or a default in respect of a covenant or
provision of the Indenture that cannot be modified without the waiver or consent
of all the holders of the outstanding notes of the series affected thereby. If
provided in the related prospectus supplement, the priority of payments payable
on the notes may change following an Event of Default.

AMENDMENT

     The applicable prospectus supplement may specify other amendment
provisions, but if it does not, each Agreement may be amended by the parties to
the Agreement, without the consent of any of the securityholders,

          (a) to cure any ambiguity;

          (b) to correct any defective provision in the Agreement or to
     supplement any provision in the Agreement that may be inconsistent with any
     other provision in it;

          (c) to conform the Agreement to the related prospectus supplement or
     the prospectus;

          (d) to modify, alter, amend, add or to rescind any of the terms or
     provisions contained in the Agreement to comply with any rules or
     regulations promulgated by the SEC from time to time; or

          (e) to make any other revisions with respect to matters or questions
     arising under the Agreement which are not inconsistent with the provisions
     in it,

provided that the action will not adversely affect in any material respect the
interests of any securityholder. Any amendment made solely to conform the
Agreement to the final prospectus supplement provided to investors in connection
with the initial offering of the securities by the depositor will be deemed not
to materially and adversely affect the interests of securityholders. In
addition, an amendment will be deemed not to adversely affect in any material
respect the interests of the securityholders if the person requesting the
amendment obtains a letter from each Rating Agency requested to rate the class
or classes of securities of the related series stating that the amendment will
not result in the downgrading or withdrawal of the respective ratings then
assigned to the related securities.

     In addition, to the extent provided in the related Agreement, an Agreement
may be amended without the consent of any of the securityholders, to change the
manner in which the Security Account is maintained, provided that the change
does not adversely affect the then current rating on the class or classes of
securities of the related series that have been rated at the request of the
depositor. Moreover, the related Agreement may be amended to modify, eliminate
or add to any of its provisions to the extent necessary to modify the terms or
provisions related to any lower-tier REMIC, to maintain the qualification of the
related trust fund as a REMIC or to avoid or minimize the risk of imposition of
any tax on the REMIC, if a REMIC election is made with respect to the trust
fund, or to


                                       64



comply with any other requirements of the Code, if the trustee has received an
opinion of counsel to the effect that the action is necessary or helpful to
ensure the proper operation of the master REMIC, maintain the qualification,
avoid or minimize that risk or comply with those requirements, as applicable.

     The applicable prospectus supplement may specify other amendment
provisions, but if it does not, each Agreement may also be amended by the
parties to the related Agreement with consent of holders of securities of the
related series evidencing not less than 51% of the aggregate percentage
interests of each class affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the holders of the
related securities; provided, however, that the amendment may not

o    reduce in any manner the amount of or delay the timing of, payments
     received on Trust Fund Assets which are required to be distributed on any
     security without the consent of the holder of the related security,

o    adversely affect in any material respect the interests of the holders of
     any class of securities in a manner other than as described in the
     preceding bullet point, without the consent of the holders of securities of
     the class evidencing, as to the class, percentage interests aggregating
     66%, or

o    reduce the aforesaid percentage of securities of any class the holders of
     which are required to consent to the amendment without the consent of the
     holders of all securities of that class covered by the Agreement then
     outstanding.

If a REMIC election is made with respect to a trust fund, the trustee will not
be entitled to consent to an amendment to the related Agreement without having
first received an opinion of counsel to the effect that the amendment will not
cause the related trust fund to fail to qualify as a REMIC. If so described in
the related prospectus supplement, an amendment of an Agreement may require the
consent of persons that are not party to the agreement, such as a credit
enhancement provider.

TERMINATION; OPTIONAL TERMINATION

     Pooling and Servicing Agreement; Sale and Servicing Agreement. The
applicable prospectus supplement may provide for the timing by which the
Agreement terminates, but if it does not, the obligations created by each
Pooling and Servicing Agreement and Sale and Servicing Agreement for each series
of securities will terminate upon the payment to the related securityholders of
all amounts held in the Security Account or by the master servicer and required
to be paid to them pursuant to the related Agreement following the earlier of:

          (i) the final payment of or other liquidation of the last of the Trust
     Fund Assets subject thereto or the disposition of all property acquired
     upon foreclosure of any Trust Fund Assets remaining in the trust fund; and

          (ii) the purchase by the master servicer, the party specified in the
     related prospectus supplement or, if REMIC treatment has been elected and
     if specified in the related prospectus supplement, by the holder of the
     residual interest in the REMIC (see "Federal Income Tax Consequences"
     below), from the related trust fund of all of the remaining Trust Fund
     Assets and all property acquired in respect of the Trust Fund Assets.

     Any purchase of Trust Fund Assets and property acquired in respect of Trust
Fund Assets evidenced by a series of securities will be made at the option of
the master servicer, or the party specified in the related prospectus
supplement, including the holder of the REMIC residual interest, at a price
specified in the related prospectus supplement. The exercise of this right will
effect early retirement of the securities of that series, but the right of the
master servicer, or the other party or, if applicable, the holder of the REMIC
residual interest, to so purchase is subject to the principal balance of the
related Trust Fund Assets being less than the percentage specified in the
related prospectus supplement of the aggregate principal balance of the Trust
Fund Assets at the cut-off date for the series. The foregoing is subject to the
provision that if a REMIC election is made with respect to a trust fund, any


                                       65



repurchase pursuant to clause (ii) above will not be made if the repurchase
would result in a "prohibited transaction tax" within the meaning of Section
860F(a)(1) of the Code being imposed on any REMIC.

     Indenture. The Indenture will be discharged with respect to a series of
notes (except with respect to certain continuing rights specified in the
Indenture) upon the delivery to the trustee for cancellation of all the notes of
the related series or, with certain limitations, upon deposit with the trustee
of funds sufficient for the payment in full of all of the notes of the related
series.

     In addition, the Indenture will provide that, if so specified with respect
to the notes of any series, the related trust fund will be discharged from any
and all obligations in respect of the notes of the series (except for certain
obligations relating to temporary notes and exchange of notes, to register the
transfer of or exchange notes of the series, to replace stolen, lost or
mutilated notes of the series, to maintain paying agencies and to hold monies
for payment in trust) upon the deposit with the trustee, in trust, of money
and/or direct obligations of or obligations guaranteed by the United States of
America which through the payment of interest and principal in respect thereof
in accordance with their terms will provide money in an amount sufficient to pay
the principal of and each installment of interest on the notes of the series on
the last scheduled distribution date for the notes and any installment of
interest on the notes in accordance with the terms of the Indenture and the
notes of the series. In the event of a defeasance and discharge of notes of a
series as described above, holders of notes of the related series would be able
to look only to that money and/or direct obligations for payment of principal
and interest, if any, on their notes until maturity.

THE TRUSTEE

     The trustee under each Agreement will be named in the applicable prospectus
supplement. The commercial bank or trust company serving as trustee may have
normal banking relationships with the depositor, the master servicer and any of
their respective affiliates.

                       CERTAIN LEGAL ASPECTS OF THE LOANS

     The following discussion contains summaries, which are general in nature,
of certain legal matters relating to the loans. Because those legal aspects are
governed primarily by applicable state law (which laws may differ
substantially), the descriptions do not, except as expressly provided below,
reflect the laws of any particular state, nor encompass the laws of all states
in which the security for the loans is situated. The descriptions are qualified
in their entirety by reference to the applicable federal laws and the
appropriate laws of the states in which loans may be originated.

GENERAL

     The loans for a series may be secured by deeds of trust, mortgages,
security deeds or deeds to secure debt, depending upon the prevailing practice
in the state in which the property subject to the loan is located. Deeds of
trust are used almost exclusively in California instead of mortgages. A mortgage
creates a lien upon the real property encumbered by the mortgage, which lien is
generally not prior to the lien for real estate taxes and assessments. Priority
between mortgages depends on their terms and generally on the order of recording
with a state or county office. There are two parties to a mortgage: the
mortgagor, who is the borrower and owner of the mortgaged property, and the
mortgagee, who is the lender. Under the mortgage instrument, the mortgagor
delivers to the mortgagee a note or bond and the mortgage. Although a deed of
trust is similar to a mortgage, a deed of trust formally has three parties, the
borrower-property owner called the trustor (similar to a mortgagor), a lender
(similar to a mortgagee) called the beneficiary, and a third-party grantee
called the trustee. Under a deed of trust, the borrower grants the property,
irrevocably until the debt is paid, in trust, generally with a power of sale, to
the trustee to secure payment of the obligation. A security deed and a deed to
secure debt are special types of deeds which indicate on their face that they
are granted to secure an underlying debt. By executing a security deed or deed
to secure debt, the grantor conveys title to, as opposed to merely creating a
lien upon, the subject property to the grantee until the underlying debt is
repaid. The trustee's authority under a deed of trust, the mortgagee's authority
under a mortgage and the grantee's authority under a security deed or deed to
secure debt are governed by law and, with respect to some deeds of trust, the
directions of the beneficiary.


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     In this prospectus, we generally use the term "mortgage" to generically
describe real-estate security instruments, however, if certain information
relates to a particular security instrument, we will refer to that security
instrument.

     Cooperatives. Certain of the loans may be cooperative loans. The
cooperative owns all the real property that comprises the project, including the
land, separate dwelling units and all common areas. The cooperative is directly
responsible for project management and, in most cases, payment of real estate
taxes and hazard and liability insurance. If there is a blanket mortgage on the
cooperative and/or underlying land, as is generally the case, the cooperative,
as project mortgagor, is also responsible for meeting these mortgage
obligations. A blanket mortgage is ordinarily incurred by the cooperative in
connection with the construction or purchase of the cooperative's apartment
building. The interest of the occupant under proprietary leases or occupancy
agreements to which that cooperative is a party are generally subordinate to the
interest of the holder of the blanket mortgage in that building. If the
cooperative is unable to meet the payment obligations arising under its blanket
mortgage, the mortgagee holding the blanket mortgage could foreclose on that
mortgage and terminate all subordinate proprietary leases and occupancy
agreements. In addition, the blanket mortgage on a cooperative may provide
financing in the form of a mortgage that does not fully amortize with a
significant portion of principal being due in one lump sum at final maturity.
The inability of the cooperative to refinance this mortgage and its consequent
inability to make the final payment could lead to foreclosure by the mortgagee
providing the financing. A foreclosure in either event by the holder of the
blanket mortgage could eliminate or significantly diminish the value of any
collateral held by the lender who financed the purchase by an individual
tenant-stockholder of cooperative shares or, in the case of a trust fund
including cooperative loans, the collateral securing the cooperative loans.

     The cooperative is owned by tenant-stockholders who, through ownership of
stock, shares or membership certificates in the corporation, receive proprietary
leases or occupancy agreements which confer exclusive rights to occupy specific
units. Generally, a tenant-stockholder of a cooperative must make a monthly
payment to the cooperative representing the tenant-stockholder's pro rata share
of the cooperative's payments for its blanket mortgage, real property taxes,
maintenance expenses and other capital or ordinary expenses. An ownership
interest in a cooperative and accompanying rights is financed through a
cooperative share loan evidenced by a promissory note and secured by a security
interest in the occupancy agreement or proprietary lease and in the related
cooperative shares. The lender takes possession of the share certificate and a
counterpart of the proprietary lease or occupancy agreement, and a financing
statement covering the proprietary lease or occupancy agreement and the
cooperative shares is filed in the appropriate state and local offices to
perfect the lender's interest in its collateral. Subject to the limitations
discussed below, upon default of the tenant-stockholder, the lender may sue for
judgment on the promissory note, dispose of the collateral at a public or
private sale or otherwise proceed against the collateral or tenant-stockholder
as an individual as provided in the security agreement covering the assignment
of the proprietary lease or occupancy agreement and the pledge of cooperative
shares.

FORECLOSURE

     Deed of Trust. Foreclosure of a deed of trust is generally accomplished by
a non-judicial sale under a specific provision in the deed of trust which
authorizes the trustee to sell the property at public auction upon any material
default by the borrower under the terms of the note or deed of trust. In certain
states, foreclosure also may be accomplished by judicial action in the manner
provided for foreclosure of mortgages. In addition to any notice requirements
contained in a deed of trust, in some states (such as California), the trustee
must record a notice of default and send a copy to the borrower-trustor, to any
person who has recorded a request for a copy of any notice of default and notice
of sale, to any successor in interest to the borrower-trustor, to the
beneficiary of any junior deed of trust and to certain other persons. In some
states (including California), the borrower-trustor has the right to reinstate
the loan at any time following default until shortly before the trustee's sale.
In general, the borrower, or any other person having a junior encumbrance on the
real estate, may, during a statutorily prescribed reinstatement period, cure a
monetary default by paying the entire amount in arrears plus other designated
costs and expenses incurred in enforcing the obligation. Generally, state law
controls the amount of foreclosure expenses and costs, including attorney's
fees, which may be recovered by a lender. After the reinstatement period has
expired without the default having been cured, the borrower or junior lienholder
no longer has the right to reinstate the loan and must pay the loan in full to
prevent the scheduled foreclosure sale. If the deed of trust is not reinstated
within any applicable cure period, a notice of sale must be posted in a public
place and, in most states (including California), published for a specific
period of time in one or more newspapers. In addition, some state laws require
that a copy


                                       67



of the notice of sale be posted on the property and sent to all parties having
an interest of record in the real property. In California, the entire process
from recording a notice of default to a non-judicial sale usually takes four to
five months.

     Mortgages. Foreclosure of a mortgage is generally accomplished by judicial
action. The action is initiated by the service of legal pleadings upon all
parties having an interest in the real property. Delays in completion of the
foreclosure may occasionally result from difficulties in locating necessary
parties. Judicial foreclosure proceedings are often not contested by any of the
parties. When the mortgagee's right to foreclosure is contested, the legal
proceedings necessary to resolve the issue can be time consuming. After the
completion of a judicial foreclosure proceeding, the court generally issues a
judgment of foreclosure and appoints a referee or other court officer to conduct
the sale of the property. In some states, mortgages may also be foreclosed by
advertisement, pursuant to a power of sale provided in the mortgage.

     Although foreclosure sales are typically public sales, frequently no third
party purchaser bids in excess of the lender's lien because of the difficulty of
determining the exact status of title to the property, the possible
deterioration of the property during the foreclosure proceedings and a
requirement that the purchaser pay for the property in cash or by cashier's
check. Thus the foreclosing lender often purchases the property from the trustee
or referee for an amount equal to the principal amount outstanding under the
loan, accrued and unpaid interest and the expenses of foreclosure in which event
the mortgagor's debt will be extinguished or the lender may purchase for a
lesser amount in order to preserve its right against a borrower to seek a
deficiency judgment in states where the judgment is available. Thereafter,
subject to the right of the borrower in some states to remain in possession
during the redemption period, the lender will assume the burden of ownership,
including obtaining hazard insurance and making the repairs at its own expense
as are necessary to render the property suitable for sale. The lender will
commonly obtain the services of a real estate broker and pay the broker's
commission in connection with the sale of the property. Depending upon market
conditions, the ultimate proceeds of the sale of the property may not equal the
lender's investment in the property. Any loss may be reduced by the receipt of
any mortgage guaranty insurance proceeds.

     Courts have imposed general equitable principles upon foreclosure, which
are generally designed to mitigate the legal consequences to the borrower of the
borrower's defaults under the loan documents. Some courts have been faced with
the issue of whether federal or state constitutional provisions reflecting due
process concerns for fair notice require that borrowers under deeds of trust
receive notice longer than that prescribed by statute. For the most part, these
cases have upheld the notice provisions as being reasonable or have found that
the sale by a trustee under a deed of trust does not involve sufficient state
action to afford constitutional protection to the borrower.

     When the beneficiary under a junior mortgage or deed of trust cures the
default and reinstates or redeems by paying the full amount of the senior
mortgage or deed of trust, the amount paid by the beneficiary so to cure or
redeem becomes a part of the indebtedness secured by the junior mortgage or deed
of trust. See "Junior Mortgages; Rights of Senior Mortgagees" below.

     Cooperative Loans. The cooperative shares owned by the tenant-stockholder
and pledged to the lender are, in almost all cases, subject to restrictions on
transfer as set forth in the cooperative's certificate of incorporation and
bylaws, as well as the proprietary lease or occupancy agreement, and may be
cancelled by the cooperative for failure by the tenant-stockholder to pay rent
or other obligations or charges owed by the tenant-stockholder, including
mechanics' liens against the cooperative apartment building incurred by the
tenant-stockholder. The proprietary lease or occupancy agreement generally
permits the cooperative to terminate the lease or agreement in the event an
obligor fails to make payments or defaults in the performance of covenants
required thereunder. Typically, the lender and the cooperative enter into a
recognition agreement which establishes the rights and obligations of both
parties in the event of a default by the tenant-stockholder on its obligations
under the proprietary lease or occupancy agreement. A default by the
tenant-stockholder under the proprietary lease or occupancy agreement will
usually constitute a default under the security agreement between the lender and
the tenant-stockholder.

     The recognition agreement generally provides that, in the event that the
tenant-stockholder has defaulted under the proprietary lease or occupancy
agreement, the cooperative will take no action to terminate the lease or
agreement until the lender has been provided with an opportunity to cure the
default. The recognition agreement


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typically provides that if the proprietary lease or occupancy agreement is
terminated, the cooperative will recognize the lender's lien against proceeds
from the sale of the cooperative apartment, subject, however, to the
cooperative's right to sums due under the proprietary lease or occupancy
agreement. The total amount owed to the cooperative by the tenant-stockholder,
which the lender generally cannot restrict and does not monitor, could reduce
the value of the collateral below the outstanding principal balance of the
cooperative loan and accrued and unpaid interest thereon.

     Recognition agreements also provide that in the event of a foreclosure on a
cooperative loan, the lender must obtain the approval or consent of the
cooperative as required by the proprietary lease before transferring the
cooperative shares or assigning the proprietary lease. Generally, the lender is
not limited in any rights it may have to dispossess the tenant-stockholders.

     In some states, foreclosure on the cooperative shares is accomplished by a
sale in accordance with the provisions of Article 9 of the Uniform Commercial
Code (the "UCC") and the security agreement relating to those shares. Article 9
of the UCC requires that a sale be conducted in a "commercially reasonable"
manner. Whether a foreclosure sale has been conducted in a "commercially
reasonable" manner will depend on the facts in each case. In determining
commercial reasonableness, a court will look to the notice given the debtor and
the method, manner, time, place and terms of the foreclosure. Generally, a sale
conducted according to the usual practice of banks selling similar collateral
will be considered reasonably conducted.

     Article 9 of the UCC provides that the proceeds of the sale will be applied
first to pay the costs and expenses of the sale and then to satisfy the
indebtedness secured by the lender's security interest. The recognition
agreement, however, generally provides that the lender's right to reimbursement
is subject to the right of the cooperative to receive sums due under the
proprietary lease or occupancy agreement. If there are proceeds remaining, the
lender must account to the tenant-stockholder for the surplus. Conversely, if a
portion of the indebtedness remains unpaid, the tenant-stockholder is generally
responsible for the deficiency. See "Anti-Deficiency Legislation and Other
Limitations on Lenders" below.

     In the case of foreclosure on a building which was converted from a rental
building to a building owned by a cooperative under a non-eviction plan, some
states require that a purchaser at a foreclosure sale take the property subject
to rent control and rent stabilization laws which apply to certain tenants who
elected to remain in the building but who did not purchase shares in the
cooperative when the building was so converted.

ENVIRONMENTAL RISKS

     Real property pledged as security to a lender may be subject to unforeseen
environmental risks. Environmental remedial costs can be substantial and can
potentially exceed the value of the property. Under the laws of certain states,
contamination of a property may give rise to a lien on the property to assure
the payment of the costs of clean-up. In several states that lien has priority
over the lien of an existing mortgage against the property. In addition, under
the federal Comprehensive Environmental Response, Compensation and Liability Act
of 1980 ("CERCLA"), the EPA may impose a lien on property where EPA has incurred
clean-up costs. However, a CERCLA lien is subordinate to pre-existing, perfected
security interests.

     Under the laws of some states, and under CERCLA, it is conceivable that a
secured lender may be held liable as an "owner" or "operator" for the costs of
addressing releases or threatened releases of hazardous substances at a
Property, even though the environmental damage or threat was caused by a prior
or current owner or operator. CERCLA imposes liability for the costs on any and
all "potentially responsible parties," including "owners" or "operators".
However, CERCLA excludes from the definition of "owner or operator" a secured
creditor who holds indicia of ownership primarily to protect its security
interest (the "secured creditor exemption") but without "participating in the
management" of the property. Thus, if a lender's activities encroach on the
actual management of a contaminated facility or property, the lender may incur
liability as an "owner or operator" under CERCLA. Similarly, if a lender
forecloses and takes title to a contaminated facility or property, the lender
may incur CERCLA liability in various circumstances, including, but not limited
to, when it fails to market the property in a timely fashion.

     Whether actions taken by a lender would constitute participation in the
management of a mortgaged property so as to render the secured creditor
exemption unavailable to a lender, was historically a matter of judicial


                                       69



interpretation of the statutory language. Court decisions were inconsistent and,
in fact, in 1990, the Court of Appeals for the Eleventh Circuit suggested that
the mere capacity of the lender to influence a borrower's decisions regarding
disposal of hazardous substances was sufficient participation in the management
of a borrower's business to deny the protection of the secured creditor
exemption to the lender. In 1996, Congress enacted the Asset Conservation,
Lender Liability and Deposit Insurance Protection Act ("Asset Conservation
Act"), which provides that, in order to be deemed to have participated in the
management of a mortgaged property, a lender must actually participate in the
operational affairs of the property. The Asset Conservation Act also provides
that participation in the management of the property does not include "merely
having the capacity to influence, or unexercised right to control" operations.
Rather, a lender will lose the protection of the secured creditor exemption only
if it (a) exercises decision making control over the borrower's environmental
compliance and hazardous substance handling and disposal practices at the
property, or (b) exercises control comparable to the manager of the property, so
that the lender has assumed responsibility for (i) "the overall management of
the facility encompassing day-to-day decision making with respect to
environmental compliance" or (ii) "over all or substantially all of the
operational functions" of the property other than environmental compliance.

     If a lender is or becomes liable, it may be able to bring an action for
contribution under CERCLA or other statutory or common laws against any other
"potentially responsible parties," including a previous owner or operator, who
created the environmental hazard, but those persons or entities may be bankrupt
or otherwise judgment proof. The costs associated with environmental cleanup may
be substantial. It is conceivable that the costs arising from the circumstances
set forth above would result in a loss to certificateholders.

     CERCLA does not apply to petroleum products, and the secured creditor
exemption does not govern liability for cleanup costs under state laws or under
federal laws other than CERCLA, including Subtitle I of the federal Resource
Conservation and Recovery Act ("RCRA"), which regulates underground petroleum
storage tanks (except heating oil tanks). The EPA has adopted a lender liability
rule for underground storage tanks under Subtitle I of RCRA. Under that rule, a
holder of a security interest in an underground storage tank or real property
containing an underground storage tank is not considered an operator of the
underground storage tank as long as petroleum is not added to, stored in or
dispensed from the tank. Moreover, under the Asset Conservation Act, the
protections accorded to lenders under CERCLA are also accorded to holders of
security interests in underground petroleum storage tanks or the properties on
which they are located. A lender will lose the protections accorded to secured
creditors under federal law for petroleum underground storage tanks by
"participating in the management" of the tank or tank system if the lender
either: (a) "exercises decisionmaking control over the operational" aspects of
the tank or tank system; or (b) exercises control comparable to a manager of the
property, so that the lender has assumed responsibility for overall management
of the property including day-to-day decision making with regard to all, or
substantially all, operational aspects. It should be noted, however, that
liability for cleanup of petroleum contamination may be governed by state law,
which may not provide for any specific protection for secured creditors.

     While the "owner" or "operator" of contaminated property may face liability
for investigating and cleaning up the property, regardless of fault, it may also
be required to comply with environmental regulatory requirements, such as those
governing asbestos. In addition, the presence of asbestos, mold, lead-based
paint, lead in drinking water, and/or radon at a real property may lead to the
incurrence of costs for remediation, mitigation or the implementation of an
operations and maintenance plan. Furthermore, the presence of asbestos, mold,
lead-based paint, lead in drinking water, radon and/or contamination at a
property may present a risk that third parties will seek recovery from "owners"
or "operators" of that property for personal injury or property damage.
Environmental regulatory requirements for property "owners" or "operators," or
law that is the basis for claims of personal injury or property damage, may not
have exemptions for secured creditors.

     In general, at the time the loans were originated no environmental
assessment, or a very limited environmental assessment, of the Properties was
conducted.

RIGHTS OF REDEMPTION

     In some states, after sale pursuant to a deed of trust or foreclosure of a
mortgage, the borrower and foreclosed junior lienors are given a statutory
period in which to redeem the property from the foreclosure sale. In certain
other states (including California), this right of redemption applies only to
sales following judicial


                                       70



foreclosure, and not to sales pursuant to a non-judicial power of sale. In most
states where the right of redemption is available, statutory redemption may
occur upon payment of the foreclosure purchase price, accrued interest and
taxes. In other states, redemption may be authorized if the former borrower pays
only a portion of the sums due. The effect of a statutory right of redemption is
to diminish the ability of the lender to sell the foreclosed property. The
exercise of a right of redemption would defeat the title of any purchaser from
the lender subsequent to foreclosure or sale under a deed of trust.
Consequently, the practical effect of the redemption right is to force the
lender to retain the property and pay the expenses of ownership until the
redemption period has run. In some states, there is no right to redeem property
after a trustee's sale under a deed of trust.

ANTI-DEFICIENCY LEGISLATION AND OTHER LIMITATIONS ON LENDERS

     Certain states have imposed statutory and judicial restrictions that limit
the remedies of a beneficiary under a deed of trust or a mortgagee under a
mortgage. In some states, including California, statutes and case law limit the
right of the beneficiary or mortgagee to obtain a deficiency judgment against
borrowers financing the purchase of their residence or following sale under a
deed of trust or certain other foreclosure proceedings. A deficiency judgment is
a personal judgment against the borrower equal in most cases to the difference
between the amount due to the lender and the fair market value of the real
property at the time of the foreclosure sale. In certain states, including
California, if a lender simultaneously originates a loan secured by a senior
lien on a particular property and a loan secured by a junior lien on the same
property, that lender as the holder of the junior lien may be precluded from
obtaining a deficiency judgment with respect to the excess of the aggregate
amount owed under both loans over the proceeds of any sale under a deed of trust
or other foreclosure proceedings. As a result of these prohibitions, it is
anticipated that in most instances the master servicer will utilize the
non-judicial foreclosure remedy and will not seek deficiency judgments against
defaulting borrowers.

     Some state statutes require the beneficiary or mortgagee to exhaust the
security afforded under a deed of trust or mortgage by foreclosure in an attempt
to satisfy the full debt before bringing a personal action against the borrower.
In certain other states, the lender has the option of bringing a personal action
against the borrower on the debt without first exhausting that security;
however, in some of these states, the lender, following judgment on that
personal action, may be deemed to have elected a remedy and may be precluded
from exercising remedies with respect to the security. Consequently, the
practical effect of the election requirement, when applicable, is that lenders
will usually proceed first against the security rather than bringing a personal
action against the borrower. In some states, exceptions to the anti-deficiency
statutes are provided for in certain instances where the value of the lender's
security has been impaired by acts or omissions of the borrower, for example, in
the event of waste of the property. Finally, other statutory provisions limit
any deficiency judgment against the former borrower following a foreclosure sale
to the excess of the outstanding debt over the fair market value of the property
at the time of the public sale. The purpose of these statutes is generally to
prevent a beneficiary or a mortgagee from obtaining a large deficiency judgment
against the former borrower as a result of low or no bids at the foreclosure
sale.

     Generally, Article 9 of the UCC governs foreclosure on cooperative shares
and the related proprietary lease or occupancy agreement. Some courts have
interpreted section 9-504 of the UCC to prohibit a deficiency award unless the
creditor establishes that the sale of the collateral (which, in the case of a
cooperative loan, would be the shares of the cooperative and the related
proprietary lease or occupancy agreement) was conducted in a commercially
reasonable manner.

     In addition to anti-deficiency and related legislation, numerous other
federal and state statutory provisions, including the federal bankruptcy laws,
and state laws affording relief to debtors, may interfere with or affect the
ability of the secured mortgage lender to realize upon its security. For
example, in a proceeding under the federal Bankruptcy Code, a lender may not
foreclose on a mortgaged property without the permission of the bankruptcy
court. The rehabilitation plan proposed by the debtor may provide, if the
mortgaged property is not the debtor's principal residence and the court
determines that the value of the mortgaged property is less than the principal
balance of the mortgage loan, for the reduction of the secured indebtedness to
the value of the mortgaged property as of the date of the commencement of the
bankruptcy, rendering the lender a general unsecured creditor for the
difference, and also may reduce the monthly payments due under the mortgage
loan, change the rate of interest and alter the mortgage loan repayment
schedule. The effect of any proceedings under the federal Bankruptcy Code,
including but not limited to any automatic stay, could result in delays in
receiving payments on the loans underlying a series of securities and possible
reductions in the aggregate amount of the payments.


                                       71



     The federal tax laws provide priority to certain tax liens over the lien of
a mortgage or secured party.

DUE-ON-SALE CLAUSES

     Generally, each conventional loan will contain a due-on-sale clause which
will generally provide that if the mortgagor or obligor sells, transfers or
conveys the Property, the loan or contract may be accelerated by the mortgagee
or secured party. Court decisions and legislative actions have placed
substantial restriction on the right of lenders to enforce the clauses in many
states. For instance, the California Supreme Court in August 1978 held that
due-on-sale clauses were generally unenforceable. However, the Garn-St Germain
Depository Institutions Act of 1982 (the "Garn-St Germain Act"), subject to
certain exceptions, preempts state constitutional, statutory and case law
prohibiting the enforcement of due-on-sale clauses. As a result, due-on-sale
clauses have become generally enforceable except in those states whose
legislatures exercised their authority to regulate the enforceability of the
clauses with respect to mortgage loans that were (i) originated or assumed
during the "window period" under the Garn-St Germain Act which ended in all
cases not later than October 15, 1982, and (ii) originated by lenders other than
national banks, federal savings institutions and federal credit unions. FHLMC
has taken the position in its published mortgage servicing standards that, out
of a total of eleven "window period states," five states (Arizona, Michigan,
Minnesota, New Mexico and Utah) have enacted statutes extending, on various
terms and for varying periods, the prohibition on enforcement of due-on-sale
clauses with respect to certain categories of window period loans. Also, the
Garn-St Germain Act does "encourage" lenders to permit assumption of loans at
the original rate of interest or at some other rate less than the average of the
original rate and the market rate.

     As to loans secured by an owner-occupied residence, the Garn-St Germain Act
sets forth nine specific instances in which a mortgagee covered by the Act may
not exercise its rights under a due-on-sale clause, notwithstanding the fact
that a transfer of the property may have occurred. The inability to enforce a
due-on-sale clause may result in transfer of the related Property to an
uncreditworthy person, which could increase the likelihood of default or may
result in a mortgage bearing an interest rate below the current market rate
being assumed by a new home buyer, which may affect the average life of the
loans and the number of loans which may extend to maturity.

     In addition, under federal bankruptcy law, due-on-sale clauses may not be
enforceable in bankruptcy proceedings and may, under certain circumstances, be
eliminated in any modified mortgage resulting from the bankruptcy proceeding.

ENFORCEABILITY OF PREPAYMENT AND LATE PAYMENT FEES

     Forms of notes, mortgages and deeds of trust used by lenders may contain
provisions obligating the borrower to pay a late charge if payments are not
timely made, and in some circumstances may provide for prepayment fees or
charges if the obligation is paid prior to maturity. In certain states, there
are or may be specific limitations upon the late charges which a lender may
collect from a borrower for delinquent payments. Certain states also limit the
amounts that a lender may collect from a borrower as an additional charge if the
loan is prepaid. Under certain state laws, prepayment charges may not be imposed
after a certain period of time following the origination of mortgage loans with
respect to prepayments on loans secured by liens encumbering owner-occupied
residential properties. Since many of the Properties will be owner-occupied, it
is anticipated that prepayment charges may not be imposed with respect to many
of the loans. The absence of that restraint on prepayment, particularly with
respect to fixed rate loans having higher Loan Rates, may increase the
likelihood of refinancing or other early retirement of the loans or contracts.
Late charges and prepayment fees are typically retained by servicers as
additional servicing compensation.

APPLICABILITY OF USURY LAWS

     Title V of the Depository Institutions Deregulation and Monetary Control
Act of 1980, enacted in March 1980 ("Title V") provides that state usury
limitations shall not apply to certain types of residential first mortgage loans
originated by certain lenders after March 31, 1980. The Office of Thrift
Supervision, as successor to the Federal Home Loan Bank Board, is authorized to
issue rules and regulations and to publish interpretations governing
implementation of Title V. The statute authorized the states to reimpose
interest rate limits by adopting, before April 1, 1983, a law or constitutional
provision which expressly rejects an application of the federal law. Fifteen
states adopted a law prior to the April 1, 1983 deadline. In addition, even
where Title V is not so rejected, any state


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is authorized by the law to adopt a provision limiting discount points or other
charges on mortgage loans covered by Title V. Certain states have taken action
to reimpose interest rate limits and/or to limit discount points or other
charges.

HOME IMPROVEMENT FINANCE

     General. The trust fund may own home improvement loans ("HI Loans") or home
improvement sales contracts ("HI Contracts"). HI Loans are loans that are made
by lenders to finance the purchase of home improvements from third party
sellers, and may be secured by real estate or personal property. HI Contracts
involve sales agreements under which sellers of home improvements extend credit
to the purchasers and retain personal property security interests in the home
improvements as collateral for repayment of the credits.

     Real Estate Collateral. HI Loans secured by real estate generally are
subject to many of the same laws that apply to other types of mortgage loans,
especially laws applicable to home equity or junior lien mortgages. In addition,
some laws may provide particular consumer protections in connection with
mortgage loans that are used to finance home improvements, such as special
disclosures or limits on creditor remedies.

     Sale of Chattel Paper. The credit agreements evidencing HI Loans secured by
personal property and HI Contracts generally are "chattel paper" as defined in
the UCC. Pursuant to the UCC, the sale of chattel paper is treated in a manner
similar to perfection of a security interest in chattel paper. Under the related
agreement, the depositor will transfer physical possession of the chattel paper
to the trustee or a designated custodian or may retain possession of the chattel
paper as custodian for the trustee. In addition, the depositor will make an
appropriate filing of a UCC-1 financing statement in the appropriate states to,
among other things, give notice of the trust's ownership of the chattel paper.
In general, the chattel paper will not be stamped or otherwise marked to reflect
assignment of the chattel paper from the depositor to the trustee. Therefore, if
through negligence, fraud or otherwise, a subsequent purchaser were able to take
physical possession of the chattel paper without notice of the assignment, the
trust's interest in the chattel paper could be defeated.

     Perfection of Personal Property Security Interests. The HI Loans secured by
personal property and the HI Contracts generally include a "purchase money
security interest," as defined in the UCC, in the home improvements being
financed. A financing statement generally is not required to be filed to perfect
a purchase money security interest in consumer goods. Purchase money security
interests are assignable. In general, a purchase money security interest grants
to the holder a security interest that has priority over a conflicting security
interest in the same collateral and the proceeds of the collateral. However, to
the extent that the collateral subject to a purchase money security interest
becomes a fixture, in order for the related purchase money security interest to
take priority over a conflicting interest in the fixture, the holder's interest
in the home improvement must generally be perfected by a timely fixture filing.
In general, a security interest does not exist under the UCC in ordinary
building materials incorporated into an improvement on land. A security interest
in lumber, bricks, other types of ordinary building materials or other goods
that are deemed to lose that characterization upon incorporation of the
materials into the related property, will not be secured by a purchase money
security interest in the home improvement being financed.

     Enforcement of Security Interest in Home Improvements. So long as the home
improvement remains personal property and has not become subject to the real
estate law, a creditor with a security interest in the property can repossess
the home improvement by voluntary surrender, by "self-help" repossession that is
"peaceful" (i.e., without breach of the peace) or, in the absence of voluntary
surrender and the ability to repossess without breach of the peace, by judicial
process. The holder of a security interest must give the debtor a number of
days' notice, which generally varies from 10 to 30 days depending on the state,
prior to commencement of any repossession. The UCC and consumer protection laws
in most states place restrictions on repossession sales, including requiring
prior notice to the debtor and commercial reasonableness in effecting that sale.

     Under the laws applicable in many states, a creditor is entitled to obtain
a deficiency judgment from a debtor for any deficiency on repossession and
resale of the personal property securing the debtor's loan. However, some states
impose prohibitions or limitations on deficiency judgments, and in many cases
the defaulting borrower would have no assets with which to pay a judgment. Also,
certain other statutory provisions, including federal and state bankruptcy and
insolvency laws and general equitable principles, may limit or delay the ability
of a creditor to repossess and resell personal property collateral or enforce a
deficiency judgment.


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     Consumer Claims and Defenses. The Federal Trade Commission's Consumer
Claims and Defenses Rule ("FTC Rule") provides that a seller financing the sale
of consumer goods or services must include in the consumer credit contract a
notice that the purchaser of the contract will take the contract subject to the
claims and defenses that the consumer could assert against the seller. The FTC
Rule also provides that, if a seller of consumer goods or services refers a
purchaser to a lender, or is affiliated with the lender by common control,
contract or business arrangement, the seller may not accept the proceeds of a
purchase money loan made by the lender unless the consumer credit contract
contains a notice that the holder of the contract is subject to the claims and
defenses that the consumer could assert against the seller. Thus, holders of HI
Contracts and certain HI Loans may be subject to claims and defenses that could
be asserted against the seller of home improvements. Liability under the FTC
Rule generally is limited to amounts received by the holder of the consumer
credit obligation; however, the consumer may be able to assert the FTC Rule as a
defense to a claim brought by the trustee against the consumer.

SERVICEMEMBERS CIVIL RELIEF ACT

     Generally, under the terms of the Servicemembers Civil Relief Act (the
"Relief Act"), a borrower who enters military service after the origination of
the borrower's loan (including a borrower who is a member of the National Guard
or is in reserve status at the time of the origination of the loan and is later
called to active duty) may not be charged interest above an annual rate of 6%
during the period of the borrower's active duty status, unless a court orders
otherwise upon application of the lender. It is possible that the interest rate
limitation could have an effect, for an indeterminate period of time, on the
ability of the master servicer to collect full amounts of interest on certain of
the loans. Unless otherwise provided in the related prospectus supplement, any
shortfall in interest collections resulting from the application of the Relief
Act could result in losses to securityholders. The Relief Act also imposes
limitations which would impair the ability of the master servicer to foreclose
on an affected loan during the borrower's period of active duty status.
Moreover, the Relief Act permits the extension of a loan's maturity and the re-
adjustment of its payment schedule beyond the completion of military service.
Thus, in the event that the loan goes into default, there may be delays and
losses occasioned by the inability to realize upon the Property in a timely
fashion.

JUNIOR MORTGAGES AND RIGHTS OF SENIOR MORTGAGEES

     To the extent that the loans comprising the trust fund for a series are
secured by mortgages which are junior to other mortgages held by other lenders
or institutional investors, the rights of the trust fund (and therefore the
securityholders), as mortgagee under a junior mortgage, are subordinate to those
of any mortgagee under any senior mortgage. The senior mortgagee has the right
to receive hazard insurance and condemnation proceeds and to cause the property
securing the loan to be sold upon default of the mortgagor, thereby
extinguishing the junior mortgagee's lien unless the junior mortgagee asserts
its subordinate interest in the property in foreclosure litigation and,
possibly, satisfies the defaulted senior mortgage. A junior mortgagee may
satisfy a defaulted senior loan in full and, in some states, may cure a default
and bring the senior loan current, in either event adding the amounts expended
to the balance due on the junior loan. In many states, absent a provision in the
mortgage or deed of trust, no notice of default is required to be given to a
junior mortgagee.

OTHER LOAN PROVISIONS AND LENDER REQUIREMENTS

     The standard form of the mortgage used by most institutional lenders
confers on the mortgagee the right both to receive all proceeds collected under
any hazard insurance policy and all awards made in connection with condemnation
proceedings, and to apply those proceeds and awards to any indebtedness secured
by the mortgage, in the order as the mortgagee may determine. Thus, in the event
improvements on the property are damaged or destroyed by fire or other casualty,
or in the event the property is taken by condemnation, the mortgagee or
beneficiary under senior mortgages will have the prior right to collect any
insurance proceeds payable under a hazard insurance policy and any award of
damages in connection with the condemnation and to apply the same to the
indebtedness secured by the senior mortgages. Proceeds in excess of the amount
of senior mortgage indebtedness, in most cases, may be applied to the
indebtedness of a junior mortgage. Lenders in California may not require a
borrower to provide property insurance for more than the replacement cost of the
improvements, even if the loan balance exceeds this amount. In the event of a
casualty, lenders may be required to make the insurance proceeds available to
the borrower for repair and restoration, rather than applying the proceeds to
outstanding indebtedness.


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     Another provision sometimes found in the form of the mortgage or deed of
trust used by institutional lenders obligates the mortgagor to pay before
delinquency all taxes and assessments on the property and, when due, all
encumbrances, charges and liens on the property which appear prior to the
mortgage or deed of trust, to provide and maintain fire insurance on the
property, to maintain and repair the property and not to commit or permit any
waste thereof, and to appear in and defend any action or proceeding purporting
to affect the property or the rights of the mortgagee under the mortgage. Upon a
failure of the mortgagor to perform any of these obligations, the mortgagee is
given the right under certain mortgages to perform the obligation itself, at its
election, with the mortgagor agreeing to reimburse the mortgagee for any sums
expended by the mortgagee on behalf of the mortgagor. All sums so expended by
the mortgagee become part of the indebtedness secured by the mortgage. In some
cases lenders require borrowers to make monthly deposits for estimated real
estate taxes and property insurance premiums. Certain states, including
California, impose limitations on both the amount of tax and insurance impounds
that may be collected from a borrower, and upon the application of the impounded
funds.

     Generally lenders begin charging interest from the date the loan is
disbursed. In California regulations may prohibit mortgage lenders financing
residential purchases from charging interest on loan amounts outstanding for
periods more than one day prior to the recording of the deed to the residence,
even though the loan proceeds have been disbursed into escrow.

PRIORITY OF ADDITIONAL ADVANCES

     The form of credit line trust deed or mortgage generally used by most
institutional lenders which make revolving credit line loans typically contains
a "future advance" clause, which provides, in essence, that additional amounts
advanced to or on behalf of the borrower by the beneficiary or lender are to be
secured by the deed of trust or mortgage. The priority of the lien securing any
advance made under the clause may depend in most states on whether the deed of
trust or mortgage is called and recorded as a credit line deed of trust or
mortgage. If the beneficiary or lender advances additional amounts, the advance
is entitled to receive the same priority as amounts initially advanced under the
trust deed or mortgage, notwithstanding the fact that there may be junior trust
deeds or mortgages and other liens which intervene between the date of recording
of the trust deed or mortgage and the date of the future advance, and
notwithstanding that the beneficiary or lender had actual knowledge of the
intervening junior trust deeds or mortgages and other liens at the time of the
advance. In most states, the trust deed or mortgage lien securing mortgage loans
of the type which includes home equity credit lines applies retroactively to the
date of the original recording of the trust deed or mortgage, provided that the
total amount of advances under the home equity credit line does not exceed the
maximum specified principal amount of the recorded trust deed or mortgage,
except as to advances made after receipt by the lender of a written notice of
lien from a judgment lien creditor of the trustor. In California priority will
be lost with respect to advances made under subsequently recorded deeds of trust
or mortgages, if the prior credit line lender has knowledge of the advances
unless the advances under the secured credit line are determined to be
"obligatory" rather than "discretionary."

THE TITLE I PROGRAM

     General. Certain of the loans contained in a trust fund may be loans
insured under the FHA Title I Credit Insurance program created pursuant to
Sections 1 and 2(a) of the National Housing Act of 1934 (the "Title I Program").
Under the Title I Program, the FHA is authorized and empowered to insure
qualified lending institutions against losses on eligible loans. The Title I
Program operates as a coinsurance program in which the FHA insures up to 90% of
certain losses incurred on an individual insured loan, including the unpaid
principal balance of the loan, but only to the extent of the insurance coverage
available in the lender's FHA insurance coverage reserve account. The owner of
the loan bears the uninsured loss on each loan.

     The types of loans which are eligible for insurance by the FHA under the
Title I Program include property improvement loans ("Property Improvement Loans"
or "Title I Loans"). A Property Improvement Loan or Title I Loan means a loan
made to finance actions or items that substantially protect or improve the basic
livability or utility of a property and includes single family improvement
loans.

     There are two basic methods of lending or originating those loans which
include a "direct loan" or a "dealer loan". With respect to a direct loan, the
borrower makes application directly to a lender without any assistance from a
dealer, which application may be filled out by the borrower or by a person
acting at the direction of the borrower


                                       75



who does not have a financial interest in the loan transaction, and the lender
may disburse the loan proceeds solely to the borrower or jointly to the borrower
and other parties to the transaction. With respect to a dealer loan, the dealer,
who has a direct or indirect financial interest in the loan transaction, assists
the borrower in preparing the loan application or otherwise assists the borrower
in obtaining the loan from lender and the lender may distribute proceeds solely
to the dealer or the borrower or jointly to the borrower and the dealer or other
parties. With respect to a dealer Title I Loan, a dealer may include a seller, a
contractor or supplier of goods or services.

     Loans insured under the Title I Program are required to have fixed interest
rates and, generally, provide for equal installment payments due weekly,
biweekly, semi-monthly or monthly, except that a loan may be payable quarterly
or semi-annually in order to correspond with the borrower's irregular flow of
income. The first or last payments (or both) may vary in amount but may not
exceed 150% of the regular installment payment, and the first scheduled payment
may be due no later than two months from the date of the loan. The note must
contain a provision permitting full or partial prepayment of the loan. The
interest rate may be established by the lender and must be fixed for the term of
the loan and recited in the note. Interest on an insured loan must accrue from
the date of the loan and be calculated on a simple interest basis. The lender
must assure that the note and all other documents evidencing the loan are in
compliance with applicable federal, state and local laws.

     Each insured lender is required to use prudent lending standards in
underwriting individual loans and to satisfy the applicable loan underwriting
requirements under the Title I Program prior to its approval of the loan and
disbursement of loan proceeds. Generally, the lender must exercise prudence and
diligence to determine whether the borrower and any co-maker is solvent and an
acceptable credit risk, with a reasonable ability to make payments on the loan
obligation. The lender's credit application and review must determine whether
the borrower's income will be adequate to meet the periodic payments required by
the loan, as well as the borrower's other housing and recurring expenses, which
determination must be made in accordance with the expense-to-income ratios
published by the Secretary of HUD.

     Under the Title I Program, the FHA does not review or approve for
qualification for insurance the individual loans insured thereunder at the time
of approval by the lending institution (as is typically the case with other
federal loan programs). If, after a loan has been made and reported for
insurance under the Title I Program, the lender discovers any material
misstatement of fact or that the loan proceeds have been misused by the
borrower, dealer or any other party, it shall promptly report this to the FHA.
In that case, provided that the validity of any lien on the property has not
been impaired, the insurance of the loan under the Title I Program will not be
affected unless the material misstatements of fact or misuse of loan proceeds
was caused by (or was knowingly sanctioned by) the lender or its employees.

     Requirements for Title I Loans. The maximum principal amount for Title I
Loans must not exceed the actual cost of the project plus any applicable fees
and charges allowed under the Title I Program; provided that the maximum amount
does not exceed $25,000 (or the current applicable amount) for a single family
property improvement loan. Generally, the term of a Title I Loan may not be less
than six months nor greater than 20 years and 32 days. A borrower may obtain
multiple Title I Loans with respect to multiple properties, and a borrower may
obtain more than one Title I Loan with respect to a single property, in each
case as long as the total outstanding balance of all Title I Loans in the same
property does not exceed the maximum loan amount for the type of Title I Loan
thereon having the highest permissible loan amount.

     Borrower eligibility for a Title I Loan requires that the borrower have at
least a one-half interest in either fee simple title to the real property, a
lease thereof for a term expiring at least six months after the final maturity
of the Title I Loan or a recorded land installment contract for the purchase of
the real property, and that the borrower have equity in the property being
improved at least equal to the amount of the Title I Loan if the loan amount
exceeds $15,000. Any Title I Loan in excess of $7,500 must be secured by a
recorded lien on the improved property which is evidenced by a mortgage or deed
of trust executed by the borrower and all other owners in fee simple.

     The proceeds from a Title I Loan may be used only to finance property
improvements which substantially protect or improve the basic livability or
utility of the property as disclosed in the loan application. The Secretary of
HUD has published a list of items and activities which cannot be financed with
proceeds from any Title I Loan and from time to time the Secretary of HUD may
amend the list of items and activities. With respect to any dealer Title I Loan,
before the lender may disburse funds, the lender must have in its possession a
completion certificate on a


                                       76



HUD approved form, signed by the borrower and the dealer. With respect to any
direct Title I Loan, the borrower is required to submit to the lender, promptly
upon completion of the improvements but not later than six months after
disbursement of the loan proceeds with one six month extension if necessary, a
completion certificate, signed by the borrower. The lender or its agent is
required to conduct an on-site inspection on any Title I Loan where the
principal obligation is $7,500 or more, and on any direct Title I Loan where the
borrower fails to submit a completion certificate.

     FHA Insurance Coverage. Under the Title I Program the FHA establishes an
insurance coverage reserve account for each lender which has been granted a
Title I insurance contract. The amount of insurance coverage in this account is
10% of the amount disbursed, advanced or expended by the lender in originating
or purchasing eligible loans registered with FHA for Title I insurance, with
certain adjustments. The balance in the insurance coverage reserve account is
the maximum amount of insurance claims the FHA is required to pay. Loans to be
insured under the Title I Program will be registered for insurance by the FHA
and the insurance coverage attributable to the loans will be included in the
insurance coverage reserve account for the originating or purchasing lender
following the receipt and acknowledgment by the FHA of a loan report on the
prescribed form pursuant to the Title I regulations. The FHA charges a fee of
0.50% per annum of the net proceeds (the original balance) of any eligible loan
so reported and acknowledged for insurance by the originating lender. The FHA
bills the lender for the insurance premium on each insured loan annually, on
approximately the anniversary date of the loan's origination. If an insured loan
is prepaid during the year, FHA will not refund the insurance premium, but will
abate any insurance charges falling due after the prepayment.

     Under the Title I Program the FHA will reduce the insurance coverage
available in the lender's FHA insurance coverage reserve account with respect to
loans insured under the lender's contract of insurance by (i) the amount of the
FHA insurance claims approved for payment relating to the insured loans and (ii)
the amount of insurance coverage attributable to insured loans sold by the
lender. The balance of the lender's FHA insurance coverage reserve account will
be further adjusted as required under Title I or by the FHA, and the insurance
coverage therein may be earmarked with respect to each or any eligible loans
insured thereunder, if a determination is made by the Secretary of HUD that it
is in its interest to do so. Originations and acquisitions of new eligible loans
will continue to increase a lender's insurance coverage reserve account balance
by 10% of the amount disbursed, advanced or expended in originating or acquiring
the eligible loans registered with the FHA for insurance under the Title I
Program. The Secretary of HUD may transfer insurance coverage between insurance
coverage reserve accounts with earmarking with respect to a particular insured
loan or group of insured loans when a determination is made that it is in the
Secretary's interest to do so.

     The lender may transfer (except as collateral in a bona fide loan
transaction) insured loans and loans reported for insurance only to another
qualified lender under a valid Title I contract of insurance. Unless an insured
loan is transferred with recourse or with a guaranty or repurchase agreement,
the FHA, upon receipt of written notification of the transfer of the loan in
accordance with the Title I regulations, will transfer from the transferor's
insurance coverage reserve account to the transferee's insurance coverage
reserve account an amount, if available, equal to 10% of the actual purchase
price or the net unpaid principal balance of the loan (whichever is less).
However, under the Title I Program not more than $5,000 in insurance coverage
shall be transferred to or from a lender's insurance coverage reserve account
during any October 1 to September 30 period without the prior approval of the
Secretary of HUD.

     Claims Procedures Under Title I. Under the Title I Program the lender may
accelerate an insured loan following a default on the loan only after the lender
or its agent has contacted the borrower in a face-to-face meeting or by
telephone to discuss the reasons for the default and to seek its cure. If the
borrower does not cure the default or agree to a modification agreement or
repayment plan, the lender will notify the borrower in writing that, unless
within 30 days the default is cured or the borrower enters into a modification
agreement or repayment plan, the loan will be accelerated and that, if the
default persists, the lender will report the default to an appropriate credit
agency. The lender may rescind the acceleration of maturity after full payment
is due and reinstate the loan only if the borrower brings the loan current,
executes a modification agreement or agrees to an acceptable repayment plan.

     Following acceleration of maturity upon a secured Title I Loan, the lender
may either (a) proceed against the property under any security instrument, or
(b) make a claim under the lender's contract of insurance. If the lender chooses
to proceed against the property under a security instrument (or if it accepts a
voluntary conveyance


                                       77



or surrender of the property), the lender may file an insurance claim only with
the prior approval of the Secretary of HUD.

     When a lender files an insurance claim with the FHA under the Title I
Program, the FHA reviews the claim, the complete loan file and documentation of
the lender's efforts to obtain recourse against any dealer who has agreed
thereto, certification of compliance with applicable state and local laws in
carrying out any foreclosure or repossession, and evidence that the lender has
properly filed proofs of claims, where the borrower is bankrupt or deceased.
Generally, a claim for reimbursement for loss on any Title I Loan must be filed
with the FHA no later than nine months after the date of default of the loan.
Concurrently with filing the insurance claim, the lender shall assign to the
United States of America the lender's entire interest in the loan note (or a
judgment in lieu of the note), in any security held and in any claim filed in
any legal proceedings. If, at the time the note is assigned to the United
States, the Secretary has reason to believe that the note is not valid or
enforceable against the borrower, the FHA may deny the claim and reassign the
note to the lender. If either defect is discovered after the FHA has paid a
claim, the FHA may require the lender to repurchase the paid claim and to accept
a reassignment of the loan note. If the lender subsequently obtains a valid and
enforceable judgment against the borrower, the lender may resubmit a new
insurance claim with an assignment of the judgment. The FHA may contest any
insurance claim and make a demand for repurchase of the loan at any time up to
two years from the date the claim was certified for payment and may do so
thereafter in the event of fraud or misrepresentation on the part of the lender.

     Under the Title I Program the amount of an FHA insurance claim payment,
when made, is equal to the Claimable Amount, up to the amount of insurance
coverage in the lender's insurance coverage reserve account. For the purposes
hereof, the "Claimable Amount" means an amount equal to 90% of the sum of: (a)
the unpaid loan obligation (net unpaid principal and the uncollected interest
earned to the date of default) with adjustments thereto if the lender has
proceeded against property securing the loan; (b) the interest on the unpaid
amount of the loan obligation from the date of default to the date of the
claim's initial submission for payment plus 15 calendar days (but not to exceed
9 months from the date of default), calculated at the rate of 7% per annum; (c)
the uncollected court costs; (d) the attorney's fees not to exceed $500; and (e)
the expenses for recording the assignment of the security to the United States.

CONSUMER PROTECTION LAWS

     Federal, state and local laws extensively regulate various aspects of
brokering, originating, servicing and collecting loans secured by consumers'
dwellings. Among other things, these laws may regulate interest rates and other
charges, require disclosures, impose financial privacy requirements, mandate
specific business practices, and prohibit unfair and deceptive trade practices.
In addition, licensing requirements may be imposed on persons that broker,
originate, service or collect the loans.

     Additional requirements may be imposed under federal, state or local laws
on so-called "high cost mortgage loans," which typically are defined as loans
secured by a consumer's dwelling that have interest rates or origination costs
in excess of prescribed levels. These laws may limit certain loan terms, such as
prepayment charges, or the ability of a creditor to refinance a loan unless it
is in the borrower's interest. In addition, certain of these laws may allow
claims against loan brokers or originators, including claims based on fraud or
misrepresentations, to be asserted against persons acquiring the loans, such as
the trust fund.

     The federal laws that may apply to loans held in the trust fund include the
following:

o    the Truth in Lending Act and its regulations, which (among other things)
     require disclosures to borrowers regarding the terms of loans and provide
     consumers who pledged their principal dwelling as collateral in a
     non-purchase money transaction with a right of rescission that generally
     extends for three days after proper disclosures are given;

o    the Home Ownership and Equity Protection Act and its regulations, which
     (among other things) imposes additional disclosure requirements and
     limitations on loan terms with respect to non- purchase money, installment
     loans secured by the consumer's principal dwelling that have interest rates
     or origination costs in excess of prescribed levels;


                                       78



o    the Home Equity Loan Consumer Protection Act and its regulations, which
     (among other things) limits changes that may be made to open-end loans
     secured by the consumer's dwelling, and restricts the ability to accelerate
     balances or suspend credit privileges on the loans;

o    the Real Estate Settlement Procedures Act and its regulations, which (among
     other things) prohibit the payment of referral fees for real estate
     settlement services (including mortgage lending and brokerage services) and
     regulate escrow accounts for taxes and insurance and billing inquiries made
     by borrowers;

o    the Equal Credit Opportunity Act and its regulations, which (among other
     things) generally prohibits discrimination in any aspect of a credit
     transaction on certain enumerated basis, such as age, race, color, sex,
     religion, marital status, national origin or receipt of public assistance;

o    the Fair Credit Reporting Act, which (among other things) regulates the use
     of consumer reports obtained from consumer reporting agencies and the
     reporting of payment histories to consumer reporting agencies; and

o    the Federal Trade Commission's Rule on Preservation of Consumer Claims and
     Defenses, which generally provides that the rights of an assignee of a
     conditional sales contract (or of certain lenders making purchase money
     loans) to enforce a consumer credit obligation are subject to the claims
     and defenses that the consumer could assert against the seller of goods or
     services financed in the credit transaction.

     The penalties for violating these federal, state, or local laws vary
depending on the applicable law and the particular facts of the situation.
However, private plaintiffs typically may assert claims for actual damages and,
in some cases, also may recover civil money penalties or exercise a right to
rescind the loan. Violations of certain laws may limit the ability to collect
all or part of the principal or interest on a loan and, in some cases, borrowers
even may be entitled to a refund of amounts previously paid. Federal, state and
local administrative or law enforcement agencies also may be entitled to bring
legal actions, including actions for civil money penalties or restitution, for
violations of certain of these laws.

     Depending on the particular alleged misconduct, it is possible that claims
may be asserted against various participants in secondary market transactions,
including assignees that hold the loans, such as the trust fund. Losses on loans
from the application of these federal, state and local laws that are not
otherwise covered by a credit enhancement will be borne by the holders of one or
more classes of securities.

                    MATERIAL FEDERAL INCOME TAX CONSEQUENCES

GENERAL

     The following is a discussion of the anticipated material federal income
tax consequences of the purchase, ownership, and disposition of the securities
and is based on advice of special counsel to the depositor ("Tax Counsel"),
named in the prospectus supplement. The discussion is based upon the provisions
and interpretations of the Code, the regulations promulgated thereunder,
including, where applicable, proposed regulations, and the judicial and
administrative rulings and decisions now in effect, all of which are subject to
change, which change could apply retroactively.

     The discussion does not purport to deal with all aspects of federal income
taxation that may affect particular investors in light of their individual
circumstances, nor with certain types of investors subject to special treatment
under the federal income tax laws. This discussion focuses primarily upon
investors who will hold securities as "capital assets" (generally, property held
for investment) within the meaning of Section 1221 of the Code, but much of the
discussion is applicable to other investors as well. Prospective Investors are
encouraged to consult their own tax advisers concerning the federal, state,
local and any other tax consequences to them of the purchase, ownership and
disposition of the securities.


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     The federal income tax consequences to Holders will vary depending on
whether

o    the securities of a series are classified as indebtedness;

o    an election is made to treat the trust fund relating to a particular series
     of securities as a real estate mortgage investment conduit ("REMIC") under
     the Internal Revenue Code of 1986, as amended (the "Code");

o    the securities represent an ownership interest in some or all of the assets
     included in the trust fund for a series; or

o    an election is made to treat the trust fund relating to a particular series
     of certificates as a partnership.

     The prospectus supplement for each series of securities will specify how
the securities will be treated for federal income tax purposes and will discuss
whether a REMIC election, if any, will be made with respect to the series. The
depositor will file with the SEC a Form 8-K on behalf of the related trust fund
containing an opinion of Tax Counsel with respect to the validity of the
information set forth under "Material Federal Income Tax Consequences" herein
and in the related prospectus supplement.

TAXATION OF DEBT SECURITIES

     Interest and Acquisition Discount. The income on securities representing
regular interests in a REMIC ("Regular Interest Securities") are generally
taxable to holders in the same manner as the income on evidences of
indebtedness. Stated interest on the Regular Interest Securities will be taxable
as ordinary income and taken into account using the accrual method of
accounting, regardless of the Holder's normal accounting method. Interest (other
than original issue discount) on securities (other than Regular Interest
Securities) that are characterized as indebtedness for federal income tax
purposes will be includible in income by holders thereof in accordance with
their usual methods of accounting. Securities characterized as debt for federal
income tax purposes and Regular Interest Securities will be referred to
hereinafter collectively as "Debt securities."

     Debt securities that are Compound Interest securities will, and certain of
the other Debt securities may, be issued with "original issue discount" ("OID").
The following discussion is based in part on the rules governing OID which are
set forth in Sections 1271 through 1275 of the Code and the Treasury regulations
issued thereunder (the "OID Regulations"). A Holder should be aware, however,
that the OID Regulations do not adequately address certain issues relevant to
prepayable securities, such as the Debt securities.

     In general, OID, if any, will equal the difference between the stated
redemption price at maturity of a Debt security and its issue price. A holder of
a Debt security must include OID in gross income as ordinary interest income as
it accrues under a method taking into account an economic accrual of the
discount. In general, OID must be included in income in advance of the receipt
of the cash representing that income. The amount of OID on a Debt security will
be considered to be zero, however if the interest is less than a de minimis
amount as determined under the Code.

     The issue price of a Debt security is the first price at which a
substantial amount of Debt securities of that class are sold to the public
(excluding bond houses, brokers, underwriters or wholesalers). If less than a
substantial amount of a particular class of Debt securities is sold for cash on
or prior to the related closing date, the issue price for the class will be
treated as the fair market value of the class on the closing date. The issue
price of a Debt security also includes the amount paid by an initial Debt
security holder for accrued interest that relates to a period prior to the issue
date of the Debt security. The stated redemption price at maturity of a Debt
security includes the original principal amount of the Debt security, but
generally will not include distributions of interest if the distributions
constitute "qualified stated interest."

     Under the OID Regulations, qualified stated interest generally means
interest payable at a single fixed rate or qualified variable rate (as described
below) provided that the interest payments are unconditionally payable at
intervals of one year or less during the entire term of the Debt security. The
OID Regulations state that interest


                                       80



payments are unconditionally payable only if a late payment or nonpayment is
expected to be penalized or reasonable remedies exist to compel payment. Certain
Debt securities may provide for default remedies in the event of late payment or
nonpayment of interest. The interest on those Debt securities will be
unconditionally payable and constitute qualified stated interest, not OID.
However, absent clarification of the OID Regulations, where Debt securities do
not provide for default remedies, the interest payments will be included in the
Debt security's stated redemption price at maturity and taxed as OID. Interest
is payable at a single fixed rate only if the rate appropriately takes into
account the length of the interval between payments. Distributions of interest
on Debt securities with respect to which deferred interest will accrue, will not
constitute qualified stated interest payments, in which case the stated
redemption price at maturity of those Debt securities includes all distributions
of interest as well as principal thereon. If the interval between the issue date
and the first distribution date on a Debt security is longer than the interval
between subsequent distribution dates, but the amount of the distribution is not
adjusted to reflect the longer interval, then for purposes of determining
whether the Debt security has de minimis OID, the stated redemption price of the
Debt security is treated as the issue price (determined as described above) plus
the greater of (i) the amount of the distribution foregone or (ii) the excess
(if any) of the Debt security's stated principal over its issue price. If the
interval between the issue date and the first distribution date on a Debt
security is shorter than the interval between subsequent distribution dates, but
the amount of the distribution is not adjusted to reflect the shorter interval,
then for the purposes of determining the OID, if any, on the Debt security, the
excess amount of the distribution would be added to the Debt security's stated
redemption price.

     Under the de minimis rule, OID on a Debt security will be considered to be
zero if the OID is less than 0.25% of the stated redemption price at maturity of
the Debt security multiplied by the weighted average maturity of the Debt
security. The weighted average maturity of a Debt security is the sum of the
weighted maturity of each payment of the Debt security's stated redemption
price. The weighted maturity of each stated redemption price payment is (i) the
number of complete years from the issue date until the payment is made,
multiplied by (ii) a fraction, the numerator of which is the amount of the
payment and the denominator of which is the Debt security's total stated
redemption price.

     Although currently unclear, it appears that the projected payments of
stated redemption price should be based on a schedule that is determined in
accordance with the Prepayment Assumption. The Prepayment Assumption with
respect to a series of Regular Certificates will be set forth in the related
prospectus supplement. Holders generally must report de minimis OID pro rata as
principal payments are received, and that income will be capital gain if the
Debt security is held as a capital asset. However, holders may elect to accrue
all de minimis OID as well as market discount under a constant interest method.

     Debt securities may provide for interest based on a qualified variable
rate. Under the OID Regulations, interest is treated as payable at a qualified
variable rate and not as contingent interest if, generally,

o    the interest is unconditionally payable at least annually,

o    the issue price of the debt instrument does not exceed the total
     noncontingent principal payments and

o    interest is based on a "qualified floating rate," an "objective rate," or a
     combination of "qualified floating rates" that do not operate in a manner
     that significantly accelerates or defers interest payments on the Debt
     security.

     In the case of Compound Interest securities, certain Interest Weighted
Securities (as defined herein), and certain of the other Debt securities, none
of the payments under the instrument will be considered qualified stated
interest, and thus the aggregate amount of all payments will be included in the
stated redemption price.

     The Internal Revenue Service (the "IRS") issued final regulations in June
1996 (the "Contingent Regulations") governing the calculation of OID on
instruments having contingent interest payments. The Contingent Regulations
specifically do not apply for purposes of calculating OID on debt instruments
subject to Code Section 1272(a)(6), such as the Debt securities. Additionally,
the OID Regulations do not contain provisions specifically interpreting Code
Section 1272(a)(6). Until the Treasury issues guidance to the contrary, the
trustee intends to base its computation on Code Section 1272(a)(6) and the OID
Regulations as described in this prospectus.


                                       81



However, because no regulatory guidance currently exists under Code Section
1272(a)(6), we can give no assurance that the methodology represents the correct
manner of calculating OID.

     The holder of a Debt security issued with OID must include in gross income,
for all days during its taxable year on which it holds the Debt security, the
sum of the "daily portions" of the original issue discount. The amount of OID
includible in income by a holder will be computed by allocating to each day
during a taxable year a pro rata portion of the original issue discount that
accrued during the relevant accrual period. In the case of a Debt security that
is not a Regular Interest Security and the principal payments on which are not
subject to acceleration resulting from prepayments on the loans, the amount of
OID includible in income of a Holder for an accrual period (generally the period
over which interest accrues on the debt instrument) will equal the product of
the yield to maturity of the Debt security and the adjusted issue price of the
Debt security, reduced by any payments of qualified stated interest. The
adjusted issue price of a Debt security is the sum of its issue price plus prior
accruals of OID, reduced by the total payments other than qualified stated
interest payments made with respect to the Debt security in all prior periods.

     The amount of OID to be included in income by a holder of a debt
instrument, such as certain Classes of the Debt securities, that is subject to
acceleration due to prepayments on other debt obligations securing the
instruments (a "Pay-Through Security"), is computed by taking into account the
anticipated rate of prepayments assumed in pricing the debt instrument (the
"Prepayment Assumption"). The amount of OID that will accrue during an accrual
period on a Pay-Through Security is the excess (if any) of (i) the sum of (a)
the present value of all payments remaining to be made on the Pay-Through
Security as of the close of the accrual period and (b) the payments during the
accrual period of amounts included in the stated redemption price of the
Pay-Through Security, over (ii) the adjusted issue price of the Pay-Through
Security at the beginning of the accrual period. The present value of the
remaining payments is to be determined on the basis of three factors: (i) the
original yield to maturity of the Pay-Through Security (determined on the basis
of compounding at the end of each accrual period and properly adjusted for the
length of the accrual period), (ii) events which have occurred before the end of
the accrual period and (iii) the assumption that the remaining payments will be
made in accordance with the original Prepayment Assumption. The effect of this
method is to increase the portions of OID required to be included in income by a
Holder to take into account prepayments with respect to the loans at a rate that
exceeds the Prepayment Assumption, and to decrease (but not below zero for any
period) the portions of original issue discount required to be included in
income by a Holder of a Pay-Through Security to take into account prepayments
with respect to the loans at a rate that is slower than the Prepayment
Assumption. Although original issue discount will be reported to Holders of
Pay-Through Securities based on the Prepayment Assumption, no representation is
made to Holders that loans will be prepaid at that rate or at any other rate.

     The depositor may adjust the accrual of OID on a Class of Regular Interest
Securities (or other regular interests in a REMIC) in a manner that it believes
to be appropriate, to take account of realized losses on the loans, although the
OID Regulations do not provide for those adjustments. If the IRS were to require
that OID be accrued without the adjustments, the rate of accrual of OID for a
Class of Regular Interest Securities could increase.

     Certain classes of Regular Interest Securities may represent more than one
class of REMIC regular interests. Unless otherwise provided in the related
prospectus supplement, the trustee intends, based on the OID Regulations, to
calculate OID on those securities as if, solely for the purposes of computing
OID, the separate regular interests were a single debt instrument.

     A subsequent holder of a Debt security will also be required to include OID
in gross income, but such a holder who purchases the Debt security for an amount
that exceeds its adjusted issue price will be entitled (as will an initial
holder who pays more than a Debt security's issue price) to offset the OID by
comparable economic accruals of portions of the excess.

     Effects of Defaults and Delinquencies. Holders will be required to report
income with respect to the related securities under an accrual method without
giving effect to delays and reductions in distributions attributable to a
default or delinquency on the loans, except possibly to the extent that it can
be established that the amounts are uncollectible. As a result, the amount of
income (including OID) reported by a holder of such a security in any period
could significantly exceed the amount of cash distributed to the holder in that
period. The holder will eventually be allowed a loss (or will be allowed to
report a lesser amount of income) to the extent that the aggregate


                                       82



amount of distributions on the securities is reduced as a result of a loan
default. However, the timing and character of the losses or reductions in income
are uncertain and, accordingly, holders of securities are encouraged to consult
their tax advisors on this point.

     Interest Weighted Securities. It is not clear how income should be accrued
with respect to Regular Interest Securities or Stripped Securities (as defined
under "-- Tax Status as a Grantor Trust; General" herein) the payments on which
consist solely or primarily of a specified portion of the interest payments on
qualified mortgages held by the REMIC or on loans underlying Pass-Through
Securities ("Interest Weighted Securities"). The Issuer intends to take the
position that all of the income derived from an Interest Weighted Security
should be treated as OID and that the amount and rate of accrual of the OID
should be calculated by treating the Interest Weighted Security as a Compound
Interest security. However, in the case of Interest Weighted Securities that are
entitled to some payments of principal and that are Regular Interest Securities
the IRS could assert that income derived from an Interest Weighted Security
should be calculated as if the security were a security purchased at a premium
equal to the excess of the price paid by the holder for the security over its
stated principal amount, if any. Under this approach, a holder would be entitled
to amortize the premium only if it has in effect an election under Section 171
of the Code with respect to all taxable debt instruments held by the holder, as
described below. Alternatively, the IRS could assert that an Interest Weighted
Security should be taxable under the rules governing bonds issued with
contingent payments. That treatment may be more likely in the case of Interest
Weighted Securities that are Stripped Securities as described below. See "-- Tax
Status as a Grantor Trust -- Discount or Premium on Pass-Through Securities."

     Variable Rate Debt Securities. In the case of Debt securities bearing
interest at a rate that varies directly, or according to a fixed formula, with
an objective index, it appears that (i) the yield to maturity of the Debt
securities and (ii) in the case of Pay-Through Securities, the present value of
all payments remaining to be made on the Debt securities, should be calculated
as if the interest index remained at its value as of the issue date of the
securities. Because the proper method of adjusting accruals of OID on a variable
rate Debt security is uncertain, holders of variable rate Debt securities are
encouraged to consult their tax advisers regarding the appropriate treatment of
the securities for federal income tax purposes.

     Market Discount. A purchaser of a security may be subject to the market
discount rules of Sections 1276 through 1278 of the Code. A Holder that acquires
a Debt security with more than a prescribed de minimis amount of "market
discount" (generally, the excess of the principal amount of the Debt security
over the purchaser's purchase price) will be required to include accrued market
discount in income as ordinary income in each month, but limited to an amount
not exceeding the principal payments on the Debt security received in that month
and, if the securities are sold, the gain realized. That market discount would
accrue in a manner to be provided in Treasury regulations but, until the
regulations are issued, the market discount would in general accrue either (i)
on the basis of a constant yield (in the case of a Pay-Through Security, taking
into account a prepayment assumption) or (ii) (a) in the case of securities (or
in the case of a Pass-Through Security (as defined herein), as set forth below,
the loans underlying the security) not originally issued with original issue
discount, on the basis of the rates of the stated interest payable in the
relevant period to total stated interest remaining to be paid at the beginning
of the period or (b) in the case of securities (or, in the case of a
Pass-Through Security, as described below, the loans underlying the security)
originally issued at a discount, on the basis of the rates of the OID in the
relevant period to total OID remaining to be paid.

     Section 1277 of the Code provides that, regardless of the origination date
of the Debt security (or, in the case of a Pass-Through Security, the underlying
loans), the excess of interest paid or accrued to purchase or carry a security
(or, in the case of a Pass-Through Security, as described below, the underlying
loans) with market discount over interest received on the security is allowed as
a current deduction only to the extent the excess is greater than the market
discount that accrued during the taxable year in which the interest expense was
incurred. In general, the deferred portion of any interest expense will be
deductible when the market discount is included in income, including upon the
sale, disposition, or repayment of the security (or in the case of a
Pass-Through Security, an underlying loan). A holder may elect to include market
discount in income currently as it accrues, on all market discount obligations
acquired by the holder during the taxable year the election is made and
thereafter, in which case the interest deferral rule will not apply.


                                       83



     Premium. A holder who purchases a Debt security (other than an Interest
Weighted Security to the extent described above) at a cost greater than its
stated redemption price at maturity, generally will be considered to have
purchased the security at a premium, which it may elect to amortize as an offset
to interest income on the security (and not as a separate deduction item) on a
constant yield method. Although no regulations addressing the computation of
premium accrual on securities similar to the securities have been issued, the
legislative history of the 1986 Act indicates that premium is to be accrued in
the same manner as market discount. Accordingly, it appears that the accrual of
premium on a Class of Pay-Through Securities will be calculated using the
prepayment assumption used in pricing the Class. If a holder makes an election
to amortize premium on a Debt security, the election will apply to all taxable
debt instruments (including all REMIC regular interests and all pass-through
certificates representing ownership interests in a trust holding debt
obligations) held by the holder at the beginning of the taxable year in which
the election is made, and to all taxable debt instruments acquired thereafter by
the holder, and will be irrevocable without the consent of the IRS. Purchasers
who pay a premium for the securities are encouraged to consult their tax
advisers regarding the election to amortize premium and the method to be
employed.

     The Treasury has issued regulations (the "Final Bond Premium Regulations")
dealing with amortizable bond premium. These regulations specifically do not
apply to prepayable debt instruments subject to Code Section 1272(a)(6) such as
the securities. Absent further guidance from the IRS, the trustee intends to
account for amortizable bond premium in the manner described above. Prospective
purchasers of the securities are encouraged to consult their tax advisors
regarding the possible application of the Final Bond Premium Regulations.

     Election to Treat All Interest as Original Issue Discount. The OID
Regulations permit a holder of a Debt security to elect to accrue all interest,
discount (including de minimis market or original issue discount) and premium in
income as interest, based on a constant yield method for Debt securities
acquired on or after April 4, 1994. If such an election were to be made with
respect to a Debt security with market discount, the holder of the Debt security
would be deemed to have made an election to include in income currently market
discount with respect to all other debt instruments having market discount that
the holder of the Debt security acquires during the year of the election or
thereafter. Similarly, a holder of a Debt security that makes this election for
a Debt security that is acquired at a premium will be deemed to have made an
election to amortize bond premium with respect to all debt instruments having
amortizable bond premium that the holder owns or acquires. The election to
accrue interest, discount and premium on a constant yield method with respect to
a Debt security is irrevocable.

TAXATION OF THE REMIC AND ITS HOLDERS

     General. In the opinion of Tax Counsel, if one or more REMIC elections are
made with respect to a series of securities, then the arrangement by which the
securities of that series are issued will be treated as one or more REMICs as
long as all of the provisions of the applicable Agreement are complied with and
the statutory and regulatory requirements are satisfied. Securities will be
designated as "Regular Interests" or "Residual Interests" in a REMIC, as
specified in the related prospectus supplement.

     Except to the extent specified otherwise in a prospectus supplement, if one
or more REMIC elections are made with respect to a series of securities, (i)
securities held by a domestic building and loan association will constitute "a
regular or a residual interest in a REMIC" within the meaning of Code Section
7701(a)(19)(C)(xi) (assuming that at least 95% of the REMIC's assets consist of
cash, government securities, "loans secured by an interest in real property,"
and other types of assets described in Code Section 7701(a)(19)(C)); and (ii)
securities held by a real estate investment trust will constitute "real estate
assets" within the meaning of Code Section 856(c)(5)(B), and income with respect
to the securities will be considered "interest on obligations secured by
mortgages on real property or on interests in real property" within the meaning
of Code Section 856(c)(3)(B) (assuming, for both purposes, that at least 95% of
the REMIC's assets are qualifying assets). If less than 95% of the REMIC's
assets consist of assets described in (i) or (ii) above, then a security will
qualify for the tax treatment described in (i), (ii) or (iii) in the proportion
that those REMIC assets (and income in the case of (ii)) are qualifying assets
(and income).

REMIC EXPENSES; SINGLE CLASS REMICS

     As a general rule, all of the expenses of a REMIC will be taken into
account by holders of the Residual Interests. In the case of a "single class
REMIC," however, the expenses will be allocated, under Treasury


                                       84



regulations, among the holders of the Regular Interest Securities and the
holders of the Residual Interests (as defined herein) on a daily basis in
proportion to the relative amounts of income accruing to each Holder on that
day. In the case of a holder of a Regular Interest Security who is an individual
or a "pass-through interest holder" (including certain pass-through entities but
not including real estate investment trusts), the expenses will be deductible
only to the extent that the expenses, plus other "miscellaneous itemized
deductions" of the Holder, exceed 2% of the Holder's adjusted gross income. In
addition, the amount of itemized deductions otherwise allowable for the taxable
year for an individual whose adjusted gross income exceeds the applicable amount
(which amount will be adjusted for inflation) will be reduced by the lesser of

o    3% of the excess of adjusted gross income over the applicable amount, or

o    80% of the amount of itemized deductions otherwise allowable for the
     taxable year.

     These percentages are scheduled to be reduced starting in 2006 and return
to current levels in 2010. The reduction or disallowance of this deduction may
have a significant impact on the yield of the Regular Interest Security to such
a Holder. In general terms, a single class REMIC is one that either

o    would qualify, under existing Treasury regulations, as a grantor trust if
     it were not a REMIC (treating all interests as ownership interests, even if
     they would be classified as debt for federal income tax purposes) or

o    is similar to such a trust and which is structured with the principal
     purpose of avoiding the single class REMIC rules.

The applicable prospectus supplement may provide for the allocation of REMIC
expenses, but if it does not, the expenses of the REMIC will be allocated to
holders of the related Residual Interests.

TAXATION OF THE REMIC

     General. Although a REMIC is a separate entity for federal income tax
purposes, a REMIC is not generally subject to entity-level tax. Rather, the
taxable income or net loss of a REMIC is taken into account by the holders of
Residual Interests. As described above, the regular interests are generally
taxable as debt of the REMIC.

     Calculation of REMIC Income. The taxable income or net loss of a REMIC is
determined under an accrual method of accounting and in the same manner as in
the case of an individual, with certain adjustments. In general, the taxable
income or net loss will be the difference between

o    the gross income produced by the REMIC's assets, including stated interest
     and any original issue discount or market discount on loans and other
     assets, and

o    deductions, including stated interest and original issue discount accrued
     on Regular Interest Securities, amortization of any premium with respect to
     loans, and servicing fees and other expenses of the REMIC.

A holder of a Residual Interest that is an individual or a "pass-through
interest holder" (including certain pass-through entities, but not including
real estate investment trusts) will be unable to deduct servicing fees payable
on the loans or other administrative expenses of the REMIC for a given taxable
year, to the extent that the expenses, when aggregated with the holder's other
miscellaneous itemized deductions for that year, do not exceed two percent of
the holder's adjusted gross income.

     For purposes of computing its taxable income or net loss, the REMIC should
have an initial aggregate tax basis in its assets equal to the aggregate fair
market value of the regular interests and the Residual Interests on the Startup
Day (generally, the day that the interests are issued). That aggregate basis
will be allocated among the assets of the REMIC in proportion to their
respective fair market values.


                                       85



     Subject to possible application of the de minimis rules, the method of
accrual by the REMIC of OID income on mortgage loans will be equivalent to the
method under which holders of Pay-Through Securities accrue original issue
discount (that is, under the constant yield method taking into account the
Prepayment Assumption). The REMIC will deduct OID on the Regular Interest
Securities in the same manner that the holders of the Regular Interest
Securities include the discount in income, but without regard to the de minimis
rules. See "Taxation of Debt Securities" above. However, a REMIC that acquires
loans at a market discount must include that market discount in income
currently, as it accrues, on a constant yield basis.

     To the extent that the REMIC's basis allocable to loans that it holds
exceeds their principal amounts, the resulting premium will be amortized over
the life of the loans (taking into account the Prepayment Assumption) on a
constant yield method. Although the law is somewhat unclear regarding recovery
of premium attributable to loans originated on or before that date, it is
possible that the premium may be recovered in proportion to payments of loan
principal.

     Prohibited Transactions and Contributions Tax. The REMIC will be subject to
a 100% tax on any net income derived from a "prohibited transaction." For this
purpose, net income will be calculated without taking into account any losses
from prohibited transactions or any deductions attributable to any prohibited
transaction that resulted in a loss. In general, prohibited transactions
include:

o    subject to limited exceptions, the sale or other disposition of any
     qualified mortgage transferred to the REMIC;

o    subject to a limited exception, the sale or other disposition of a cash
     flow investment;

o    the receipt of any income from assets not permitted to be held by the REMIC
     pursuant to the Code; or

o    the receipt of any fees or other compensation for services rendered by the
     REMIC.

It is anticipated that a REMIC will not engage in any prohibited transactions in
which it would recognize a material amount of net income. In addition, subject
to a number of exceptions, a tax is imposed at the rate of 100% on amounts
contributed to a REMIC after the close of the three-month period beginning on
the Startup Day. The holders of Residual Interests will generally be responsible
for the payment of any such taxes imposed on the REMIC. To the extent not paid
by the holders or otherwise, however, the taxes will be paid out of the trust
fund and will be allocated pro rata to all outstanding classes of securities of
the REMIC.

TAXATION OF HOLDERS OF RESIDUAL INTERESTS

     The holder of a security representing a residual interest (a "Residual
Interest") will take into account the "daily portion" of the taxable income or
net loss of the REMIC for each day during the taxable year on which the holder
held the Residual Interest. The daily portion is determined by allocating to
each day in any calendar quarter its ratable portion of the taxable income or
net loss of the REMIC for the quarter, and by allocating that amount among the
holders (on that day) of the Residual Interests in proportion to their
respective holdings on that day.

     The holder of a Residual Interest must report its proportionate share of
the taxable income of the REMIC whether or not it receives cash distributions
from the REMIC attributable to the income or loss. The reporting of taxable
income without corresponding distributions could occur, for example, in certain
REMIC issues in which the loans held by the REMIC were issued or acquired at a
discount, since mortgage prepayments cause recognition of discount income, while
the corresponding portion of the prepayment could be used in whole or in part to
make principal payments on REMIC Regular Interests issued without any discount
or at an insubstantial discount (if this occurs, it is likely that cash
distributions will exceed taxable income in later years). Taxable income may
also be greater in earlier years of certain REMIC issues as a result of the fact
that interest expense deductions, as a percentage of outstanding principal on
REMIC Regular Interest Securities, will typically increase over time as lower
yielding securities are paid, whereas interest income with respect to loans will
generally remain constant over time as a percentage of loan principal.


                                       86



     In any event, because the holder of a Residual Interest is taxed on the net
income of the REMIC, the taxable income derived from a Residual Interest in a
given taxable year will not be equal to the taxable income associated with
investment in a corporate bond or stripped instrument having similar cash flow
characteristics and pretax yield. Therefore, the after-tax yield on the Residual
Interest may be less than that of such a bond or instrument.

     Limitation on Losses. The amount of the REMIC's net loss that a holder may
take into account currently is limited to the holder's adjusted basis in the
Residual Interest at the end of the calendar quarter in which the loss arises. A
holder's basis in a Residual Interest will initially equal the holder's purchase
price, and will subsequently be increased by the amount of the REMIC's taxable
income allocated to the holder, and decreased (but not below zero) by the amount
of distributions made and the amount of the REMIC's net loss allocated to the
holder. Any disallowed loss may be carried forward indefinitely, but may be used
only to offset income of the REMIC generated by the same REMIC. The ability of
holders of Residual Interests to deduct net losses may be subject to additional
limitations under the Code, as to which the holders are encouraged to consult
their tax advisers.

     Distributions. Distributions on a Residual Interest (whether at their
scheduled times or as a result of prepayments) will generally not result in any
additional taxable income or loss to a holder of a Residual Interest. If the
amount of the payment exceeds a holder's adjusted basis in the Residual
Interest, however, the holder will recognize gain (treated as gain from the sale
of the Residual Interest) to the extent of the excess.

     Sale or Exchange. A holder of a Residual Interest will recognize gain or
loss on the sale or exchange of a Residual Interest equal to the difference, if
any, between the amount realized and the holder's adjusted basis in the Residual
Interest at the time of the sale or exchange. Any loss from the sale of a
Residual Interest will be subject to the "wash sale" rules of Code Section 1091
if, during the period beginning six months before and ending six months after
the sale of the Residual Interest, the seller reacquires the Residual Interest,
or acquires (i) a Residual Interest in any other REMIC, (ii) a similar interest
in a "taxable mortgage pool" (as defined in Code Section 7701(i)) or (iii) an
ownership interest in a FASIT (as defined in Code Section 860L). In general,
under the wash sale rules, loss from the Residual Interest will be disallowed
and the Residual Interest Holder's basis in the replacement interest will be the
basis in the Residual Interest that was sold, decreased or increased, as the
case may be, by the difference between the selling price of the Residual
Interest and the purchase price of the replacement interest.

     Excess Inclusions. The portion of the REMIC taxable income of a holder of a
Residual Interest consisting of "excess inclusion" income may not be offset by
other deductions or losses, including net operating losses, on the holder's
federal income tax return. Further, if the holder of a Residual Interest is an
organization subject to the tax on unrelated business income imposed by Code
Section 511, the holder's excess inclusion income will be treated as unrelated
business taxable income of the holder. In addition, under Treasury regulations
yet to be issued, if a real estate investment trust, a regulated investment
company, a common trust fund, or certain cooperatives were to own a Residual
Interest, a portion of dividends (or other distributions) paid by the real
estate investment trust (or other entity) would be treated as excess inclusion
income. If a Residual Interest is owned by a foreign person, excess inclusion
income is subject to tax at a rate of 30%, which may not be reduced by treaty,
is not eligible for treatment as "portfolio interest" and is subject to certain
additional limitations. See "Tax Treatment of Foreign Investors."

     Three special rules apply for determining the effect of excess inclusions
on the alternative minimum taxable income of a residual holder. First,
alternative minimum taxable income for the residual holder is determined without
regard to the rule that taxable income cannot be less than excess inclusions.
Second, a residual holder's alternative minimum taxable income for a tax year
cannot be less than excess inclusions for the year. Third, the amount of any
alternative minimum tax net operating loss deductions must be computed without
regard to any excess inclusions.

     In the case of a Residual Interest that has no significant value, the
excess inclusion portion of a REMIC's income is generally equal to all of the
REMIC taxable income allocable to the residual holder. In other cases, the
excess inclusion portion of a REMIC's income is generally equal to the excess,
if any, of REMIC taxable income for the quarterly period allocable to a Residual
Interest, over the daily accruals for the quarterly period of (i) 120% of the
long term applicable federal rate on the Startup Day multiplied by (ii) the
adjusted issue price of the Residual Interest at the beginning of the quarterly
period. The adjusted issue price of a Residual Interest at the beginning of each
calendar quarter will equal its issue price (calculated in a manner analogous to
the determination of the issue


                                       87



price of a Regular Interest), increased by the aggregate of the daily accruals
for prior calendar quarters, and decreased (but not below zero) by the amount of
loss allocated to a holder and the amount of distributions made on the Residual
Interest before the beginning of the quarter. The long-term federal rate, which
is announced monthly by the Treasury Department, is an interest rate that is
based on the average market yield of outstanding marketable obligations of the
United States government having remaining maturities in excess of nine years.

     Under the REMIC Regulations, in certain circumstances, transfers of
Residual Interests may be disregarded. See "-- Restrictions on Ownership and
Transfer of Residual Interests" and "-- Tax Treatment of Foreign Investors"
below.

     Restrictions on Ownership and Transfer of Residual Interests. As a
condition to qualification as a REMIC, reasonable arrangements must be made to
prevent the ownership of a Residual Interest by any "Disqualified Organization."
Disqualified Organizations include the United States, any State or political
subdivision thereof, any foreign government, any international organization, or
any agency or instrumentality of any of the foregoing, a rural electric or
telephone cooperative described in Section 1381(a)(2)(C) of the Code, or any
entity exempt from the tax imposed by Sections 1 through 1399 of the Code, if
the entity is not subject to tax on its unrelated business income. Accordingly,
the applicable Pooling and Servicing Agreement will prohibit Disqualified
Organizations from owning a Residual Interest. In addition, no transfer of a
Residual Interest will be permitted unless the proposed transferee shall have
furnished to the trustee an affidavit representing and warranting that it is
neither a Disqualified Organization nor an agent or nominee acting on behalf of
a Disqualified Organization.

     If a Residual Interest is transferred to a Disqualified Organization in
violation of the restrictions set forth above, a substantial tax can be imposed
on the transferor of the Residual Interest at the time of the transfer. In
addition, if a Disqualified Organization holds an interest in a pass-through
entity (including, among others, a partnership, trust, real estate investment
trust, regulated investment company, or any person holding as nominee), that
owns a Residual Interest, the pass-through entity will be required to pay an
annual tax on the Disqualified Organization's pass-through share of the excess
inclusion income of the REMIC. If an "electing large partnership" holds a
Residual Interest, all interests in the electing large partnership are treated
as held by disqualified organizations for purposes of the tax imposed upon a
pass-through entity under section 860E(e) of the Code. An exception to this tax,
otherwise available to a pass-through entity that is furnished certain
affidavits by record holders of interests in the entity and that does not know
the affidavits are false, is not available to an electing large partnership.

     Noneconomic Residual Interests. The REMIC Regulations disregard, for
federal income tax purposes, any transfer of a Noneconomic Residual Interest to
a "U.S. Transferee" unless no significant purpose of the transfer is to enable
the transferor to impede the assessment or collection of tax. For this purpose,
a U.S. Transferee means a U.S. Person as defined under "Certain Federal Income
Tax Consequences -- Non-REMIC Certificates -- Non-U.S. Persons." A U.S.
Transferee also includes foreign entities and individuals (Non-U.S. Persons) but
only if their income from the Residual Interest is subject to tax under Code
Section 871(b) or Code Section 882 (income effectively connected with a U.S.
trade or business). If the transfer of a Noneconomic Residual Interest is
disregarded, the transferor continues to be treated as the owner of the Residual
Interest and continues to be subject to tax on its allocable portion of the net
income of the REMIC.

     A Residual Interest (including a Residual Interest with a positive value at
issuance) is a "Noneconomic Residual Interest" at the time of transfer unless,
(i) taking into account the Prepayment Assumption and any required or permitted
clean up calls or required liquidation provided for in the REMIC's
organizational documents, the present value of the expected future distributions
on the Residual Interest at least equals the product of (A) the present value of
the anticipated excess inclusions and (B) 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. A transfer of a
Noneconomic Residual Interest has a "significant purpose to impede the
assessment or collection of tax" if, at the time of transfer, the transferor
either knew or should have known (had "Improper Knowledge") that the transferee
would be unwilling or unable to pay taxes due on its share of the taxable income
of the REMIC.


                                       88



     The REMIC Regulations also provide a safe harbor under which the transferor
of a Noneconomic Residual Interest is presumed not to have Improper Knowledge at
the time of transfer if the following conditions are met: (i) the transferor
conducts a reasonable investigation of the financial condition of the
transferee, finds that the transferee has historically paid its debts as they
came due, and finds no significant evidence to indicate that the transferee will
not continue to pay its debts as they come due; (ii) the transferee represents
that it understands that as a result of holding the Noneconomic Residual
Interest, it may incur tax liabilities in excess of any cash flows generated by
the Noneconomic Residual Interest and intends to pay taxes associated with
holding the Noneconomic Residual Interest as they become due; (iii) the
transferee represents that it will not cause income from the Noneconomic
Residual Interest to be attributable to a foreign permanent establishment or
fixed base (within the meaning of an applicable income tax treaty) ("Offshore
Location") of the transferee or another U.S. taxpayer; (iv) the transferee is
not located in an Offshore Location; and (v) the transferee meets either the
Formula Test or the Asset Test.

     A transfer of a Noneconomic Residual Interest meets the Formula Test if the
present value of the anticipated tax liabilities associated with holding the
Residual Interest does not exceed the sum of, (i) the present value of any
consideration given to the transferee to acquire the interest; (ii) the present
value of the expected future distributions on the interest; and (iii) the
present value of the anticipated tax savings associated with holding the
interest as the REMIC generates losses. For purposes of the Formula Test the
transferee is assumed to pay tax at a rate equal to the highest corporate rate
of tax specified in Code Section 11(b)(1). If, however, the transferee has been
subject to the alternative minimum tax ("AMT") under Code Section 55 in the
preceding two years and will compute its taxable income in the current taxable
year using the AMT rate, then the transferee can assume that it pays tax at the
AMT rate specified in Code Section 55(b)(1)(B). Present values are computed
using a discount rate equal to the Federal short-term rate prescribed by Code
Section 1274(d) for the month of the transfer and the compounding period used by
the transferee.

     The Asset Test only applies in cases where the transferee is an Eligible
Corporation. To be an Eligible Corporation, the transferee must be a taxable
domestic C corporation other than a regulated investment company, a real estate
investment trust, a REMIC or a cooperative. In addition, regardless of who the
transferee may be, the transfer of a Residual Interest to an Offshore Location
does not qualify as a transfer to an Eligible Corporation even if the Offshore
Location is only a branch of an Eligible Corporation and not a separate legal
entity. A transfer of a Noneconomic Residual Interest meets the Asset Test if at
the time of the transfer, and at the close of each of the transferee's two
fiscal years preceding the year of transfer, the transferee's gross assets for
financial reporting purposes exceed $100 million and its net assets for
financial reporting purposes exceed $10 million. The gross assets and net assets
of a transferee do not include any obligation of any person related to the
transferee (such as a shareholder, partner, affiliate or sister corporation) or
any asset acquired for a principal purpose of satisfying the Asset Test. In
addition, the transferee must make a written agreement that any subsequent
transfer of the interest will be to another Eligible Corporation in a
transaction that satisfies the Asset Test. A transfer fails to meet this
requirement if the transferor knows, or has reason to know, that the transferee
will not honor the restrictions on subsequent transfers. Finally, 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 the Residual Interest
will not be paid. The consideration given to the transferee to acquire the
non-economic Residual Interest in the REMIC is only one factor to be considered.
However, if the amount of consideration is so low that under any set of
reasonable assumptions a reasonable person would conclude that the taxes
associated with holding the Residual Interest will not be paid, then the
transferor is deemed to know that the transferee cannot or will not pay. In
determining whether the amount is too low, the specific terms of the Formula
Test need not be used.

     Treatment of Inducement Fees. The Treasury Department has issued final
regulations, effective May 11, 2004, which address the federal income tax
treatment of "inducement fees" received by transferees of Noneconomic Residual
Interests. The final regulations require inducement fees to be included in
income over a period reasonably related to the period in which the related
Residual Interest is expected to generate taxable income or net loss allocable
to the holder. The final regulations provide two safe harbor methods, which
permit transferees to include inducement fees in income either (i) in the same
amounts and over the same periods that the taxpayer uses for financial reporting
purposes, provided that the period is not shorter than the period the REMIC is
expected to generate taxable income or (ii) ratably over the remaining
anticipated weighted average life of all the Regular and Residual Interests
issued by the REMIC, determined based on actual distributions projected as
remaining to be made on the interests under the prepayment assumption. If the
holder of a Residual Interest sells or otherwise disposes of the Residual
Interest, any unrecognized portion of the inducement fee must be taken into
account at the time of the


                                       89



sale or disposition. The final regulations also provide that an inducement fee
shall be treated as income from sources within the United States. In addition,
the IRS has issued administrative guidance addressing the procedures by which
transferees of Noneconomic Residual Interests may obtain automatic consent from
the IRS to change the method of accounting for REMIC inducement fee income to
one of the safe harbor methods provided in these final regulations (including a
change from one safe harbor method to the other safe harbor method). Prospective
purchasers of the Residual Interests are encouraged to consult with their tax
advisors regarding the effect of these final regulations and the related
guidance regarding the procedures for obtaining automatic consent to change the
method of accounting.

     Mark to Market Rules. Prospective purchasers of a Residual Interest should
be aware that a Residual Interest acquired after January 3, 1995 cannot be
marked-to-market.

ADMINISTRATIVE MATTERS

     A REMIC's books must be maintained on a calendar year basis and a REMIC
must file an annual federal income tax return. Ordinarily, a REMIC will also be
subject to the procedural and administrative rules of the Code applicable to
partnerships, including the determination of any adjustments to, among other
things, items of REMIC income, gain, loss, deduction, or credit, by the IRS in a
unified administrative proceeding.

TAX STATUS AS A GRANTOR TRUST

     General. As specified in the related prospectus supplement if REMIC or
partnership elections are not made, in the opinion of Tax Counsel, the trust
fund relating to a series of securities will be classified for federal income
tax purposes as a grantor trust under Subpart E, Part I of Subchapter J of the
Code and not as a corporation (the securities of that series, "Pass-Through
Securities"). In some series there will be no separation of the principal and
interest payments on the loans. In those circumstances, a Holder will be
considered to have purchased a pro rata undivided interest in each of the loans.
In other cases ("Stripped Securities"), sale of the securities will produce a
separation in the ownership of all or a portion of the principal payments from
all or a portion of the interest payments on the loans.

     Each Holder must report on its federal income tax return its share of the
gross income derived from the loans (not reduced by the amount payable as fees
to the trustee and the servicer and similar fees (collectively, the "Servicing
Fee")), at the same time and in the same manner as those items would have been
reported under the Holder's tax accounting method had it held its interest in
the loans directly, received directly its share of the amounts received with
respect to the loans, and paid directly its share of the Servicing Fees. In the
case of Pass-Through Securities other than Stripped Securities, that income will
consist of a pro rata share of all of the income derived from all of the loans
and, in the case of Stripped Securities, that income will consist of a pro rata
share of the income derived from each stripped bond or stripped coupon in which
the Holder owns an interest. The holder of a security will generally be entitled
to deduct the Servicing Fees under Section 162 or Section 212 of the Code to the
extent that the Servicing Fees represent "reasonable" compensation for the
services rendered by the trustee and the servicer (or third parties that are
compensated for the performance of services). In the case of a noncorporate
holder, however, Servicing Fees (to the extent not otherwise disallowed, e.g.,
because they exceed reasonable compensation) will be deductible in computing the
holder's regular tax liability only to the extent that the fees, when added to
other miscellaneous itemized deductions, exceed 2% of adjusted gross income and
may not be deductible to any extent in computing the holder's alternative
minimum tax liability. In addition, the amount of itemized deductions otherwise
allowable for the taxable year for an individual whose adjusted gross income
exceeds the applicable amount (which amount will be adjusted for inflation) will
be reduced by the lesser of (i) 3% of the excess of adjusted gross income over
the applicable amount or (ii) 80% of the amount of itemized deductions otherwise
allowable for the taxable year. (These percentages are scheduled to be reduced
in 2006 and return to current levels in 2010).

     Discount or Premium on Pass-Through Securities. The holder's purchase price
of a Pass-Through Security is to be allocated among the underlying loans in
proportion to their fair market values, determined as of the time of purchase of
the securities. In the typical case, the trustee (to the extent necessary to
fulfill its reporting obligations) will treat each loan as having a fair market
value proportional to the share of the aggregate principal balances of all of
the loans that it represents, since the securities, generally, will have a
relatively uniform interest rate and other


                                       90



common characteristics. To the extent that the portion of the purchase price of
a Pass-Through Security allocated to a loan (other than to a right to receive
any accrued interest thereon and any undistributed principal payments) is less
than or greater than the portion of the principal balance of the loan allocable
to the security, the interest in the loan allocable to the Pass-Through Security
will be deemed to have been acquired at a discount or premium, respectively.

     The treatment of any discount will depend on whether the discount
represents OID or market discount. In the case of a loan with OID in excess of a
prescribed de minimis amount or a Stripped Security, a holder of a security will
be required to report as interest income in each taxable year its share of the
amount of OID that accrues during that year in the manner described above. OID
with respect to a loan could arise, for example, by virtue of the financing of
points by the originator of the loan, or by virtue of the charging of points by
the originator of the loan in an amount greater than a statutory de minimis
exception. Any market discount or premium on a loan will be includible in
income, generally in the manner described above, except that in the case of
Pass-Through Securities, market discount is calculated with respect to the loans
underlying the security, rather than with respect to the security. A Holder that
acquires an interest in a loan with more than a de minimis amount of market
discount (generally, the excess of the principal amount of the loan over the
purchaser's allocable purchase price) will be required to include accrued market
discount in income in the manner set forth above. See "-- Taxation of Debt
Securities; Market Discount" and "-- Premium" above.

     The holder generally will be required to allocate the portion of market
discount that is allocable to a loan among the principal payments on the loan
and to include the discount allocable to each principal payment in ordinary
income at the time the principal payment is made. That treatment would generally
result in discount being included in income at a slower rate than discount would
be required to be included in income using the method described in the preceding
paragraph.

     Stripped Securities. A Stripped Security may represent a right to receive
only a portion of the interest payments on the loans, a right to receive only
principal payments on the loans, or a right to receive certain payments of both
interest and principal. Certain Stripped Securities ("Ratio Strip Securities")
may represent a right to receive differing percentages of both the interest and
principal on each loan. Pursuant to Section 1286 of the Code, the separation of
ownership of the right to receive some or all of the interest payments on an
obligation from ownership of the right to receive some or all of the principal
payments results in the creation of "stripped bonds" with respect to principal
payments and "stripped coupons" with respect to interest payments. Section 1286
of the Code applies the OID rules to stripped bonds and stripped coupons. For
purposes of computing original issue discount, a stripped bond or a stripped
coupon is treated as a debt instrument issued on the date that the stripped
interest is purchased with an issue price equal to its purchase price or, if
more than one stripped interest is purchased, the ratable share of the purchase
price allocable to the stripped interest.

     Servicing fees in excess of reasonable servicing fees ("excess servicing")
will be treated under the stripped bond rules. If the excess servicing fee is
less than 100 basis points (that is, 1% interest on the loan principal balance)
or the securities are initially sold with a de minimis discount (assuming no
prepayment assumption is required), any non-de minimis discount arising from a
subsequent transfer of the securities should be treated as market discount. The
IRS appears to require that reasonable servicing fees be calculated on a loan by
loan basis, which could result in some loans being treated as having more than
100 basis points of interest stripped off.

     The Code. OID Regulations and judicial decisions provide no direct guidance
on how the interest and original issue discount rules apply to Stripped
Securities and other Pass-Through Securities. Under the method described above
for Pay-Through Securities (the "Cash Flow Bond Method"), a prepayment
assumption is used and periodic recalculations are made which take into account
with respect to each accrual period the effect of prepayments during the period.
However, the 1986 Act does not, absent Treasury regulations, appear specifically
to cover instruments such as the Stripped Securities, which technically
represent ownership interests in the underlying loans, rather than being debt
instruments "secured by" those loans. The Taxpayer Relief Act of 1997 may allow
use of the Cash Flow Bond Method with respect to Stripped Securities and other
Pass-Through Securities because it provides that the method applies to any pool
of debt instruments the yield on which may be affected by prepayments.
Nevertheless, it is believed that the Cash Flow Bond Method is a reasonable
method of reporting income for the securities, and it is expected that OID will
be reported on that basis; provided that the applicable prospectus supplement
may provide for the reporting of OID on an alternative basis. In applying the
calculation to Pass-Through Securities, the trustee will treat all payments to
be received by a holder with respect to the underlying


                                       91



loans as payments on a single installment obligation. The IRS could, however,
assert that original issue discount must be calculated separately for each loan
underlying a security.

     Under certain circumstances, if the loans prepay at a rate faster than the
Prepayment Assumption, the use of the Cash Flow Bond Method may accelerate a
Holder's recognition of income. If, however, the loans prepay at a rate slower
than the Prepayment Assumption, in some circumstances the use of this method may
delay a Holder's recognition of income.

     In the case of a Stripped Security that is an Interest Weighted Security,
the trustee intends, absent contrary authority, to report income to security
holders as OID, in the manner described above for Interest Weighted Securities.

     Possible Alternative Characterizations. The characterizations of the
Stripped Securities described above are not the only possible interpretations of
the applicable Code provisions. Among other possibilities, the IRS could contend
that

o    in certain series, each non-Interest Weighted Security is composed of an
     unstripped undivided ownership interest in loans and an installment
     obligation consisting of stripped principal payments;

o    the non-Interest Weighted Securities are subject to the contingent payment
     provisions of the Contingent Regulations; or

o    each Interest Weighted Stripped Security is composed of an unstripped
     undivided ownership interest in loans and an installment obligation
     consisting of stripped interest payments.

     Given the variety of alternatives for treatment of the Stripped Securities
and the different federal income tax consequences that result from each
alternative, potential purchasers are urged to consult their tax advisers
regarding the proper treatment of the securities for federal income tax
purposes.

     Character as Qualifying Loans. In the case of Stripped Securities, there is
no specific legal authority existing regarding whether the character of the
securities, for federal income tax purposes, will be the same as the loans. The
IRS could take the position that the loans' character is not carried over to the
securities in those circumstances. Pass-Through Securities will be, and,
although the matter is not free from doubt, Stripped Securities should be
considered to represent "real estate assets" within the meaning of Section
856(c)(5)(B) of the Code and "loans secured by an interest in real property"
within the meaning of Section 7701(a)(19)(C)(v) of the Code; and interest income
attributable to the securities should be considered to represent "interest on
obligations secured by mortgages on real property or on interests in real
property" within the meaning of Section 856(c)(3)(B) of the Code. Reserves or
funds underlying the securities may cause a proportionate reduction in the
above-described qualifying status categories of securities.

SALE OR EXCHANGE

     Subject to the discussion below with respect to trust funds for which a
partnership election is made, a Holder's tax basis in its security is the price
the holder pays for the security, plus amounts of original issue or market
discount included in income and reduced by any payments received (other than
qualified stated interest payments) and any amortized premium. Gain or loss
recognized on a sale, exchange, or redemption of a security, measured by the
difference between the amount realized and the security's basis as so adjusted,
will generally be capital gain or loss, assuming that the security is held as a
capital asset. In the case of a security held by a bank, thrift, or similar
institution described in Section 582 of the Code, however, gain or loss realized
on the sale or exchange of a Regular Interest Security will be taxable as
ordinary income or loss. In addition, gain from the disposition of a Regular
Interest Security that might otherwise be capital gain will be treated as
ordinary income to the extent of the excess, if any, of (i) the amount that
would have been includible in the holder's income if the yield on the Regular
Interest Security had equaled 110% of the applicable federal rate as of the
beginning of the holder's holding period, over (ii) the amount of ordinary
income actually recognized by the holder with respect to the Regular Interest
Security.


                                       92



MISCELLANEOUS TAX ASPECTS

     Backup Withholding. Subject to the discussion below with respect to trust
funds for which a partnership election is made, a Holder, other than a holder of
a Residual Interest, may, under certain circumstances, be subject to "backup
withholding" with respect to distributions or the proceeds of a sale of
securities to or through brokers that represent interest or original issue
discount on the securities. This withholding generally applies if the holder of
a security

     o    fails to furnish the trustee with its taxpayer identification number
          ("TIN");

     o    furnishes the trustee an incorrect TIN;

     o    fails to report properly interest, dividends or other "reportable
          payments" as defined in the Code; or

     o    under certain circumstances, fails to provide the trustee or the
          holder's securities broker with a certified statement, signed under
          penalty of perjury, that the TIN provided is its correct number and
          that the holder is not subject to backup withholding.

     Backup withholding will not apply, however, with respect to certain
payments made to Holders, including payments to certain exempt recipients (such
as exempt organizations) and to certain Nonresidents (as defined below). Holders
are encouraged to consult their tax advisers as to their qualification for
exemption from backup withholding and the procedure for obtaining the exemption.

     The trustee will report to the Holders and to the servicer for each
calendar year the amount of any "reportable payments" during the year and the
amount of tax withheld, if any, with respect to payments on the securities.

PROPOSED REPORTING REGULATIONS

     In June 2002 the IRS and Treasury Department proposed new rules concerning
the reporting of tax information with respect to "Widely Held Mortgage Trusts."
If these rules are finalized, the trustee may be compelled, or have an
opportunity, to adopt new ways of calculating and reporting tax items (such as
OID, market discount, sale proceeds and premium) to the Holders of Pass-Through
Securities, which changes may affect the timing of when a Holder reports those
items.

TAX TREATMENT OF FOREIGN INVESTORS

     Subject to the discussion below with respect to trust funds for which a
partnership election is made, under the Code, unless interest (including OID)
paid on a security (other than a Residual Interest) is considered to be
"effectively connected" with a trade or business conducted in the United States
by a nonresident alien individual, foreign partnership or foreign corporation
("Nonresidents"), the interest will normally qualify as portfolio interest
(except where the recipient is a holder, directly or by attribution, of 10% or
more of the capital or profits interest in the issuer, or the recipient is a
controlled foreign corporation to which the issuer is a related person) and will
be exempt from federal income tax. Upon receipt of appropriate ownership
statements, the issuer normally will be relieved of obligations to withhold tax
from the interest payments. These provisions supersede the generally applicable
provisions of United States law that would otherwise require the issuer to
withhold at a 30% rate (unless the rate were reduced or eliminated by an
applicable income tax treaty) on, among other things, interest and other fixed
or determinable, annual or periodic income paid to Nonresidents.

     Interest and OID of Holders who are foreign persons are not subject to
withholding if they are effectively connected with a United States business
conducted by the Holder. They will, however, generally be subject to the regular
United States income tax.


                                       93



     Payments to holders of Residual Interests who are foreign persons will
generally be treated as interest for purposes of the 30% (or lower treaty rate)
United States withholding tax. Holders should assume that the income does not
qualify for exemption from United States withholding tax as "portfolio
interest." It is clear that, to the extent that a payment represents a portion
of REMIC taxable income that constitutes excess inclusion income, a holder of a
Residual Interest will not be entitled to an exemption from or reduction of the
30% (or lower treaty rate) withholding tax rule. If the payments are subject to
United States withholding tax, they generally will be taken into account for
withholding tax purposes only when paid or distributed (or when the Residual
Interest is disposed of). The Treasury has statutory authority, however, to
promulgate regulations which would require the amounts to be taken into account
at an earlier time in order to prevent the avoidance of tax. The regulations
could, for example, require withholding prior to the distribution of cash in the
case of Residual Interests that do not have significant value. Under the REMIC
Regulations, if a Residual Interest has tax avoidance potential, a transfer of a
Residual Interest to a Nonresident will be disregarded for all federal tax
purposes. A Residual Interest has tax avoidance potential unless, at the time of
the transfer the transferor reasonably expects that the REMIC will distribute to
the transferee of the Residual Interest amounts that will equal at least 30% of
each excess inclusion, and that the amounts will be distributed at or after the
time at which the excess inclusions accrue and not later than the calendar year
following the calendar year of accrual. If a Nonresident transfers a Residual
Interest to a United States person, and if the transfer has the effect of
allowing the transferor to avoid tax on accrued excess inclusions, then the
transfer is disregarded and the transferor continues to be treated as the owner
of the Residual Interest for purposes of the withholding tax provisions of the
Code. See "-- Excess Inclusions."

TAX CHARACTERIZATION OF THE TRUST FUND AS A PARTNERSHIP

     Tax Counsel will deliver its opinion that a trust fund for which a
partnership election is made will not be a corporation or publicly traded
partnership taxable as a corporation for federal income tax purposes. This
opinion will be based on the assumption that the terms of the Trust Agreement
and related documents will be complied with, and on counsel's conclusions that
the nature of the income of the trust fund will exempt it from the rule that
certain publicly traded partnerships are taxable as corporations or the issuance
of the securities has been structured as a private placement under an IRS safe
harbor, so that the trust fund will not be characterized as a publicly traded
partnership taxable as a corporation.

     If the trust fund were taxable as a corporation for federal income tax
purposes, the trust fund would be subject to corporate income tax on its taxable
income. The trust fund's taxable income would include all its income, possibly
reduced by its interest expense on the notes. That corporate income tax could
materially reduce cash available to make payments on the notes and distributions
on the certificates, and certificateholders could be liable for that tax that is
unpaid by the trust fund.

TAX CONSEQUENCES TO HOLDERS OF THE NOTES

     Treatment of the Notes as Indebtedness. The trust fund will agree, and the
noteholders will agree by their purchase of notes, to treat the notes as debt
for federal income tax purposes. Unless otherwise specified in the related
prospectus supplement, in the opinion of Tax Counsel, the notes will be
classified as debt for federal income tax purposes. The discussion below assumes
this characterization of the notes is correct.

     OID, Indexed Securities, etc. The discussion below assumes that all
payments on the notes are denominated in U.S. dollars, and that the notes are
not Indexed securities or Strip notes. Moreover, the discussion assumes that the
interest formula for the notes meets the requirements for "qualified stated
interest" under the OID regulations, and that any OID on the notes (that is, any
excess of the principal amount of the notes over their issue price) does not
exceed a de minimis amount (that is, 0.25% of their principal amount multiplied
by the number of full years included in their term), all within the meaning of
the OID regulations. If these conditions are not satisfied with respect to any
given series of notes, additional tax considerations with respect to the notes
will be disclosed in the applicable prospectus supplement.

     Interest Income on the Notes. Based on the above assumptions, except as
discussed in the following paragraph, the notes will not be considered issued
with OID. The stated interest thereon will be taxable to a noteholder as
ordinary interest income when received or accrued in accordance with the
noteholder's method of tax accounting. Under the OID regulations, a holder of a
note issued with a de minimis amount of OID must include the


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OID in income, on a pro rata basis, as principal payments are made on the note.
It is believed that any prepayment premium paid as a result of a mandatory
redemption will be taxable as contingent interest when it becomes fixed and
unconditionally payable. A purchaser who buys a note for more or less than its
principal amount will generally be subject, respectively, to the premium
amortization or market discount rules of the Code.

     A holder of a note that has a fixed maturity date of not more than one year
from the issue date of the note (a "Short-Term Note") may be subject to special
rules. An accrual basis holder of a Short-Term Note (and certain cash method
holders, including regulated investment companies, as set forth in Section 1281
of the Code) generally would be required to report interest income as interest
accrues on a straight-line basis over the term of each interest period. Other
cash basis holders of a Short-Term Note would, in general, be required to report
interest income as interest is paid (or, if earlier, upon the taxable
disposition of the Short-Term Note). However, a cash basis holder of a
Short-Term Note reporting interest income as it is paid may be required to defer
a portion of any interest expense otherwise deductible on indebtedness incurred
to purchase or carry the Short-Term Note until the taxable disposition of the
Short-Term Note. A cash basis taxpayer may elect under Section 1281 of the Code
to accrue interest income on all nongovernment debt obligations with a term of
one year or less, in which case the taxpayer would include interest on the
Short-Term Note in income as it accrues, but would not be subject to the
interest expense deferral rule referred to in the preceding sentence. Certain
special rules apply if a Short-Term Note is purchased for more or less than its
principal amount.

     Sale or Other Disposition. If a noteholder sells a note, the holder will
recognize gain or loss in an amount equal to the difference between the amount
realized on the sale and the holder's adjusted tax basis in the note. The
adjusted tax basis of a note to a particular noteholder will equal the holder's
cost for the note, increased by any market discount, acquisition discount, OID
and gain previously included by the noteholder in income with respect to the
note and decreased by the amount of bond premium (if any) previously amortized
and by the amount of principal payments previously received by the noteholder
with respect to the note. That gain or loss will be capital gain or loss if the
note was held as a capital asset, except for gain representing accrued interest
and accrued market discount not previously included in income. Capital losses
generally may be used only to offset capital gains.

     Foreign Holders. Interest payments made (or accrued) to a noteholder who is
a nonresident alien, foreign corporation or other non-United States person (a
"foreign person") generally will be considered "portfolio interest," and
generally will not be subject to United States federal income tax and
withholding tax, if the interest is not effectively connected with the conduct
of a trade or business within the United States by the foreign person and the
foreign person

o    is not actually or constructively a "10 percent shareholder" of the trust
     fund or the seller (including a holder of 10% of the outstanding
     securities) or a "controlled foreign corporation" with respect to which the
     trust fund or the seller is a "related person" within the meaning of the
     Code and

o    provides the owner trustee or other person who is otherwise required to
     withhold U.S. tax with respect to the notes (the "Withholding Agent") with
     an appropriate statement, signed under penalties of perjury, certifying
     that the beneficial owner who is an individual or corporation for federal
     income tax purposes of the note is a foreign person and providing the
     foreign person's name and address.

Generally, this statement is made on an IRS Form W-8BEN ("W-8BEN"), which is
effective for the remainder of the year of signature plus three full calendar
years unless a change in circumstances makes any information on the form
incorrect. Notwithstanding the preceding sentence, a W-8BEN with a U.S. taxpayer
identification number will remain effective until a change in circumstances
makes any information on the form incorrect, provided that the Withholding Agent
reports at least one payment annually to the beneficial owner on IRS Form
1042-S. The beneficial owner must inform the Withholding Agent within 30 days of
any change and furnish a new W-8BEN. A noteholder who is not an individual or
corporation (or an entity treated as a corporation for federal income tax
purposes) holding the Notes on its own behalf may have substantially increased
reporting requirements. In particular, in the case of notes held by a foreign
partnership (or foreign trust), the partners (or beneficiaries) rather than the
partnership (or trust) will be required to provide the certification discussed
above, and the partnership (or trust) will be required to provide certain
additional information.


                                       95



     If a note is held through a securities clearing organization or certain
other financial institutions, the organization or institution may provide the
relevant signed statement to the withholding agent; in that case, however, the
signed statement must be accompanied by a Form W-8BEN or substitute form
provided by the foreign person that owns the note. If the interest is not
portfolio interest, then it will be subject to United States federal income and
withholding tax at a rate of 30 percent, unless reduced or eliminated pursuant
to an applicable tax treaty.

     Any capital gain realized on the sale, redemption, retirement or other
taxable disposition of a note by a foreign person will be exempt from United
States federal income and withholding tax, provided that the gain is not
effectively connected with the conduct of a trade or business in the United
States by the foreign person and in the case of an individual foreign person,
the foreign person is not present in the United States for 183 days or more in
the taxable year.

     Backup Withholding. Each holder of a note (other than an exempt holder such
as a corporation, tax-exempt organization, qualified pension and profit-sharing
trust, individual retirement account or nonresident alien who provides
certification as to status as a nonresident) will be required to provide, under
penalties of perjury, a certificate containing the holder's name, address,
correct federal taxpayer identification number and a statement that the holder
is not subject to backup withholding. Should a nonexempt noteholder fail to
provide the required certification, the trust fund will be required to withhold
on the amount otherwise payable to the holder, and remit the withheld amount to
the IRS as a credit against the holder's federal income tax liability.

     Possible Alternative Treatments of the Notes. If, contrary to the opinion
of Tax Counsel, the IRS successfully asserted that one or more of the notes did
not represent debt for federal income tax purposes, the notes might be treated
as equity interests in the trust fund. If so treated, the trust fund might be
taxable as a corporation with the adverse consequences described above (and the
taxable corporation would not be able to reduce its taxable income by deductions
for interest expense on notes recharacterized as equity). Alternatively, and
most likely in the view of special counsel to the depositor, the trust fund
might be treated as a publicly traded partnership that would not be taxable as a
corporation because it would meet certain qualifying income tests. Nonetheless,
treatment of the notes as equity interests in that publicly traded partnership
could have adverse tax consequences to certain holders. For example, income to
certain tax-exempt entities (including pension funds) would be "unrelated
business taxable income," income to foreign holders generally would be subject
to U.S. tax and U.S. tax return filing and withholding requirements, and
individual holders might be subject to certain limitations on their ability to
deduct their share of the trust fund's expenses.

TAX CONSEQUENCES TO HOLDERS OF THE CERTIFICATES

     Treatment of the Trust Fund as a Partnership. The trust fund and the master
servicer will agree, and the certificateholders will agree by their purchase of
certificates, to treat the trust fund as a partnership for purposes of federal
and state income tax, franchise tax and any other tax measured in whole or in
part by income, with the assets of the partnership being the assets held by the
trust fund, the partners of the partnership being the certificateholders, and
the notes being debt of the partnership. However, the proper characterization of
the arrangement involving the trust fund, the certificates, the notes, the trust
fund and the servicer is not clear because there is no authority on transactions
closely comparable to that contemplated herein.

     A variety of alternative characterizations are possible. For example,
because the certificates have certain features characteristic of debt, the
certificates might be considered debt of the trust fund. That characterization
would not result in materially adverse tax consequences to certificateholders as
compared to the consequences from treatment of the certificates as equity in a
partnership, described below. The following discussion assumes that the
certificates represent equity interests in a partnership.

     Indexed Securities, etc. The following discussion assumes that all payments
on the certificates are denominated in U.S. dollars, none of the certificates
are Indexed securities or Strip certificates, and that a series of securities
includes a single class of certificates. If these conditions are not satisfied
with respect to any given series of certificates, additional tax considerations
with respect to the certificates will be disclosed in the applicable prospectus
supplement.


                                       96



     Partnership Taxation. As a partnership, the trust fund will not be subject
to federal income tax. Rather, each certificateholder will be required to
separately take into account the holder's distributive share of income, gains,
losses, deductions and credits of the trust fund. The trust fund's income will
consist primarily of interest and finance charges earned on the loans (including
appropriate adjustments for market discount, OID and bond premium) and any gain
upon collection or disposition of loans. The trust fund's deductions will
consist primarily of interest accruing with respect to the notes, servicing and
other fees, and losses or deductions upon collection or disposition of loans.

     The tax items of a partnership are allocable to the partners in accordance
with the Code, Treasury regulations and the partnership agreement (here, the
Trust Agreement and related documents). The Trust Agreement will provide, in
general, that the certificateholders will be allocated taxable income of the
trust fund for each month equal to the sum of (i) the interest that accrues on
the certificates in accordance with their terms for that month, including
interest accruing at the Pass-Through Rate for the month and interest on amounts
previously due on the certificates but not yet distributed; (ii) any trust fund
income attributable to discount on the Loans that corresponds to any excess of
the principal amount of the certificates over their initial issue price; (iii)
prepayment premium payable to the certificateholders for the month; and (iv) any
other amounts of income payable to the certificateholders for the month. That
allocation will be reduced by any amortization by the trust fund of premium on
loans that corresponds to any excess of the issue price of certificates over
their principal amount. All remaining taxable income of the trust fund will be
allocated to the depositor. Based on the economic arrangement of the parties,
this approach for allocating trust fund income should be permissible under
applicable Treasury regulations, although we can give no assurance that the IRS
would not require a greater amount of income to be allocated to
certificateholders. Moreover, even under the foregoing method of allocation,
certificateholders may be allocated income equal to the entire Pass-Through Rate
plus the other items described above even though the trust fund might not have
sufficient cash to make current cash distributions of that amount. Thus, cash
basis holders will in effect be required to report income from the certificates
on the accrual basis and certificateholders may become liable for taxes on trust
fund income even if they have not received cash from the trust fund to pay those
taxes. In addition, because tax allocations and tax reporting will be done on a
uniform basis for all certificateholders but certificateholders may be
purchasing certificates at different times and at different prices,
certificateholders may be required to report on their tax returns taxable income
that is greater or less than the amount reported to them by the trust fund.

     All of the taxable income allocated to a certificateholder that is a
pension, profit sharing or employee benefit plan or other tax-exempt entity
(including an individual retirement account) will constitute "unrelated business
taxable income" generally taxable to that holder under the Code.

     An individual taxpayer's share of expenses of the trust fund (including
fees to the servicer but not interest expense) would be miscellaneous itemized
deductions. Those deductions might be disallowed to the individual in whole or
in part and might result in the holder being taxed on an amount of income that
exceeds the amount of cash actually distributed to the holder over the life of
the trust fund.

     The trust fund intends to make all tax calculations relating to income and
allocations to certificateholders on an aggregate basis. If the IRS were to
require that those calculations be made separately for each loan, the trust fund
might be required to incur additional expense but it is believed that there
would not be a material adverse effect on certificateholders.

     Discount and Premium. It is believed that the loans were not issued with
OID, and, therefore, the trust fund should not have OID income. However, the
purchase price paid by the trust fund for the loans may be greater or less than
the remaining principal balance of the loans at the time of purchase. If so, the
loan will have been acquired at a premium or discount, as the case may be. (As
indicated above, the trust fund will make this calculation on an aggregate
basis, but might be required to recompute it on a loan by loan basis.)

     If the trust fund acquires the loans at a market discount or premium, the
trust fund will elect to include that discount in income currently as it accrues
over the life of the loans or to offset that premium against interest income on
the loans. As indicated above, a portion of the market discount income or
premium deduction may be allocated to certificateholders.


                                       97



     Section 708 Termination. Pursuant to Code Section 708, a sale or exchange
of 50% or more of the capital and profits in a partnership would cause a deemed
contribution of assets of the partnership (the "old partnership") to a new
partnership (the "new partnership") in exchange for interests in the new
partnership. Those interests would be deemed distributed to the partners of the
old partnership in liquidation thereof, which would not constitute a sale or
exchange. Accordingly, if the trust fund were characterized as a partnership,
then even if a sale of certificates terminated the partnership under Code
Section 708, the holder's basis in its certificates would remain the same.

     Disposition of Certificates. Generally, capital gain or loss will be
recognized on a sale of certificates in an amount equal to the difference
between the amount realized and the seller's tax basis in the certificates sold.
A certificateholder's tax basis in a certificate will generally equal the
holder's cost increased by the holder's share of trust fund income (includible
in income) and decreased by any distributions received with respect to that
certificate. In addition, both the tax basis in the certificates and the amount
realized on a sale of a certificate would include the holder's share of the
notes and other liabilities of the trust fund. A holder acquiring certificates
at different prices may be required to maintain a single aggregate adjusted tax
basis in the certificates, and, upon sale or other disposition of some of the
certificates, allocate a portion of that aggregate tax basis to the certificates
sold (rather than maintaining a separate tax basis in each certificate for
purposes of computing gain or loss on a sale of that certificate).

     Any gain on the sale of a certificate attributable to the holder's share of
unrecognized accrued market discount on the loans would generally be treated as
ordinary income to the holder and would give rise to special tax reporting
requirements. The trust fund does not expect to have any other assets that would
give rise to those special reporting requirements. Thus, to avoid those special
reporting requirements, the trust fund will elect to include market discount in
income as it accrues.

     If a certificateholder is required to recognize an aggregate amount of
income (not including income attributable to disallowed itemized deductions
described above) over the life of the certificates that exceeds the aggregate
cash distributions with respect thereto, that excess will generally give rise to
a capital loss upon the retirement of the certificates.

     Allocations Among Transferors and Transferees. In general, the trust fund's
taxable income and losses will be determined monthly and the tax items for a
particular calendar month will be apportioned among the certificateholders in
proportion to the principal amount of certificates owned by them as of the close
of the last day of that month. As a result, a holder purchasing certificates may
be allocated tax items (which will affect its tax liability and tax basis)
attributable to periods before the actual transaction.

     The use of a monthly convention may not be permitted by existing
regulations. If a monthly convention is not allowed (or only applies to
transfers of less than all of the partner's interest), taxable income or losses
of the trust fund might be reallocated among the certificateholders. The trust
fund's method of allocation between transferors and transferees may be revised
to conform to a method permitted by future regulations.

     Section 754 Election. In the event that a certificateholder sells its
certificates at a profit (loss), the purchasing certificateholder will have a
higher (lower) basis in the certificates than the selling certificateholder had.
The tax basis of the trust fund's assets will not be adjusted to reflect that
higher (or lower) basis unless the trust fund were to file an election under
Section 754 of the Code. In order to avoid the administrative complexities that
would be involved in keeping accurate accounting records, as well as potentially
onerous information reporting requirements, the trust fund will not make that
election. As a result, certificateholders might be allocated a greater or lesser
amount of trust fund income than would be appropriate based on their own
purchase price for certificates.

     Administrative Matters. The owner trustee is required to keep or have kept
complete and accurate books of the trust fund. Those books will be maintained
for financial reporting and tax purposes on an accrual basis and the fiscal year
of the trust fund will be the calendar year. The trustee will file a partnership
information return (IRS Form 1065) with the IRS for each taxable year of the
trust fund and will report each certificateholder's allocable share of items of
trust fund income and expense to holders and the IRS on Schedule K-1. The trust
fund will provide the Schedule K-l information to nominees that fail to provide
the trust fund with the information statement described below and those nominees
will be required to forward that information to the beneficial owners of the


                                       98



certificates. Generally, holders must file tax returns that are consistent with
the information return filed by the trust fund or be subject to penalties unless
the holder notifies the IRS of all those inconsistencies.

     Under Section 6031 of the Code, any person that holds certificates as a
nominee at any time during a calendar year is required to furnish the trust fund
with a statement containing certain information on the nominee, the beneficial
owners and the certificates so held. That information includes (i) the name,
address and taxpayer identification number of the nominee and (ii) as to each
beneficial owner (x) the name, address and identification number of the person,
(y) whether the person is a United States person, a tax-exempt entity or a
foreign government, an international organization, or any wholly owned agency or
instrumentality of either of the foregoing, and (z) certain information on
certificates that were held, bought or sold on behalf of the person throughout
the year. In addition, brokers and financial institutions that hold certificates
through a nominee are required to furnish directly to the trust fund information
as to themselves and their ownership of certificates. A clearing agency
registered under Section 17A of the Securities Exchange Act of 1934, as amended
is not required to furnish that information statement to the trust fund. The
information referred to above for any calendar year must be furnished to the
trust fund on or before the following January 31. Nominees, brokers and
financial institutions that fail to provide the trust fund with the information
described above may be subject to penalties.

     The depositor will be designated as the tax matters partner in the related
Trust Agreement and, as such, will be responsible for representing the
certificateholders in any dispute with the IRS. The Code provides for
administrative examination of a partnership as if the partnership were a
separate and distinct taxpayer. Generally, the statute of limitations for
partnership items does not expire before three years after the date on which the
partnership information return is filed. Any adverse determination following an
audit of the return of the trust fund by the appropriate taxing authorities
could result in an adjustment of the returns of the certificateholders, and,
under certain circumstances, a certificateholder may be precluded from
separately litigating a proposed adjustment to the items of the trust fund. An
adjustment could also result in an audit of a certificateholder's returns and
adjustments of items not related to the income and losses of the trust fund.

     Tax Consequences to Foreign Certificateholders. It is not clear whether the
trust fund would be considered to be engaged in a trade or business in the
United States for purposes of federal withholding taxes with respect to non-U.S.
Persons because there is no clear authority dealing with that issue under facts
substantially similar to those described herein. Although it is not expected
that the trust fund would be engaged in a trade or business in the United States
for those purposes, the trust fund will withhold as if it were so engaged in
order to protect the trust fund from possible adverse consequences of a failure
to withhold. The trust fund expects to withhold on the portion of its taxable
income, as calculated for this purpose which may exceed the distributions to
certificateholders, that is allocable to foreign certificateholders pursuant to
Section 1446 of the Code, as if the income were effectively connected to a U.S.
trade or business. Subsequent adoption of Treasury regulations or the issuance
of other administrative pronouncements may require the trust fund to change its
withholding procedures. In determining a holder's withholding status, the trust
fund may rely on IRS Form W-8BEN, IRS Form W-9 or the holder's certification of
nonforeign status signed under penalties of perjury. A holder who is not an
individual or corporation (or an entity treated as a corporation for federal
income tax purposes) holding the Notes on its own behalf may have substantially
increased reporting requirements. In particular, if the holder is a foreign
partnership (or foreign trust), the partners (or beneficiaries) rather than the
partnership (or trust) will be required to provide the certification discussed
above, and the partnership (or trust) will be required to provide certain
additional information.

     Each foreign holder might be required to file a U.S. individual or
corporate income tax return (including, in the case of a corporation, the branch
profits tax) on its share of the trust fund's income. Each foreign holder must
obtain a taxpayer identification number from the IRS and submit that number in
order to assure appropriate crediting of the taxes withheld. A foreign holder
generally would be entitled to file with the IRS a claim for refund with respect
to taxes withheld by the trust fund taking the position that no taxes were due
because the trust fund was not engaged in a U.S. trade or business. However,
interest payments made (or accrued) to a certificateholder who is a foreign
person generally will be considered guaranteed payments to the extent the
payments are determined without regard to the income of the trust fund. If these
interest payments are properly characterized as guaranteed payments, then the
interest will not be considered "portfolio interest." As a result,
certificateholders will be subject to United States federal income tax and
withholding tax at a rate of 30 percent, unless reduced or eliminated pursuant
to an applicable treaty. In that case, a foreign holder would only be entitled
to claim a refund for that portion of the taxes in excess of the taxes that
should be withheld with respect to the guaranteed payments.


                                       99



     Backup Withholding. Distributions made on the certificates and proceeds
from the sale of the certificates will be subject to a "backup" withholding tax
if, in general, the certificateholder fails to comply with certain
identification procedures, unless the holder is an exempt recipient under
applicable provisions of the Code.

                            OTHER TAX CONSIDERATIONS

     In addition to the federal income tax consequences described in "Federal
Income Tax Consequences," potential investors should consider the state, local
and foreign tax consequences of the acquisition, ownership, and disposition of
the securities. State and local tax law may differ substantially from the
corresponding federal law, and this discussion does not purport to describe any
aspect of the tax laws of any state or locality. Therefore, potential investors
are encouraged to consult their own tax advisors with respect to the various
state, local and foreign tax consequences of an investment in the securities.

                              ERISA CONSIDERATIONS

     The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and Section 4975 of the Code impose requirements on employee benefit plans (and
on certain other retirement plans and arrangements, including individual
retirement accounts and annuities and Keogh plans as well as collective
investment funds and separate accounts in which those plans, accounts or
arrangements are invested) (collectively, "Plans") subject to ERISA or to
Section 4975 of the Code and on persons who bear specified relationships to
Plans ("Parties in Interest") or are fiduciaries with respect to those Plans.
Generally, ERISA applies to investments made by Plans. Among other things, ERISA
requires that the assets of Plans be held in trust and that the trustee, or
other duly authorized fiduciary, have exclusive authority and discretion to
manage and control the assets of Plans. ERISA also imposes certain duties on
persons who are fiduciaries of Plans. Under ERISA, any person who exercises any
authority or control respecting the management or disposition of the assets of a
Plan is considered to be a fiduciary of the Plan (subject to certain exceptions
not here relevant). Certain employee benefit plans, such as governmental plans
(as defined in ERISA Section 3(32)) and, if no election has been made under
Section 410(d) of the Code, church plans (as defined in ERISA Section 3(33)),
are not subject to requirements imposed by ERISA and Section 4975 of the Code.
Accordingly, assets of those plans may be invested in securities without regard
to the considerations described above and below, subject to the provisions of
other applicable law. Any plan which is qualified and exempt from taxation under
Code Sections 401(a) and 501(a) is subject to the prohibited transaction rules
set forth in Code Section 503.

     On November 13, 1986, the United States Department of Labor (the "DOL")
issued final regulations concerning the definition of what constitutes the
assets of a Plan. (Labor Reg. Section 2510.3-101 (the "Plan Assets
Regulation")). Under this regulation, the underlying assets and properties of
corporations, partnerships and certain other entities in which a Plan makes an
"equity" investment could be deemed for purposes of ERISA to be assets of the
investing Plan in certain circumstances. Under the Plan Assets Regulation, the
term "equity interest" is defined as any interest in an entity other than an
instrument that is treated as indebtedness under applicable local law and has no
"substantial equity features." If securities are not treated as equity interests
in the issuer for purposes of the Plan Assets Regulation, a Plan's investment in
the securities would not cause the assets of the issuer to be deemed plan
assets. If the securities are deemed to be equity interests in the issuer, the
issuer could be considered to hold plan assets because of a Plan's investment in
those securities. In that event, the master servicer and other persons
exercising management or discretionary control over the assets of the issuer or
providing services with respect to those assets could be deemed to be
fiduciaries or other parties in interest with respect to investing Plans and
thus subject to the prohibited transaction provisions of Section 406 of ERISA
and Section 4975 of the Code and, in the case of fiduciaries, to the fiduciary
responsibility provisions of Title I of ERISA, with respect to transactions
involving the issuer's assets. Trust certificates are "equity interests" for
purposes of the Plan Asset Regulation.

     In addition to the imposition of general fiduciary standards of investment
prudence and diversification, ERISA and Section 4975 of the Code prohibit a
broad range of transactions involving assets of a Plan and persons ("Parties in
Interest") having certain specified relationships to a Plan and impose
additional prohibitions where Parties in Interest are fiduciaries with respect
to that Plan. Because the loans may be deemed assets of each Plan that purchases
equity securities, an investment in equity securities by a Plan might be a
prohibited transaction under ERISA Sections 406 and 407 and subject to an excise
tax under Code Section 4975 unless a statutory, regulatory or administrative
exemption applies.


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     Without regard to whether securities are considered to be equity interest
in the issuer, certain affiliates of the issuer might be considered or might
become Parties in Interest with respect to a Plan. In this case, the acquisition
or holding of the securities by or on behalf of the Plan could constitute or
give rise to a prohibited transaction, within the meaning of ERISA and Section
4975 of the Code, unless they were subject to one or more exemptions. Depending
on the relevant facts and circumstances, certain prohibited transaction
exemptions may apply to the purchase or holding of the securities -- for
example, Prohibited Transaction Class Exemption ("PTCE") 96-23, which exempts
certain transactions effected on behalf of a Plan by an "in-house asset
manager"; PTCE 95-60, which exempts certain transactions by insurance company
general accounts; PTCE 91-38, which exempts certain transactions by bank
collective investment funds; PTCE 90-1, which exempts certain transactions by
insurance company pooled separate accounts; or PTCE 84-14, which exempts certain
transactions effected on behalf of a Plan by a "qualified professional asset
manager". We can give no assurance that any of these exemptions will apply with
respect to any Plan's investment in securities, or that such an exemption, if it
did apply, would apply to all prohibited transactions that may occur in
connection with the investment. Furthermore, these exemptions would not apply to
transactions involved in operation of the trust if, as described above, the
assets of the trust were considered to include plan assets.

     The DOL has granted to certain underwriters individual administrative
exemptions (the "Underwriter Exemptions") from certain of the prohibited
transaction rules of ERISA and the related excise tax provisions of Section 4975
of the Code with respect to the initial purchase, the holding and the subsequent
resale by Plans of securities, including certificates, underwritten or privately
placed by that underwriter or its affiliate or by a syndicate managed by that
underwriter or its affiliate and issued by entities that hold investment pools
consisting of certain secured receivables, loans and other obligations and the
servicing, operation and management of the investment pools, provided the
conditions and requirements of the Underwriter Exemptions are met. The Exemption
also permits the entity to hold an interest-rate swap or yield supplement
agreement if it meets requirements set forth in the Exemption.

     While each Underwriter Exemption is an individual exemption separately
granted to a specific underwriter, the terms and conditions which generally
apply to the Underwriter Exemptions are substantially identical, and include the
following:

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

          (2) the securities acquired by the Plan have received a rating at the
     time of the acquisition that is one of the four highest generic rating
     categories from Standard & Poor's Ratings Services, a division of The
     McGraw-Hill Companies, Inc. ("S&P"), Moody's Investors Service, Inc.
     ("Moody's"), or Fitch Ratings, Inc. ("Fitch") (each, a "Rating Agency");

          (3) the trustee is not an affiliate of any other member of the
     Restricted Group, as defined below (other than an underwriter);

          (4) the sum of all payments made to and retained by the underwriters
     in connection with the distribution of the securities represents not more
     than reasonable compensation for underwriting the securities; the sum of
     all payments made to and retained by the seller pursuant to the assignment
     of the loans to the issuer represents not more than the fair market value
     of the loans; the sum of all payments made to and retained by the servicer
     and any sub-servicer represents not more than reasonable compensation for
     the person's services under the agreement pursuant to which the loans are
     pooled and reimbursements of the person's reasonable expenses in connection
     therewith; and

          (5) the Plan investing in the certificates is an "accredited investor"
     as defined in Rule 501(a)(1) of Regulation D of the SEC under the
     Securities Act.


                                       101



     The issuer must also meet the following requirements:

          (i) the corpus of the issuer must consist solely of assets of the type
     that have been included in other investment pools;

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

          (iii) securities evidencing interests in those other investment pools
     must have been purchased by investors other than Plans for at least one
     year prior to any Plan's acquisition of securities.

     Moreover, the Underwriter Exemptions generally provide relief from certain
self-dealing/conflict of interest prohibited transactions that may occur when a
Plan fiduciary causes a Plan to acquire securities of an issuer holding
receivables as to which the fiduciary (or its affiliate) is an obligor, provided
that, among other requirements:

o    in the case of an acquisition in connection with the initial issuance of
     certificates, at least fifty percent (50%) of each class of certificates in
     which Plans have invested, and at least fifty percent (50%) of aggregate
     interests in the issuer are acquired by persons independent of the
     Restricted Group;

o    the fiduciary (or its affiliate) is an obligor with respect to not more
     than five percent (5%) of the fair market value of the obligations
     contained in the investment pool;

o    the Plan's investment in securities of any class does not exceed
     twenty-five percent (25%) of all of the securities of that class
     outstanding at the time of the acquisition;

o    immediately after the acquisition, no more than twenty-five percent (25%)
     of the assets of any Plan with respect to which the person is a fiduciary
     is invested in securities representing an interest in one or more issuers
     containing assets sold or serviced by the same entity; and

o    the Plan is not sponsored by a member of the Restricted Group, as defined
     below.

     The Underwriter Exemptions provide only limited relief to Plans sponsored
by the seller, an underwriter, the trustee, the master servicer, any provider of
credit support to the trust, any counterparty to a swap contained in the trust,
any obligor with respect to loans included in the investment pool constituting
more than five percent (5%) of the aggregate unamortized principal balance of
the assets in the trust fund, or any affiliate of those parties (the "Restricted
Group").

     The Underwriter Exemptions provide exemptive relief to certain
mortgage-backed and asset-backed securities transactions using pre-funding
accounts. Mortgage loans or other secured receivables (the "obligations")
supporting payments to securityholders, and having a value equal to no more than
twenty-five percent (25%) of the total principal amount of the securities being
offered by the issuer, may be transferred to the issuer within a 90-day or
three-month period following the closing date, instead of being required to be
either identified or transferred on or before the closing date. The relief is
available when the prefunding account satisfies certain conditions.

     The rating of a security may change. If a class of securities no longer has
a required rating from at least one Rating Agency, the security will no longer
be eligible for relief under the Underwriter Exemption (although a Plan that had
purchased the security when it had a permitted rating would not be required by
the Underwriter Exemption to dispose of it.) A certificate that satisfies the
requirements of the Underwriter Exemptions other than the rating requirement may
be eligible for purchase by an insurance company investing assets of its general
account that include plan assets when the requirements of Sections I and III of
Prohibited Transaction Class Exemption 95-60 are met.


                                       102



     The prospectus supplement for each series of securities will indicate the
classes of securities, if any, offered thereby as to which it is expected that
an Underwriter Exemption will apply.

     Any Plan fiduciary which proposes to cause a Plan to purchase securities
are encouraged to consult with its counsel concerning the impact of ERISA and
the Code, the applicability of the Underwriter Exemptions, the effect of the
Plan Assets Regulation, and the potential consequences in their specific
circumstances, prior to making that investment. Moreover, each Plan fiduciary
should determine whether under the general fiduciary standards of investment
prudence and diversification an investment in the securities is appropriate for
the Plan, taking into account the overall investment policy of the Plan and the
composition of the Plan's investment portfolio.

     The sale of certificates to a Plan is in no respect a representation by the
issuer or any underwriter of the Certificates that this investment meets all
relevant legal requirements with respect to investments by Plans generally or
any particular Plan, or that this investment is appropriate for Plans generally
or any particular Plan.

                                LEGAL INVESTMENT

     The prospectus supplement for each series of securities will specify which,
if any, of the classes of securities offered thereby constitute "mortgage
related securities" for purposes of the Secondary Mortgage Market Enhancement
Act of 1984 ("SMMEA"). Classes of securities that qualify as "mortgage related
securities" will be legal investments for persons, trusts, corporations,
partnerships, associations, business trusts, and business entities (including
depository institutions, life insurance companies and pension funds) created
pursuant to or existing under the laws of the United States or of any state
(including the District of Columbia and Puerto Rico) whose authorized
investments are subject to state regulations to the same extent as, under
applicable law, obligations issued by or guaranteed as to principal and interest
by the United States or those entities. Under SMMEA, if a state enacts
legislation prior to October 4, 1991 specifically limiting the legal investment
authority of those entities with respect to "mortgage related securities",
securities will constitute legal investments for entities subject to the
legislation only to the extent provided therein. Approximately twenty-one states
adopted the legislation prior to the October 4, 1991 deadline. SMMEA provides,
however, that in no event will the enactment of that legislation affect the
validity of any contractual commitment to purchase, hold or invest in
securities, or require the sale or other disposition of securities, so long as
the contractual commitment was made or the securities were acquired prior to the
enactment of the legislation.

     SMMEA also amended the legal investment authority of federally-chartered
depository institutions as follows: federal savings and loan associations and
federal savings banks may invest in, sell or otherwise deal in securities
without limitations as to the percentage of their assets represented thereby,
federal credit unions may invest in mortgage related securities, and national
banks may purchase securities for their own account without regard to the
limitations generally applicable to investment securities set forth in 12 U.S.C.
24 (Seventh), subject in each case to that regulations that the applicable
federal authority may prescribe. In this connection, federal credit unions
should review the National Credit Union Administration ("NCUA") Letter to Credit
Unions No. 96, as modified by Letter to Credit Unions No. 108, which includes
guidelines to assist federal credit unions in making investment decisions for
mortgage related securities and the NCUA's regulation "Investment and Deposit
Activities" (12 C.F.R. Part 703), which sets forth certain restrictions on
investment by federal credit unions in mortgage related securities (in each case
whether or not the class of securities under consideration for purchase
constituted a "mortgage related security"). The NCUA issued final regulations
effective December 2, 1991 that restrict and in some instances prohibit the
investment by Federal Credit Unions in certain types of mortgage related
securities.

     All depository institutions considering an investment in the securities
(whether or not the class of securities under consideration for purchase
constitutes a "mortgage related security") should review the Federal Financial
Institutions Examination Council's Supervisory Policy Statement on the
Securities Activities (to the extent adopted by their respective regulators)
(the "Policy Statement") setting forth, in relevant part, certain securities
trading and sales practices deemed unsuitable for an institution's investment
portfolio, and guidelines for (and restrictions on) investing in mortgage
derivative products, including "mortgage related securities", which are
"high-risk mortgage securities" as defined in the Policy Statement. According to
the Policy Statement, those "high-risk mortgage securities" include securities
not entitled to distributions allocated to principal or interest, or Subordinate
Securities. Under the Policy Statement, it is the responsibility of each
depository institution to determine, prior to purchase (and


                                       103



at stated intervals thereafter), whether a particular mortgage derivative
product is a "high-risk mortgage security", and whether the purchase (or
retention) of that product would be consistent with the Policy Statement.

     The foregoing does not take into consideration the applicability of
statutes, rules, regulations, orders guidelines or agreements generally
governing investments made by a particular investor, including, but not limited
to "prudent investor" provisions, percentage-of-assets limits and provisions
which may restrict or prohibit investment in securities which are not "interest
bearing" or "income paying," or in securities which are issued in book-entry
form.

     There may be other restrictions on the ability of certain investors,
including depository institutions, either to purchase securities or to purchase
securities representing more than a specified percentage of the investor's
assets. Investors are encouraged to consult their own legal advisors in
determining whether and to what extent the securities constitute legal
investments for those investors.

                             METHOD OF DISTRIBUTION

     Securities are being offered hereby in series from time to time (each
series evidencing or relating to a separate trust fund) through any of the
following methods:

o    by negotiated firm commitment or best efforts underwriting and public
     reoffering by underwriters;

o    by agency placements through one or more placement agents primarily with
     institutional investors and dealers; and

o    by placement directly by the depositor with institutional investors.

     A prospectus supplement will be prepared for each series which will
describe the method of offering being used for that series and will set forth
the identity of any underwriters thereof and either the price at which the
series is being offered, the nature and amount of any underwriting discounts or
additional compensation to those underwriters and the proceeds of the offering
to the depositor, or the method by which the price at which the underwriters
will sell the securities will be determined. Each prospectus supplement for an
underwritten offering will also contain information regarding the nature of the
underwriters' obligations, any material relationship between the depositor and
any underwriter and, where appropriate, information regarding any discounts or
concessions to be allowed or reallowed to dealers or others and any arrangements
to stabilize the market for the securities so offered. In firm commitment
underwritten offerings, the underwriters will be obligated to purchase all of
the securities of the series if any of those securities are purchased.
Securities may be acquired by the underwriters for their own accounts and may be
resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale.

     Underwriters and agents may be entitled under agreements entered into with
the depositor to indemnification by the depositor against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the underwriters or agents may be required to
make in respect thereof.

     In relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a "Relevant Member State"), each
underwriter will be required to represent and agree with the depositor that with
effect from and including the date on which the Prospectus Directive is
implemented in that Relevant Member State (the "Relevant Implementation Date")
and with respect to any class of securities with a minimum denomination of less
than $100,000, 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:


                                       104



     (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 class of securities of a series, which class
has a minimum denomination of less than $100,000, 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.

     If a series is offered other than through underwriters, the prospectus
supplement relating thereto will contain information regarding the nature of the
offering and any agreements to be entered into between the depositor and
purchasers of securities of the series.

                                  LEGAL MATTERS

     The validity of the securities of each series, including certain federal
income tax consequences with respect thereto, will be passed upon for the
depositor by Sidley Austin LLP, 787 Seventh Avenue, New York, New York 10019, or
by Thacher Proffitt & Wood LLP, Two World Financial Center, New York, New York
10281, as specified in the prospectus supplement.

                              FINANCIAL INFORMATION

     A new trust fund will be formed with respect to each series of securities
and no trust fund will engage in any business activities or have any assets or
obligations prior to the issuance of the related series of securities.
Accordingly, no financial statements with respect to any trust fund will be
included in this prospectus or in the related prospectus supplement.

                                     RATING

     It is a condition to the issuance of the securities of each series offered
hereby and by the prospectus supplement that they shall have been rated in one
of the four highest rating categories by the nationally recognized statistical
rating agency or agencies (each, a "Rating Agency") specified in the related
prospectus supplement.

     The rating would be based on, among other things, the adequacy of the value
of the Trust Fund Assets and any credit enhancement with respect to the class
and will reflect the Rating Agency's assessment solely of the likelihood that
holders of a class of securities of the class will receive payments to which the
securityholders are entitled under the related Agreement. The rating will not
constitute an assessment of the likelihood that principal prepayments on the
related loans will be made, the degree to which the rate of the prepayments
might differ from that originally anticipated or the likelihood of early
optional termination of the series of securities. The rating should not be
deemed a recommendation to purchase, hold or sell securities, inasmuch as it
does not address market price or suitability for a particular investor. Each
security rating should be evaluated independently of any other security rating.
The rating will not address the possibility that prepayment at higher or lower
rates than anticipated by an investor may cause the investor to experience a
lower than anticipated yield or that an investor purchasing a security at a
significant premium might fail to recoup its initial investment under certain
prepayment scenarios.


                                       105



     We can give no assurance that any the rating will remain in effect for any
given period of time or that it may not be lowered or withdrawn entirely by the
Rating Agency in the future if in its judgment circumstances in the future so
warrant. In addition to being lowered or withdrawn due to any erosion in the
adequacy of the value of the Trust Fund Assets or any credit enhancement with
respect to a series, the rating might also be lowered or withdrawn among other
reasons, because of an adverse change in the financial or other condition of a
credit enhancement provider or a change in the rating of the credit enhancement
provider's long term debt.

     The amount, type and nature of credit enhancement, if any, established with
respect to a series of securities will be determined on the basis of criteria
established by each Rating Agency rating classes of the series. The criteria are
sometimes based upon an actuarial analysis of the behavior of mortgage loans in
a larger group. The analysis is often the basis upon which each Rating Agency
determines the amount of credit enhancement required with respect to each the
class. We can give no assurance that the historical data supporting the
actuarial analysis will accurately reflect future experience nor assurance that
the data derived from a large pool of mortgage loans accurately predicts the
delinquency, foreclosure or loss experience of any particular pool of loans. We
can give no assurance that values of any Properties have remained or will remain
at their levels on the respective dates of origination of the related loans. If
the residential real estate markets should experience an overall decline in
property values such that the outstanding principal balances of the loans in a
particular trust fund and any secondary financing on the related Properties
become equal to or greater than the value of the Properties, the rates of
delinquencies, foreclosures and losses could be higher than those now generally
experienced in the mortgage lending industry. In addition, adverse economic
conditions (which may or may not affect real property values) may affect the
timely payment by mortgagors of scheduled payments of principal and interest on
the loans and, accordingly, the rates of delinquencies, foreclosures and losses
with respect to any trust fund. To the extent that those losses are not covered
by credit enhancement, the losses will be borne, at least in part, by the
holders of one or more classes of the securities of the related series.


                                       106



                             INDEX TO DEFINED TERMS

Accretion Directed...................................................         30
Accrual..............................................................         32
Adjustable Rate......................................................         31
Agreement............................................................         14
AMT..................................................................         89
APR..................................................................         18
Asset Conservation Act...............................................         70
Available Funds......................................................         26
beneficial owner.....................................................         36
Book-Entry Securities................................................         35
Callable.............................................................         32
Capitalized Interest Account.........................................         52
Cash Flow Bond Method................................................         91
CERCLA...............................................................         69
CI...................................................................         37
Claimable Amount.....................................................         78
Class Security Balance...............................................         27
Clearstream, Luxembourg..............................................         37
Code.................................................................         80
COFI securities......................................................         34
Collateral Value.....................................................         18
Combined Loan-to-Value Ratio.........................................         18
Companion Class......................................................         30
Component Securities.................................................         30
Contingent Regulations...............................................         81
Cooperative..........................................................         38
cooperative loans....................................................         15
cooperatives.........................................................         15
Cut-off Date Principal Balance.......................................         25
DBC..................................................................         37
Debt securities......................................................         80
debt-to-income ratio.................................................         22
Definitive Security..................................................         36
depositor............................................................         20
Detailed Description.................................................         15
Disqualified Organization............................................         88
DOL..................................................................        100
DTC..................................................................         35
Eleventh District....................................................         33
ERISA................................................................        100
Euroclear............................................................         35
Euroclear Operator...................................................         38
Euroclear Participants...............................................         38
European Depositaries................................................         36
excess servicing.....................................................         91
Exchange Act.........................................................         19
FHA..................................................................         15
FHLBSF...............................................................         33
Final Bond Premium Regulations.......................................         84
Financial Intermediary...............................................         36
Fitch................................................................        101
Fixed Rate...........................................................         31
Floating Rate........................................................         31
foreign person.......................................................         95
FTC Rule.............................................................         74
Funding Period.......................................................         52
Garn-St Germain Act..................................................         72
HI Contracts.........................................................         73
HI Loans.............................................................         73
Improper Knowledge...................................................         88
Indenture............................................................         24
Indirect Participants................................................         36
Insurance Proceeds...................................................         50
Insured Expenses.....................................................         50
Interest Only........................................................         32
Interest Weighted Securities.........................................         83
Inverse Floating Rate................................................         31
IRS..................................................................         81
L/C Bank.............................................................         41
L/C Percentage.......................................................         41
Liquidation Expenses.................................................         50
Liquidation Proceeds.................................................         50
Loan Rate............................................................         15
Loan-to-Value Ratio..................................................         18
Master Servicing Fee.................................................         60
Moody's..............................................................    53, 101
Mortgage.............................................................         48
mortgage related security............................................        103
NAS..................................................................         30
National Cost of Funds Index.........................................         34
NCUA.................................................................        103
New CI...............................................................         37
new partnership......................................................         98
Non-Accelerated Senior...............................................         30
Noneconomic Residual Interest Security...............................         88
Nonresidents.........................................................         93
Notional Amount Securities...........................................         30
obligations..........................................................        102
Offshore Location....................................................         89
OID..................................................................         80
OID Regulations......................................................         80
old partnership......................................................         98
OTS..................................................................         34
PACs.................................................................         30
Partial Accrual......................................................         32
Participants.........................................................         36
Parties in Interest..................................................        100
Pass-Through Securities..............................................         90
Pay-Through Security.................................................         82
percentage interests.................................................         61
Permitted Investments................................................         52
Plan Assets Regulation...............................................        100
Planned Principal Class..............................................         30
Plans................................................................        100
Policy Statement.....................................................        103
Pool Insurance Policy................................................         42


                                       107



Pool Insurer.........................................................         42
Pooling and Servicing Agreement......................................         14
Pre-Funded Amount....................................................         52
Pre-Funding Account..................................................         52
Prepayment Assumption................................................         82
Primary Mortgage Insurance Policy....................................         16
Prime Rate...........................................................         35
Principal Only.......................................................         32
Principal Prepayments................................................         27
Properties...........................................................         16
Property Improvement Loans...........................................         75
PTCE.................................................................        101
Purchase Price.......................................................         23
Rating Agency........................................................   101, 105
Ratio Strip Securities...............................................         91
RCRA.................................................................         70
Record Date..........................................................         25
Reference Bank Rate..................................................         33
Refinance Loan.......................................................         18
Regular Interest Securities..........................................         80
Relevant Depositary..................................................         36
Relevant Implementation Date.........................................        104
Relevant Member State................................................        104
Relief Act...........................................................      9, 74
REMIC................................................................     26, 80
Residual Interest Security...........................................         86
Restricted Group.....................................................        102
Retained Interest....................................................         25
Rules................................................................         36
S&P..................................................................        101
Sale and Servicing Agreement.........................................         14
Scheduled Principal Class............................................         31
SEC..................................................................         15
secured creditor exemption...........................................         69
Securities Act.......................................................         19
Security Account.....................................................         49
Security Owners......................................................         35
Security Register....................................................         25
Sellers..............................................................         14
Senior Securities....................................................         40
Sequential Pay.......................................................         31
Servicing Fee........................................................         90
Short-Term Note......................................................         95
Single Family Properties.............................................         17
SMMEA................................................................        103
Strip................................................................         31
Stripped Securities..................................................         90
Subordinate Securities...............................................         40
Subsequent Loans.....................................................         52
Super Senior.........................................................         31
Support Class........................................................         31
TACs.................................................................         31
Targeted Principal Class.............................................         31
Tax Counsel..........................................................         79
Terms and Conditions.................................................         38
TIN..................................................................         93
Title I Loans........................................................         75
Title I Program......................................................         75
Title V..............................................................         72
Trust Agreement......................................................         14
Trust Fund Assets....................................................         14
UCC..................................................................         69
Underwriter Exemptions...............................................        101
VA...................................................................         15
VA Guaranty..........................................................         59
Variable Rate........................................................         31
W-8BEN...............................................................         95
Withholding Agent....................................................         95


                                       108