$1,456,500,000 (Approximate)

OPTION ONE MORTGAGE LOAN TRUST 2006-3

Issuing Entity

  OPTION ONE MORTGAGE ACCEPTANCE CORPORATION Depositor   OPTION ONE MORTGAGE CORPORATION Originator, Sponsor and Servicer  

ASSET-BACKED CERTIFICATES, SERIES 2006-3

Consider carefully the risk factors beginning on page S-14 in this prospectus supplement and on page 4 in the prospectus. The certificates represent obligations of the trust only and do not represent an interest in or obligation of Option One Mortgage Acceptance Corporation, Option One Mortgage Corporation or any of their affiliates. This prospectus supplement may be used to offer and sell the certificates only if accompanied by the prospectus. 

Only the fourteen classes of certificates identified below are being offered by this prospectus supplement and the accompanying prospectus.

The Class A and Mezzanine Certificates

·   Represent ownership interests in a trust consisting primarily of a pool of first and second lien fixed-rate and adjustable-rate residential mortgage loans. The mortgage loans will be segregated into two groups, one consisting of mortgage loans with principal balances that conform to Fannie Mae and Freddie Mac loan limits and one consisting of mortgage loans with principal balances that may or may not conform to Fannie Mae or Freddie Mac loan limits

·   Will accrue interest at a rate equal to one-month LIBOR plus a specified margin, subject to certain limitations described in this prospectus supplement.

·   Will be entitled to monthly distributions beginning in November 2006.

Credit Enhancement

·   Subordination as described in this prospectus supplement under “Description of the Certificates—Credit Enhancement.”

·   Overcollateralization as described in this prospectus supplement under “Description of the Certificates—Overcollateralization Provisions.”

·   Excess Interest as described in this prospectus supplement under “Description of the Certificates—Overcollateralization Provisions.”

·   A primary mortgage insurance policy as described in this prospectus supplement under “Description of the Certificates—The Mortgage Insurance Policy.”

The Certificates will also have the benefit of an interest rate swap agreement as described in this prospectus supplement under “Description of the Certificates—Interest Rate Swap Agreement, the Swap Provider and the Supplemental Interest Trust.”

Class	Original Certificate Principal Balance	Pass-Through Rate(1)(2)	Price to Public	Underwriting Discount	Proceeds to the Depositor(3)
Class I-A-1	$539,019,000	Variable	100.0000%	0.2000%	99.8000%
Class II-A-1	$278,254,000	Variable	100.0000%	0.2500%	99.7500%
Class II-A-2	$163,427,000	Variable	100.0000%	0.2500%	99.7500%
Class II-A-3	$121,682,000	Variable	100.0000%	0.2500%	99.7500%
Class II-A-4	$  60,868,000	Variable	100.0000%	0.2500%	99.7500%
Class M-1	$  76,500,000	Variable	100.0000%	0.2500%	99.7500%
Class M-2	$  73,500,000	Variable	100.0000%	0.2500%	99.7500%
Class M-3	$  25,500,000	Variable	100.0000%	0.2500%	99.7500%
Class M-4	$  27,000,000	Variable	100.0000%	0.2500%	99.7500%
Class M-5	$  24,750,000	Variable	100.0000%	0.2500%	99.7500%
Class M-6	$  18,000,000	Variable	100.0000%	0.2500%	99.7500%
Class M-7	$  18,750,000	Variable	100.0000%	0.2500%	99.7500%
Class M-8	$  12,000,000	Variable	100.0000%	0.2500%	99.7500%
Class M-9	$  17,250,000	Variable	100.0000%	0.2500%	99.7500%

___________________

⁽¹⁾ Determined as provided herein.

⁽²⁾ Subject to increase after the optional termination date and subject to certain limitations described herein.

⁽³⁾ Before deducting expenses estimated to be $800,000.

Neither the SEC nor any state securities commission has approved these securities or determined that this prospectus supplement or the prospectus is accurate or complete. Any representation to the contrary is a criminal offense. The Attorney General of the State of New York has not passed on or endorsed the merits of this offering. Any representation to the contrary is unlawful.

Delivery of the Class A and Mezzanine Certificates will be made in book-entry form through the facilities of The Depository Trust Company and upon request, through Clearstream Banking Luxembourg and the Euroclear Bank SA/NV on or about October 27, 2006.

 RBS GREENWICH CAPITAL  BANC OF AMERICA SECURITIES LLC

(Joint Lead Managers and Joint Book-Runners)

BARCLAYS CAPITAL	HSBC
JPMORGAN	LEHMAN BROTHERS

H&R BLOCK FINANCIAL ADVISORS INC.

(Co-Managers)

October 19, 2006

TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT

SUMMARY OF TERMS

RISK FACTORS

AFFILIATIONS AND RELATED TRANSACTIONS

THE MORTGAGE POOL

STATIC POOL INFORMATION

THE ISSUING ENTITY

THE DEPOSITOR

THE ORIGINATOR AND SPONSOR

THE SELLERS

THE SERVICER

THE TRUSTEE

THE POOLING AGREEMENT

DESCRIPTION OF THE CERTIFICATES

YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS

USE OF PROCEEDS

FEDERAL INCOME TAX CONSEQUENCES

CONSIDERATIONS FOR BENEFIT PLAN INVESTORS

LEGAL INVESTMENT CONSIDERATIONS

METHOD OF DISTRIBUTION

LEGAL MATTERS

RATINGS

INDEX OF DEFINED TERMS

ANNEX I

ANNEX II

ANNEX III

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State), each Underwriter severally has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date) it has not made and will not make an offer of certificates to the public in that Relevant Member State prior to the publication of a prospectus in relation to the certificates 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 certificates to the public in that Relevant Member State at any time:

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

(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €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 Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.

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

United Kingdom

Each Underwriter severally has represented and agreed that:

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

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

SUMMARY OF TERMS

·   This summary presents a brief description of selected information from this document and does not contain all of the information that you need to consider in making your investment decision. To understand all of the terms of the Class A and Mezzanine Certificates, read carefully this entire document and the accompanying prospectus. Annex I, Annex II and Annex III are each incorporated by reference in this prospectus supplement.

·   This summary provides an overview of certain calculations, cash flow priorities and other information to aid your understanding and is qualified by the full description of these calculations, cash flow priorities and other information in this prospectus supplement and the accompanying prospectus. Some of the information consists of forward-looking statements relating to future economic performance or projections and other financial items. Forward-looking statements are subject to a variety of risks and uncertainties that could cause actual results to differ from the projected results. Those risks and uncertainties include, among others, general economic and business conditions, regulatory initiatives and compliance with governmental regulations, and various other matters, all of which are beyond our control. Accordingly, what actually happens may be very different from what we predict in our forward-looking statements.

Offered Certificates

On the Closing Date, Option One Mortgage Loan Trust 2006-3 will issue twenty classes of certificates, fourteen of which are being offered by this prospectus supplement and the accompanying prospectus. The assets of the trust that will support the certificates will consist primarily of a pool of fixed-rate and adjustable-rate mortgage loans having the characteristics described in this prospectus supplement. The Class I-A-1 Certificates, the Class II-A-1 Certificates, the Class II-A-2 Certificates, the Class II-A-3 Certificates, the Class II-A-4 Certificates the Class M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the Class M-5 Certificates, the Class M-6 Certificates, the Class M-7 Certificates, the Class M-8 Certificates and the Class M-9 Certificates are the only classes of offered certificates.

The Class A and Mezzanine Certificates will be book-entry securities clearing through The Depository Trust Company (in the United States) or upon request, through Clearstream Banking Luxembourg and the Euroclear Bank SA/NV (in Europe) in minimum denominations of $25,000.

Other Certificates

The trust will issue six additional classes of certificates. These certificates will be designated as the Class M-10 Certificates, the Class M-11 Certificates, the Class C Certificates, the Class P Certificates, the Class R Certificates and the Class R-X Certificates and are not being offered to the public by this prospectus supplement and the accompanying prospectus. Any information about the other certificates presented in this prospectus supplement is presented only to provide a better understanding of the Offered Certificates.

The Class M-10 Certificates and the Class M-11 Certificates are subordinate to the Offered Certificates. The Class M-10 Certificates have an initial certificate principal balance of $18,750,000. The Class M-11 Certificates have an initial certificate principal balance of $15,000,000. The Class M-10 and Class M-11 Certificates will be sold by the Depositor to the Underwriters on the closing date.

The Class C Certificates will have an initial certificate principal balance of approximately $9,749,900 which is approximately equal to the initial overcollateralization required by the pooling agreement. The Class C Certificates initially evidence an interest of approximately 0.65% in the trust. The Class C Certificates will be delivered to the Sponsor, or its designee, as partial consideration for the sale of the mortgage loans.

The Class P Certificates will have an original certificate principal balance of $100 and will not be entitled to distributions in respect of interest. The Class P Certificates will be entitled to all prepayment premiums or charges received in respect of the mortgage loans. The Class P Certificates will be delivered to the Sponsor, or its designee, as partial consideration for the sale of the mortgage loans.

The Class R Certificates and Class R-X Certificates will not have original certificate principal balances and are the classes of certificates representing the residual interests in the related REMICS. The Class R Certificates and the Class R-X Certificates will be delivered to the sponsor, or its designee, as partial consideration for the sale of the mortgage loans.

We refer you to “Description of the Certificates— General,” “—Book-Entry Certificates” and “The Mortgage Pool” in this prospectus supplement for additional information.

Closing Date

On or about October 27, 2006.

Cut-off Date

October 1, 2006.

Subsequent Cut-off Date

For mortgage loans to be purchased by the Trustee on behalf of the trust after the Closing Date, the later of the first day of the month in which such purchase will take place and the origination date of such mortgage loan.

Issuing Entity

Option One Mortgage Loan Trust 2006-3. The issuing entity will be established under a pooling agreement among Option One Mortgage Acceptance Corporation, as depositor, Option One Mortgage Corporation, as servicer and Wells Fargo Bank, N.A., as trustee. The issuing entity is also referred to as the trust in this prospectus supplement.

Depositor

Option One Mortgage Acceptance Corporation, a Delaware corporation and a direct or indirect wholly-owned subsidiary of Option One Mortgage Corporation. We refer you to “The Depositor” in this prospectus supplement for additional information.

Originator, Sponsor and Servicer

Option One Mortgage Corporation, a California corporation. We refer you to “The Originator and Sponsor” and “The Servicer” in this prospectus supplement and “Servicing of the Mortgage Loans - The Servicer” in the prospectus for additional information.

Seller

Any or all of (i) Option One Mortgage Corporation, a California corporation, (ii) Option One Mortgage Capital Corporation, a Delaware corporation, or (iii) Option One Owner Trust 2001-1A, Option One Owner Trust 2001-1B, Option One Owner Trust 2001-2, Option One Owner Trust 2002-3, Option One Owner Trust 2003-4, Option One Owner Trust 2003-5, Option One Owner Trust 2005-6, Option One Owner Trust 2005-7, Option One Owner Trust 2005-8 and/or Option One Owner Trust 2005-9, each a Delaware statutory trust that previously acquired mortgage loans directly or indirectly from the depositor.We refer you to “The Sellers” in this prospectus supplement for additional information.

Trustee and Custodian

Wells Fargo Bank, N.A., a national banking association. We refer you to “The Trustee” in this prospectus supplement for additional information.

NIMS Insurer

One or more insurance companies (together, the “NIMS Insurer”) may issue a financial guaranty insurance policy covering certain payments to be made on net interest margin securities to be issued by a separate trust and secured by all or a portion of the Class C Certificates and the Class P Certificates. In such event, the NIMS Insurer will be able to exercise rights which could adversely impact the certificateholders.

We refer you to “Risk Factors—Rights of NIMS Insurer” in this prospectus supplement for additional information.

PMI Insurer

Mortgage Guaranty Insurance Corporation, a Wisconsin stock insurance corporation. We refer you to “Description of the Certificates—The Mortgage Insurance Policy” in this prospectus supplement for additional information.

Designations

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

·   Offered Certificates

Class A Certificates and Mezzanine Certificates (other than the Class M-10 Certificates and the Class M-11 Certificates).

·   Non-Offered Certificates

Class M-10 Certificates, Class M-11 Certificates, Class C Certificates, Class P Certificates, Class R Certificates and Class R-X Certificates.

·   Group I Certificates

Class I-A-1 Certificates. Except under the circumstances described under “Description of the Certificates—Allocation of Available Funds,” the Group I Certificates receive their distributions from Loan Group I. The Group I Certificates are sometimes referred to as Certificate Group I.

·   Group II Certificates

Class II-A-1 Certificates, Class II-A-2 Certificates, Class II-A-3 Certificates and Class II-A-4 Certificates. Except under the circumstances described under “Description of the Certificates—Allocation of Available Funds”, the Group II Certificates receive their distributions from Loan Group II. The Group II Certificates are sometimes collectively referred to as Certificate Group II.

·   Class A Certificates

Class I-A-1 Certificates, Class II-A-1 Certificates, Class II-A-2 Certificates, Class II-A-3 Certificates and Class II-A-4 Certificates.

·   Mezzanine Certificates

Class M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10 Certificates and Class M-11 Certificates.

·   Subordinate Certificates

Mezzanine Certificates and Class C Certificates.

·   Residual Certificates

Class R Certificates and Class R-X Certificates.

Mortgage Loans

On the Closing Date the trust will acquire a pool of first and second lien fixed-rate and adjustable-rate mortgage loans that will be divided into two loan groups, Loan Group I and Loan Group II (each, a “Loan Group”). Loan Group I will consist of fixed-rate and adjustable-rate mortgage loans with principal balances that conform to Fannie Mae and Freddie Mac principal balance guidelines and Loan Group II will consist of fixed-rate and adjustable-rate mortgage loans with principal balances that may or may not conform to Fannie Mae or Freddie Mac principal balance guidelines.

Loan Group I will consist of approximately 2,680 initial fixed-rate and adjustable-rate mortgage loans having an aggregate outstanding principal balance as of the Cut-off Date of approximately $463,373,714 (the “Initial Group I Mortgage Loans”), additional fixed-rate and adjustable-rate mortgage loans that have principal balances that conform to Fannie Mae and Freddie Mac loan limits at origination included in Loan Group I on the Closing Date (the “Additional Group I Mortgage Loans ”) and any subsequent fixed-rate and adjustable-rate mortgage loans that have principal balances that conform to Fannie Mae and Freddie Mac loan limits at origination included in Loan Group I after the Closing Date (the “Subsequent Group I Mortgage Loans”; and together with the Initial Group I Mortgage Loans and the Additional Group I Mortgage Loans, the “Group I Mortgage Loans”).

Loan Group II will consist of approximately 2,395 initial fixed-rate and adjustable-rate mortgage loans having an aggregate outstanding principal balance as of the Cut-off Date of approximately $536,626,311 (the “Initial Group II Mortgage Loans”), additional first and second lien, fixed-rate and adjustable-rate mortgage loans that have principal balances that may or may not conform to Fannie Mae or Freddie Mac loan limits at origination included in Loan Group II on the Closing Date (the “Additional Group II Mortgage Loans”; together with the Additional Group I Mortgage Loans, the “Additional Mortgage Loans”; and together with the Initial Mortgage Loans, the “Closing Date Mortgage Loans”) and any subsequent first and second lien, fixed-rate and adjustable-rate mortgage loans that have principal balances that may or may not conform to Fannie Mae or Freddie Mac loan limits at origination included in Loan Group II after the Closing Date (the “Subsequent Group II Mortgage Loans”; together with the Initial Group II Mortgage Loans and the Additional Group II Mortgage Loans, the “Group II Mortgage Loans”; and together with the Group I Mortgage Loans, the “Mortgage Loans”).

The aggregate principal balance of the Closing Date Mortgage Loans is expected to equal approximately $1,100,000,000. (the “Closing Date Mortgage Loans”).

The statistical information in this prospectus supplement reflects the characteristics of the Initial Mortgage Loans included in the mortgage pool as of the Cut-off Date. After the date of this prospectus supplement and on or prior to the Closing Date, Additional Mortgage Loans may be added to the Mortgage Pool and some Initial Mortgage Loans may be removed from the mortgage pool, as described under “The Mortgage Pool” in this prospectus supplement. The statistical information as of the Closing Date for the actual pool of Closing Date Mortgage Loans may therefore vary somewhat from the statistical information for the Initial Mortgage Loans presented in this prospectus supplement. Any statistic presented on a weighted average basis or any statistic based on the aggregate principal balance of the mortgage loans is subject to a variance of plus or minus 5%.

The Initial Group I Mortgage Loans have the following characteristics (with all figures being approximate and all percentages and weighted averages being based on scheduled principal balances as of the Cut-off Date):

Mortgage Loans with Prepayment Charges:	70.02%
Fixed-Rate Mortgage Loans:	1.10%
60 Month Interest Only Mortgage Loans:	2.96%
Second lien Mortgage Loans:	1.10%
Range of Remaining Term to Stated Maturities:	175 - 360 months
Weighted Average Remaining Term to Stated Maturity:	358 months
Range of Original Principal Balances:	$15,052 - $733,500
Average Original Principal Balance:	$173,037
Range of Outstanding Principal Balances:	$15,032 - $732,882
Average Outstanding Principal Balance:	$172,901
Range of Current Mortgage Rates:	5.700% - 12.950%
Weighted Average Current Mortgage Rate:	8.891%
Weighted Average Gross Margin of the Adjustable-Rate Mortgage Loans:	6.177%
Weighted Average Maximum Mortgage Rate of the Adjustable-Rate Mortgage Loans:	14.843%
Weighted Average Minimum Mortgage Rate of the Adjustable-Rate Mortgage Loans:	8.860%
Weighted Average Initial Periodic Rate Adjustment Cap of the Adjustable-Rate Mortgage Loans:	2.987%
Weighted Average Subsequent Periodic Rate Adjustment Cap of the Adjustable-Rate Mortgage Loans:	1.001%
Weighted Average Time Until Next Adjustment Date of the Adjustable-Rate Mortgage Loans:	25 months
Balloon Loans:	40.10%
Geographic Concentrations in Excess of 5%:
California Florida New York Massachusetts Texas	13.51% 12.75% 7.75% 7.18% 6.62%

The Initial Group II Mortgage Loans have the following characteristics (with all figures being approximate and all percentages and weighted averages being based on scheduled principal balances as of the Cut-off Date):

Mortgage Loans with Prepayment Charges:	74.05%
Fixed-Rate Mortgage Loans:	6.51%
60 Month Interest Only Mortgage Loans:	18.17%
Second lien Mortgage Loans:	6.54%
Range of Remaining Term to Stated Maturities:	179 - 360 months
Weighted Average Remaining Term to Stated Maturity:	358 months
Range of Original Principal Balances:	$15,040 - $2,171,000
Average Original Principal Balance:	$224,224
Range of Outstanding Principal Balances:	$15,020 - $2,166,816
Average Outstanding Principal Balance:	$224,061
Range of Current Mortgage Rates:	5.700% - 14.850%
Weighted Average Current Mortgage Rate:	8.643%
Weighted Average Gross Margin of the Adjustable-Rate Mortgage Loans:	6.122%
Weighted Average Maximum Mortgage Rate of the Adjustable-Rate Mortgage Loans:	14.372%
Weighted Average Minimum Mortgage Rate of the Adjustable-Rate Mortgage Loans:	8.351%
Weighted Average Initial Periodic Rate Adjustment Cap of the Adjustable-Rate Mortgage Loans:	2.979%
Weighted Average Subsequent Periodic Rate Adjustment Cap of the Adjustable-Rate Mortgage Loans:	1.001%
Weighted Average Time Until Next Adjustment Date of the Adjustable-Rate Mortgage Loans:	25 months
Balloon Loans:	36.12%
Geographic Concentrations in Excess of 5%:
California Florida Texas New York Massachusetts	31.51% 9.48% 8.97% 8.36% 5.64%

Distribution Dates

The Trustee will make distributions on the certificates on the 25^th day of each calendar month beginning in November 2006 (each, a “Distribution Date”) (i) to the holder of record of the certificates as of the business day preceding such date of distribution, in the case of the Class A and Mezzanine Certificates if held in book-entry form, or (ii) to the holder of record of the certificates as of the last business day of the month immediately preceding the month in which the distribution occurs, in the case of the Class A and Mezzanine Certificates if held in registered, certificated form. If the 25^th day of a month is not a business day, then the distribution will be made on the next business day.

Final Scheduled Distribution Date

The final scheduled Distribution Date for the Class A and Mezzanine Certificates will be the Distribution Date in February 2037. The final scheduled Distribution Date for the Class A and Mezzanine Certificates is one month following the maturity date for the latest maturing Mortgage Loan. The actual final Distribution Date for the Class A Certificates and Mezzanine Certificates may be earlier or later, and could be substantially earlier, than the final scheduled Distribution Date.

Distributions on the Certificates

Interest Distributions

The pass-through rates for the Class A and Mezzanine Certificates will be calculated at the per annum rate of one-month LIBOR plus the related percentage as set forth below, subject to the limitations set forth in this prospectus supplement.

Class	(1)	(2)
I-A-1	0.140%	0.280%
II-A-1	0.040%	0.080%
II-A-2	0.100%	0.200%
II-A-3	0.140%	0.280%
II-A-4	0.220%	0.440%
M-1	0.230%	0.345%
M-2	0.290%	0.435%
M-3	0.340%	0.510%
M-4	0.400%	0.600%
M-5	0.420%	0.630%
M-6	0.470%	0.705%
M-7	0.850%	1.275%
M-8	1.000%	1.500%
M-9	2.100%	3.150%
M-10	2.500%	3.750%
M-11	2.500%	3.750%

__________

⁽¹⁾For the accrual period for each Distribution Date up to and including the Optional Termination Date, as defined in this prospectus supplement under “The Pooling Agreement—Termination.”

⁽²⁾For each other accrual period.

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

Interest distributable on the certificates accrues during an accrual period. The accrual period for the Class A and Mezzanine Certificates for any Distribution Date is the period from the previous Distribution Date (or, in the case of the first accrual period, from the Closing Date) to the day prior to the current Distribution Date. Interest will be calculated for the Class A and Mezzanine Certificates on the basis of the actual number of days in the accrual period, based on a 360-day year.

The Class A and Mezzanine Certificates will accrue interest on their certificate principal balance outstanding immediately prior to each Distribution Date.

The Class C Certificates will accrue interest as provided in the pooling agreement. The Class P Certificates and the Residual Certificates will not accrue interest.

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

Principal Distributions

Principal will be distributed to holders of the Class A and Mezzanine Certificates on each Distribution Date in the amounts described herein under “Description of the Certificates—Allocation of Available Funds.”

Distribution Priorities

Group I Certificates

In general, on any Distribution Date, funds available for distribution from payments and other amounts received on the Group I Mortgage Loans will be distributed as follows:

Interest Distributions

to distribute interest on the Group I Certificates; and

Principal Distributions

to distribute principal on the Group I Certificates, but only in the amounts and to the extent described herein.

Group II Certificates

In general, on any Distribution Date, funds available for distribution from payments and other amounts received on the Group II Mortgage Loans will be distributed as follows:

Interest Distributions

to distribute interest on the Group II Certificates, on a pro rata basis based on the entitlement of each such class; and

Principal Distributions

to distribute principal on the Group II Certificates, but only in the amounts and to the extent described herein.

Mezzanine Certificates

In general, on any Distribution Date, funds available for distribution from payments and other amounts received on the Group I Mortgage Loans and the Group II Mortgage Loans, after the distributions on the Group I and Group II Certificates described above will be distributed as follows:

Interest Distributions

to distribute interest on the Mezzanine Certificates, but only in the order of priority, amounts and to the extent described herein; and

Principal Distributions

to distribute principal on the Mezzanine Certificates, but only in the order of priority, amounts and to the extent described herein.

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

Limited Crosscollateralization

In certain circumstances, payments on the Group I Mortgage Loans may be used to make certain distributions to the holders of the Group II Certificates and payments on the Group II Mortgage Loans may be used to make certain distributions to the holders of the Group I Certificates.

Trigger Event

The occurrence of a Trigger Event, on or after the Stepdown Date, may have the effect of accelerating or decelerating the amortization of certain classes of Class A and Mezzanine Certificates and affecting the weighted average lives of such certificates. The Stepdown Date is the earlier to occur of (1) the first Distribution Date after the Distribution Date on which the aggregate certificate principal balance of the Class A Certificates has been reduced to zero and (2) the later of (x) the Distribution Date occurring in November 2009 and (y) the first Distribution Date on which the subordination available to the Class A Certificates has doubled. A Trigger Event will be met if delinquencies or losses on the mortgage loans exceed the levels set forth in the definition thereof.

We refer you to “Description of the Certificates—Allocation of Available Funds” and “—Definitions” in this prospectus supplement for additional information.

Fees and Expenses

Before distributions are made on the certificates, the following fees and expenses will be payable: (i) the Servicer will be paid a monthly fee equal to one-twelfth of 0.30% multiplied by the aggregate principal balance of the Mortgage Loans as of the first day of the related due periodfor the first 10 due periods, 0.40% multiplied by the aggregate principal balance of the Mortgage Loans as of the first day of the related due period for the 11th through the 30th due periods and 0.65% multiplied by the aggregate principal balance of the Mortgage Loans as of the first day of the related due period for all due periods thereafter, (ii) the Trustee will be paid a monthly fee equal to one-twelfth of 0.0030% multiplied by the aggregate principal balance of the Mortgage Loans as of the first day of the related due period and (iii) the PMI Insurer will be paid a monthly fee equal to one-twelfth of 1.00% multiplied by the aggregate principal balance of the PMI Mortgage Loans (as defined herein) as of the first day of the related due period. The servicing fee will be payable from amounts on deposit in the collection account and the trustee fee and the PMI Insurer Fee will be payable from amounts on deposit in the distribution account.

The Swap Provider is generally entitled to a monthly payment calculated as one-twelfth of the Strike Rate on the Swap Notional Amount (as defined herein) for such Distribution Date multiplied by 250. The trust is entitled to an amount equal to one-month LIBOR (as set forth in the Interest Rate Swap Agreement and calculated on an actual/360 basis) on the Swap Notional Amount for such Distribution Date multiplied by 250. Only the positive net payment of the two obligations will be paid by the applicable party. If a net payment is owed to the Swap Provider, the Trustee shall pay such amount from the distribution account before distributions are made on the Certificates.

Advances

The Servicer will make cash advances to cover delinquent payments of principal and interest to the extent it reasonably believes that the cash advances are recoverable from future payments or recoveries on the Mortgage Loans. Advances are intended to maintain a regular flow of scheduled interest and principal distributions on the certificates and are not intended to guarantee or insure against losses.

We refer you to “The Pooling Agreement—Advances” in this prospectus supplement and “Description of the Certificates—Advances” in the prospectus for additional information.

Interest Coverage Accounts

On the Closing Date, the Depositor may pay to the Trustee for deposit in one or more interest coverage accounts, amounts specified in the pooling agreement. Funds on deposit in the interest coverage accounts, if any, will be applied by the Trustee to cover shortfalls in the amount of interest generated by the Mortgage Loans.

We refer you to “Description of the Certificates —Interest Coverage Account” in this prospectus supplement for additional information.

Pre-Funding Accounts

On or before January 23, 2007, the Depositor may sell and the Trustee will be obligated to purchase, on behalf of the trust, Subsequent Group I Mortgage Loans and Subsequent Group II Mortgage Loans to be included in the mortgage pool.

On the Closing Date, the Depositor will pay to the Trustee (i) an amount equal to approximately $185,349,481, which will be held by the Trustee in a pre-funding account (the “Group I Pre-Funding Account”) and (ii) an amount equal to approximately $214,650,519, which will be held by the Trustee in a pre-funding account (the “Group II Pre-Funding Account”; together with the Group I Pre-Funding Account, the “Pre-Funding Accounts”). The amount on deposit in the Pre-Funding Accounts will be reduced by the amount thereof used to purchase Subsequent Mortgage Loans for the related Loan Group during the period from the Closing Date up to and including January 23, 2007. Any amounts remaining in the Pre-Funding Accounts after January 23, 2007 will be distributed as principal on the next Distribution Date to the holders of the related Class A Certificates.

We refer you to “The Mortgage Pool—Conveyance of Additional Mortgage Loans and Subsequent Mortgage Loans and the Pre-Funding Accounts” and “Description of the Certificates—Mandatory Principal Distributions on Class A Certificates” in this prospectus supplement for additional information.

Optional Termination

The Servicer may purchase all of the Mortgage Loans and any REO Properties in both Loan Groups and retire the certificates when the current principal balance of the Mortgage Loans in both Loan Groups, in the aggregate, is equal to or less than 10% of the sum of the aggregate principal balance of the Closing Date Mortgage Loans as of the Cut-off Date and the aggregate amount on deposit in the Pre-Funding Accounts on the Closing Date. If the Servicer elects not to exercise its option, the NIMS Insurer may exercise that option.

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

Repurchase or Substitution of Mortgage Loans For Breaches of Representations and Warranties

The sponsor and Option One Mortgage Capital Corporation will make certain representations and warranties with respect to each mortgage loan as of the closing date. Upon discovery of a breach of such representations and warranties that materially and adversely affects the interests of the certificateholders, either Option One Mortgage Capital Corporation or the sponsor will be obligated to cure such breach, or otherwise repurchase or replace such mortgage loan.

We refer you to “The Pooling Agreement—Assignment of the Mortgage Loans” in this prospectus supplement for additional information.

Credit Enhancement

1. Subordination

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

The rights of the holders of Mezzanine Certificates with higher numerical class designations to receive distributions will be subordinated to the rights of the holders of the Mezzanine Certificates with lower numerical class designations. The rights of the holders of the Class C Certificates to receive distributions will be subordinated to the rights of the holders of the Mezzanine Certificates, in each case to the extent described in this prospectus supplement.

Subordination is intended to enhance the likelihood of regular distributions on the more senior certificates in respect of interest and principal and to afford such certificates protection against realized losses on the Mortgage Loans.

We refer you to “Description of the Certificates —Credit Enhancement” in this prospectus supplement for additional information.

2. Excess Interest

The Mortgage Loans bear interest each month that in the aggregate is expected to exceed the amount needed to distribute monthly interest on the Class A and Mezzanine Certificates and to pay certain fees and expenses of the trust (including any Net Swap Payment owed to the Swap Provider and any Swap Termination Payment owed to the Swap Provider, other than any Swap Termination Payment resulting from a Swap Provider Trigger Event). The excess interest from the Mortgage Loans each month will be available to absorb realized losses on the Mortgage Loans and to maintain overcollateralization at required levels as described in the pooling agreement.

We refer you to “Description of the Certificates —Allocation of Available Funds” and “—Overcollateralization Provisions” in this prospectus supplement for additional information.

3. Overcollateralization

As of the Closing Date, the sum of the aggregate principal balance of the Closing Date Mortgage Loans as of the Cut-off Date and the original pre-funded amounts will exceed the aggregate certificate principal balance of the Class A, Mezzanine and Class P Certificates on the Closing Date by approximately $9,749,900, which is equal to the initial certificate principal balance of the Class C Certificates. Such amount represents approximately 0.65% of the sum of the aggregate principal balance of the Closing Date Mortgage Loans as of the Cut-off Date and the original pre-funded amounts, and is the initial amount of overcollateralization required to be provided under the pooling agreement. We cannot assure you that sufficient interest will be generated by the Mortgage Loans to maintain the required level of overcollateralization.

We refer you to “Description of the Certificates—Overcollateralization Provisions” in this prospectus supplement for additional information.

4. Primary Mortgage Insurance

Approximately 16.89% of the Initial Group I Mortgage Loans and approximately 10.98% of the Initial Group II Mortgage Loans (in each case, by aggregate principal balance of the related Loan Group as of the Cut-off Date), will be covered by a primary mortgage insurance policy issued by the PMI Insurer. However, such policy will provide only limited protection against losses on defaulted Mortgage Loans covered by the policy.

We refer you to “Description of the Certificates—The Mortgage Insurance Policy” in this prospectus supplement for additional information.

5. Allocation of Losses

If, on any Distribution Date, there is not sufficient excess interest or overcollateralization to absorb realized losses on the Mortgage Loans as described under “Description of the Certificates— Overcollateralization Provisions,” then realized losses on the Mortgage Loans will be allocated to reduce the certificate principal balance of each class of Mezzanine Certificates, in reverse numerical order until the certificate principal balance of each such class has been reduced to zero. The pooling agreement does not permit the allocation of realized losses on the Mortgage Loans to the Class A Certificates or the Class P Certificates; however investors in the Class A Certificates should realize that under certain loss scenarios there may not be enough interest and principal on the Mortgage Loans to distribute to the Class A Certificates all interest and principal amounts to which such certificates are then entitled.

Once realized losses are allocated to the Mezzanine Certificates such realized losses will not be reinstated thereafter (except to the extent of Subsequent Recoveries) and will not bear interest. However, the amount of any realized losses allocated to the Mezzanine Certificates may be distributed to the holders of those certificates according to the priorities set forth under “Description of the Certificates—Overcollateralization Provisions” and “Description of the Certificates—Interest Rate Swap Agreement, the Swap Provider and the Supplemental Interest Trust” in this prospectus supplement.

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

Interest Rate Swap Agreement

Wells Fargo Bank, N.A., as supplemental interest trust trustee (the “Supplemental Interest Trust Trustee”), will enter into an interest rate swap agreement (the “Interest Rate Swap Agreement”), with a swap provider. The Supplemental Interest Trust Trustee will appoint Wells Fargo Bank, N.A. as swap administrator (the “Swap Administrator”) pursuant to the swap administration agreement to receive and distribute funds with regard to the Interest Rate Swap Agreement on behalf of the supplemental interest trust, whether payable by or to the swap provider pursuant to the Interest Rate Swap Agreement. On or before each Distribution Date commencing with the Distribution Date in December 2006 and ending with the Distribution Date in August 2012, the Supplemental Interest Trust Trustee will be obligated to make a fixed payment to the swap provider, and the swap provider will be obligated to make a floating payment to the Supplemental Interest Trust Trustee, in each case as set forth in the Interest Rate Swap Agreement and as described in this prospectus supplement. To the extent that the fixed payment exceeds the floating payment in respect of any Distribution Date, amounts otherwise available to the certificateholders will be applied to make a net payment to the Swap Administrator for payment to the swap provider. To the extent that the floating payment exceeds the fixed payment in respect of any Distribution Date, the swap provider will make a net swap payment to the Swap Administrator, from which the Swap Administrator, pursuant to the swap administration agreement, will remit certain amounts to the trust for distribution to holders of the Class A and Mezzanine Certificatesas described in this prospectus supplement.

Upon early termination of the Interest Rate Swap Agreement, the Supplemental Interest Trust Trustee or the swap provider may be liable to make a swap termination payment to the other party, regardless of which party has caused the termination. The swap termination payment will be computed in accordance with the procedures set forth in the Interest Rate Swap Agreement. In the event that the Swap Administrator is required to make a swap termination payment to the swap provider, the trust will be required to make a payment to the Swap Administrator in the same amount (to the extent not paid by the Swap Administrator from any upfront payment received pursuant to any replacement interest rate swap agreement that may be entered into by the Supplemental Interest Trust Trustee). Such amount generally will be paid by the trust on the related Distribution Date and on any subsequent Distribution Dates until paid in full, prior to any distribution to the holders of the Class A and Mezzanine Certificates. In the case of swap termination payments resulting from an event of default or certain termination events with respect to the swap provider as described in this prospectus supplement, however, the trust’s payment to the Swap Administrator will be subordinated to all distributions to the holders of the Class A and Mezzanine Certificates.

Except as described in the preceding sentence, amounts payable by the trust will be deducted from available funds before distributions to certificateholders.

We refer you to “Description of the Certificates—Interest Rate Swap Agreement, the Swap Provider and the Supplemental Interest Trust” in this prospectus supplement.

Ratings

It is a condition of the issuance of the Offered Certificates that they be assigned the following ratings by Moody's Investors Service, Inc. (“Moody’s”) and Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“S&P”):

	Moody's	S&P
I-A-1	Aaa	AAA
II-A-1	Aaa	AAA
II-A-2	Aaa	AAA
II-A-3	Aaa	AAA
II-A-4	Aaa	AAA
M-1	Aa1	AA+
M-2	Aa2	AA
M-3	Aa3	AA-
M-4	A1	A+
M-5	A2	A
M-6	A3	A-
M-7	Baa1	BBB+
M-8	Baa1	BBB
M-9	Baa2	BBB-

A security rating is not a recommendation to buy, sell or hold securities. These ratings may be lowered or withdrawn at any time by any of the rating agencies.

We refer you to “Ratings” in this prospectus supplement and “Rating” in the prospectus for additional information.

Tax Status

One or more elections will be made to treat designated portions of the trust (exclusive of the Interest Rate Swap Agreement, the Swap Account, the Supplemental Interest Trust, the Interest Coverage Accounts, the Pre-funding Accounts, if any, the Net WAC Rate Carryover Reserve Account, any subsequent mortgage loan interest and any Servicer prepayment charge payment amounts, as described more fully herein or in the pooling agreement) as real estate mortgage investment conduits for federal income tax purposes.

We refer you to “Federal Income Tax Consequences” in this prospectus supplement and in the prospectus for additional information.

Considerations for Benefit Plan Investors

After the expiration of the Funding Period, it is expected that the Class A and Mezzanine Certificates (other than the Class M-10 and Class M-11 Certificates) may be purchased by a pension or other employee 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, so long as certain conditions are met. Prior to the termination of the Supplemental Interest Trust, plans or persons using assets of a plan may purchase the Class A and Mezzanine Certificates (other than the Class M-10 and Class M-11 Certificates) if the purchase and holding of such certificates meets the requirements of an investor-based class exemption issued by the Department of Labor. No plan or person using assets of a plan may purchase any Certificates until after expiration of the Funding Period. A fiduciary of an employee benefit plan must determine that the purchase of a certificate is consistent with its fiduciary duties under applicable law and does not result in a prohibited transaction under applicable law.

We refer you to “Considerations for Benefit Plan Investors” in this prospectus supplement and in the prospectus for additional information.

Legal Investment

The Class A and Mezzanine Certificates will not be “mortgage related securities” for purposes of the Secondary Mortgage Market Enhancement Act of 1984 (“SMMEA”).

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

RISK FACTORS

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the Class A and Mezzanine Certificates. You should also carefully consider the information set forth under “Risk Factors” in the prospectus.

Unpredictability of Prepayments and Effect on Yields

Mortgagors may prepay their Mortgage Loans in whole or in part at any time. We cannot predict the rate at which mortgagors will repay their Mortgage Loans. A prepayment of a Mortgage Loan generally will result in a prepayment on the certificates.

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

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

·   The rate of prepayments on the Mortgage Loans will be sensitive to prevailing interest rates. Generally, if prevailing interest rates decline significantly below the mortgage rates on the fixed-rate Mortgage Loans, those Mortgage Loans are more likely to prepay than if prevailing rates remain above the mortgage rates on those Mortgage Loans. In addition, if interest rates decline, adjustable-rate mortgage loan prepayments may increase due to the availability of fixed-rate mortgage loans or other adjustable-rate mortgage loans at lower interest rates. Conversely, if prevailing interest rates rise significantly, the prepayments on fixed-rate and adjustable-rate mortgage loans may decrease. Furthermore, adjustable-rate mortgage loans may prepay at different rates and in response to different factors than fixed-rate mortgage loans; the inclusion of both types of mortgage loans in the mortgage pool may increase the difficulty in analyzing possible prepayment rates.

·   Approximately 70.02% of the Initial Group I Mortgage Loans and approximately 74.05% of the Initial Group II Mortgage Loans (in each case, by aggregate principal balance of the related Loan Group as of the Cut-off Date) require the mortgagor to pay a charge in certain instances if the mortgagor prepays the Mortgage Loan during a stated period, which may be from one year to three years after the Mortgage Loan was originated. A prepayment charge may or may not discourage a mortgagor from prepaying the Mortgage Loan during the applicable period.

·   Either Option One Mortgage Capital Corporation or the Sponsor may be required to repurchase Mortgage Loans from the trust in the event certain breaches of representations and warranties occur and have not been cured. In addition, the NIMS Insurer, if any, or the Servicer, may purchase or repurchase Mortgage Loans that become 90 days or more delinquent, subject to certain limitations and conditions described in this prospectus supplement and the pooling agreement. In addition, the Servicer may agree to exercise such option as directed by a third party which would benefit from the removal of such delinquent mortgage loans. Investors should note that the removal of any delinquent mortgage loan by the Servicer from the trust may affect the loss and delinquency tests which determine the level of the overcollateralization target amount. The reduction in an overcollateralization target amount in such a fashion may adversely affect the ratings and/or the market value of the Class A and Mezzanine Certificates. Any such third party will not have any obligation to take into account the consequences to investors. These purchases will have the same effect on the holders of the Class A and Mezzanine Certificates as a prepayment of those Mortgage Loans.

·   The Servicer (or if the Servicer elects not to exercise its option, the NIMS Insurer, if any) may purchase all of the Mortgage Loans when the aggregate principal balance of the Mortgage Loans in both Loan Groups is equal to or less than 10% of the sum of the aggregate principal balance of the Closing Date Mortgage Loans in both Loan Groups as of the Cut-off Date and amounts on deposit in the Pre-Funding Accounts on the Closing Date.

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

·   As a result of the absorption of realized losses on the Mortgage Loans by excess interest and overcollateralization and amounts received under the Interest Rate Swap Agreement, each as described herein and the availability of the PMI Policy (which will provide limited coverage on some of the Mortgage Loans), liquidations of defaulted Mortgage Loans, whether or not realized losses are allocated to the Mezzanine Certificates upon such liquidations, will result in an earlier return of principal to the Class A and Mezzanine Certificates and will influence the yields on such certificates in a manner similar to the manner in which principal prepayments on the Mortgage Loans will influence the yields on those certificates.

·   The overcollateralization provisions are intended to result in an accelerated rate of principal distributions to holders of the Class A and Mezzanine Certificates then entitled to principal distributions at any time that the overcollateralization provided by the mortgage pool falls below the required level. In addition, if the Group I and Group II Certificates are entitled to distributions of principal at any time that overcollateralization is required to be restored to the required level, then the amounts available for such purpose will be allocated between the Group I Certificates and the Group II Certificates on a pro rata basis based on the amount of principal actually received on the Mortgage Loans in the related Loan Group for the related Distribution Date. This, as well as the relative sizes of the Loan Groups, may magnify the prepayment effect on a Certificate Group caused by the relative rates of prepayments and defaults experienced by the Loan Groups.

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

Rights of the NIMS Insurer

Pursuant to the terms of the pooling agreement, unless there exists a continuance of any failure by the NIMS Insurer, if any, to make a required payment under the policy insuring the net interest margin securities (such event, a “NIMS Insurer Default”), such NIMS Insurer will be entitled to exercise, among others, the following rights of the holders of the Class A and Mezzanine Certificates, without the consent of such holders, and the holders of the Class A and Mezzanine Certificates may exercise such rights only with the prior written consent of such NIMS Insurer: (i) the right to provide notices of Servicer defaults and the right to direct the Trustee to terminate the rights and obligations of the Servicer under the pooling agreement in the event of a default by the Servicer; (ii) the right to remove the Trustee or any co-trustee or custodian pursuant to the pooling agreement; and (iii) the right to direct the Trustee to make investigations and take actions pursuant to the pooling agreement. In addition, unless a NIMS Insurer Default exists, such NIMS Insurer’s consent will be required prior to, among other things, (i) the removal or replacement of the Servicer, any successor servicer or the Trustee, (ii) the appointment or termination of any subservicer or co-trustee or (iii) any amendment to the pooling agreement.

Investors in the Class A and Mezzanine Certificates should note that:

·   any insurance policy issued by the NIMS Insurer, if any, will not cover, and will not benefit in any manner whatsoever, the Class A and Mezzanine Certificates;

·   the rights to be granted to the NIMS Insurer, if any, are extensive;

·   the interests of the NIMS Insurer, if any, may be inconsistent with, and adverse to the interests of the holders of the Class A and Mezzanine Certificates and the NIMS Insurer, if any, has no obligation or duty to consider the interests of the Class A and Mezzanine Certificates in connection with the exercise or nonexercise of such NIMS Insurer’s rights;

·   such NIMS Insurer’s exercise of the rights and consents set forth above may negatively affect the Class A and Mezzanine Certificates and the existence of such NIMS Insurer’s rights, whether or not exercised, may adversely affect the liquidity of the Class A and Mezzanine Certificates relative to other asset-backed certificates backed by comparable mortgage loans and with comparable payment priorities and ratings; and

·   there may be more than one series of notes insured by the NIMS Insurer and the NIMS Insurer will have the rights set forth herein so long as any such series of notes remain outstanding.

Conflicts of Interest between the Servicer and the Trust

The Servicer will initially, directly or indirectly, own all or a portion of the Class C Certificates, the Class P Certificates and the Residual Certificates. The timing of mortgage loan foreclosures and sales of the related mortgaged properties may affect the weighted average lives and yields of the Class A and Mezzanine Certificates.

Investors should consider that the timing of such foreclosures or sales may not be in the best interests of all certificateholders and that no formal policies or guidelines have been established to resolve or minimize such a conflict of interest.

Terrorist Attacks and Military Action Could Adversely Affect the Yield on the Certificates

The terrorist attacks in the United States on September 11, 2001 suggest that there is an increased likelihood of future terrorist activity in the United States. In addition, current political and military tensions in the Middle East have resulted in a significant deployment of United States military personnel in the region. Investors should consider the possible effects of past and possible future terrorist attacks and any resulting military response by the United States on the delinquency, default and prepayment experience of the Mortgage Loans. In accordance with the servicing standard set forth in the pooling agreement, the Servicer may defer, reduce or forgive payments and delay foreclosure proceedings in respect of Mortgage Loans to borrowers affected in some way by past and possible future events.

In addition, the current deployment of United States military personnel in the Middle East and the activation of a substantial number of United States military reservists and members of the National Guard may significantly increase the proportion of Mortgage Loans whose mortgage rates are reduced by the application of the Servicemembers Civil Relief Act (the “Relief Act”). See “Certain Legal Aspects of Mortgage Loans— Servicemembers Civil Relief Act” in the prospectus. Certain shortfalls in interest collection arising from the application of the Relief Act or any state law providing for similar relief will not be covered by the servicer or any subservicer.

Delinquency Status of the Mortgage Loans

None of the Initial Group I Mortgage Loans and none of the Initial Group II Mortgage Loans (by aggregate principal balance of the Initial Group II Mortgage Loans as of the Cut-off Date) are 30-59 days delinquent as of September 30, 2006. However, with respect to approximately 78.55% of the Initial Group I Mortgage Loans and approximately 74.39% of the Initial Group II Mortgage Loans (in each case, by aggregate principal balance of the related Loan Group as of the cut-off date), the first payment on the Mortgage Loans is due on or after September 1, 2006 and such Mortgage Loans could not have been 30-59 days delinquent as of September 30, 2006. A mortgage loan is considered to be delinquent when a payment due on any due date remains unpaid as of the close of business on the next scheduled due date. As of the result of the inclusion of delinquent mortgage loans, the mortgage pool may bear more risk than a pool of mortgage loans without any delinquencies but with otherwise comparable characteristics. It is possible that a delinquent mortgage loan will not ever become current or if it does become current, that the mortgagor may become delinquent again. Investors should also note that certain of the Mortgage Loans will have a first payment date occurring after the Cut-off Date and, therefore, such Mortgage Loans could not have been delinquent in any monthly payment as of the Cut-off Date.

Investors should also see the tables titled “Historical Delinquency of the Mortgage Loans”, “Historical Delinquency of the Initial Group I Mortgage Loans” and “Historical Delinquency of the Initial Group II Mortgage Loans.”

Second Lien Loan Risk

Approximately 1.10% of the Initial Group I Mortgage Loans and approximately 6.54% of the Initial Group II Mortgage Loans (in each case, by aggregate principal balance of the related Loan Group as of the Cut-off Date) are secured by second liens on the related mortgaged properties. The proceeds from any liquidation, insurance or condemnation proceedings will be available to satisfy the outstanding balance of such Mortgage Loans only to the extent that the claims of the related senior mortgages have been satisfied in full, including any related foreclosure costs. In circumstances when it has been determined to be uneconomical to foreclose on the mortgaged property, the Servicer may write off the entire balance of such Mortgage Loan as a bad debt. The foregoing considerations will be particularly applicable to Mortgage Loans secured by second liens that have high combined original loan-to-value ratios because it is comparatively more likely that the Servicer would determine foreclosure to be uneconomical in the case of such Mortgage Loans. The rate of default of second Mortgage Loans may be greater than that of Mortgage Loans secured by first liens on comparable properties. See “Risk Factors” in the prospectus.

Interest Only Mortgage Loans

Approximately 2.96% of the Initial Group I Mortgage Loans and approximately 18.17% of the Initial Group II Mortgage Loans (in each case, by aggregate principal balance of the related Loan Group as of the Cut-off Date), require the borrowers to make monthly payments only of accrued interest for the first 60 months following origination. After such interest-only period, the borrower’s monthly payment will be recalculated to cover both interest and principal so that the Mortgage Loan will amortize fully prior to its final payment date. Interest only loans are relatively new to the non-prime mortgage sector. As a result, the long-term performance characteristics of these loans are largely unknown. If the monthly payment increases, the related borrower may not be able to pay the increased amount and may default or may refinance the related Mortgage Loan to avoid the higher payment. Because no principal payments may be made on such Mortgage Loans for 60 months following origination, the certificateholders will receive smaller principal distributions during such period than they would have received if the related borrowers were required to make monthly payments of interest and principal for the entire lives of such Mortgage Loans. This slower rate of principal distributions may reduce the return on an investment in the Class A and Mezzanine Certificates that are purchased at a discount. Investors should consider the fact that interest-only mortgage loans reduce the monthly payment required by borrowers during the interest-only period and consequently the monthly housing expense used to qualify borrowers. As a result, the interest-only mortgage loans may allow some borrowers to qualify for a mortgage loan who would not otherwise qualify for a fully amortizing mortgage loan or may allow them to qualify for a larger mortgage loan than otherwise would be the case.

Credit Scores May Not Accurately Predict the Performance of the Mortgage Loans

Credit scores are obtained by many lenders in connection with mortgage loan applications to help them assess a borrower’s creditworthiness. Credit scores are generated by models developed by a third party which analyzed data on consumers in order to establish patterns which are believed to be indicative of the borrower’s probability of default over a two-year period. The credit score is based on a borrower’s historical credit data, including, among other things, payment history, delinquencies on accounts, levels of outstanding indebtedness, length of credit history, types of credit, and bankruptcy experience. Credit scores range from approximately 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 score purports only to be a measurement of the relative degree of risk a borrower represents to a lender (i.e., a borrower with a higher score is statistically expected to be less likely to default in payment than a borrower with a lower score). Lenders have varying ways of analyzing credit scores and, as a result, the analysis of credit scores across the industry is not consistent. In addition, it should be noted that credit scores were developed to indicate a level of default probability over a two year period, which does not correspond to the life of a mortgage loan. Furthermore, credit scores were not developed specifically for use in connection with mortgage loans, but for consumer loans in general, and assess only the borrower’s past credit history. Therefore, a credit score does not take into consideration the effect of mortgage loan characteristics (which may differ from consumer loan characteristics) on the probability of repayment by the borrower. There can be no assurance that the credit scores of the mortgagors will be an accurate predictor of the likelihood of repayment of the related mortgage loans.

Potential Inadequacy of Credit Enhancement for the Class A and Mezzanine Certificates

The credit enhancement features described in this prospectus supplement are intended to enhance the likelihood that holders of the Class A Certificates, and to a limited extent, the holders of the Mezzanine Certificates, will receive regular distributions of interest and principal. However, we cannot assure you that the applicable credit enhancement will adequately cover any shortfalls in cash available to distribute to your certificates as a result of delinquencies or defaults on the Mortgage Loans. If delinquencies or defaults occur on the Mortgage Loans, neither the Servicer nor any other entity will advance scheduled monthly payments of interest and principal on delinquent or defaulted Mortgage Loans if such advances are not likely to be recovered. If substantial losses occur as a result of defaults and delinquent payments on the Mortgage Loans, you may suffer losses.

A decline in real estate values or in economic conditions generally could increase the rates of delinquencies, foreclosures and losses on the Mortgage Loans to a level that is significantly higher than those experienced currently. This in turn will reduce the yield on your certificates, particularly if the credit enhancement described in this prospectus supplement, is not enough to protect your certificates from these losses.

Although loan-level primary mortgage insurance coverage has been acquired on behalf of the trust from the PMI Insurer with respect to approximately 16.89% of the Initial Group I Mortgage Loans and approximately 10.98% of the Initial Group II Mortgage Loans (in each case, by aggregate principal balance of the related Loan Group as of the Cut-off Date), such coverage will provide only limited protection against losses on defaulted Mortgage Loans covered by the policy. Following the addition of the Additional Mortgage Loans and the Subsequent Mortgage Loans, each Loan Group will contain a percentage of Mortgage Loans covered by the PMI Policy as set forth under “The Mortgage Pool—Conveyance of Additional Mortgage Loans, Subsequent Mortgage Loans and the Pre-Funding Accounts.” Unlike a financial guaranty policy, coverage under the mortgage insurance policy is subject to certain limitations and exclusions including, for example, losses resulting from fraud. As a result, coverage may be denied or limited on some Mortgage Loans. In addition, since the amount of coverage depends on the loan-to-value ratio at the inception of the policy, a decline in the value of a mortgaged property will not result in increased coverage, and the trust may still suffer a loss on a covered Mortgage Loan. The PMI Insurer also may affect the timing and conduct of foreclosure proceedings and other servicing decisions regarding defaulted Mortgage Loans covered by the policy.

The PMI Policy will cover accrued interest on the related mortgage loan only to the date a claim is filed and not to the date the claim is paid. A claim is not required to be paid until 60 days after the PMI Insurer receives a fully completed claim. Although the Servicer will be obligated to make advances during that period (to the extent the advances are determined to be recoverable), reimbursement of those advances upon payment of the claim will reduce the amount of the recovery available for distribution to certificateholders. The PMI Policy may be terminated for failure to pay premiums or if the PMI Insurer is no longer qualified under state law to write the insurance provided by the PMI Policy.

Interest Generated by the Mortgage Loans May Be Insufficient to Maintain Overcollateralization

The weighted average of the mortgage rates on the Mortgage Loans (net of certain fees and expenses, including any Net Swap Payment owed to the Swap Provider and any Swap Termination Payment, other than a Swap Termination Payment resulting from a Swap Provider Trigger Event) is expected to be higher than the weighted average of the pass-through rates on the Class A and Mezzanine Certificates. The Mortgage Loans are expected to generate more interest than is needed to distribute interest owed on the Class A and Mezzanine Certificates and to pay certain fees and expenses of the trust (including the Net Swap Payment, if any, or any Swap Termination Payment owed to the Swap Provider other than any Swap Termination Payment resulting from a Swap Provider Trigger Event). Any remaining interest generated by the Mortgage Loans will then be used to absorb losses that occur on the Mortgage Loans. After these financial obligations of the trust are covered, the available excess interest generated by the Mortgage Loans will be used to maintain overcollateralization. We cannot assure you, however, that enough excess interest will be generated to maintain the required level of overcollateralization. The factors described below will affect the amount of excess interest that the Mortgage Loans will generate:

·   Every time a Mortgage Loan is prepaid in full or in part, liquidated or written off, excess interest may be reduced because the Mortgage Loan will no longer be outstanding and generating interest or, in the case of a partial prepayment, will be generating less interest.

·   If the rates of delinquencies, defaults or losses on the Mortgage Loans turn out to be higher than expected, excess interest will be reduced by the amount necessary to compensate for any shortfalls in cash available to make required distributions on the Class A and Mezzanine Certificates.

·   The fixed-rate Mortgage Loans have mortgage rates that are fixed and will not adjust based on any index and the adjustable-rate Mortgage Loans have mortgage rates that adjust based on an index that is different from the index used to determine the pass-through rates on the Class A and Mezzanine Certificates. In addition, the first adjustment of the mortgage rates for approximately 88.79% of the adjustable-rate Initial Group I Mortgage Loans and approximately 91.03% of the adjustable-rate Initial Group II Mortgage Loans (in each case, by aggregate principal balance of the adjustable-rate Initial Mortgage Loans in the related Loan Group as of the Cut-off Date) will occur two years after the date of origination; the first adjustment of the mortgage rates for approximately 3.32% of the adjustable-rate Initial Group I Mortgage Loans and approximately 2.03% of the adjustable-rate Initial Group II Mortgage Loans (in each case, by aggregate principal balance of the adjustable-rate Initial Mortgage Loans in the related Loan Group as of the Cut-off Date) will occur three years after the date of origination; the first adjustment of the mortgage rates for approximately 7.86% of the adjustable-rate Initial Group I Mortgage Loans and approximately 6.91% of the adjustable-rate Initial Group II Mortgage Loans (in each case, by aggregate principal balance of the adjustable-rate Initial Mortgage Loans in the related Loan Group as of the Cut-off Date) will occur five years after the date of origination and the first adjustment of the mortgage rates for approximately 0.02% of the adjustable-rate Initial Group I Mortgage Loans and approximately 0.03% of the adjustable-rate Initial Group II Mortgage Loans (by aggregate principal balance of the adjustable-rate Initial Mortgage Loans in the related Loan Group as of the Cut-off Date) will occur fifteen years after the date of origination. As a result, the pass-through rates on the Class A and Mezzanine Certificates may increase relative to the mortgage rates on the Mortgage Loans, or may remain constant as the mortgage rates on the adjustable-rate Mortgage Loans decline. In either case, this would require that more of the interest generated by the Mortgage Loans be applied to cover interest on the Class A and Mezzanine Certificates.

·   If prepayments, defaults and liquidations occur more rapidly on the Mortgage Loans with relatively higher mortgage rates than on the Mortgage Loans with relatively lower mortgage rates, the amount of excess interest generated by the Mortgage Loans will be less than would otherwise be the case.

Effect of Mortgage Rates on the Pass-Through Rates

The Class A and Mezzanine Certificates accrue interest at pass-through rates based on a one-month LIBOR index plus a specified margin, but such pass-through rates are subject to a limit. The limit on the pass-through rates on the Class A and Mezzanine Certificates is based on the weighted average of the mortgage rates on the Mortgage Loans net of certain fees and expenses of the trust (including the Net Swap Payment, if any, or any Swap Termination Payment owed to the Swap Provider other than a Swap Termination Payment due to a Swap Provider Trigger Event). As a result of the limit on the pass-through rates on the Class A and Mezzanine Certificates, such certificates may accrue less interest than they would accrue if their pass-through rates were based solely on the one-month LIBOR index plus the specified margin.

The adjustable-rate Mortgage Loans have mortgage rates that adjust based on a six-month LIBOR index. The adjustable-rate Mortgage Loans have periodic and maximum limitations on adjustments to their mortgage rates, and will have the first adjustment to their mortgage rates generally two years, three years, five years or fifteen years after the origination thereof. The fixed-rate Mortgage Loans have mortgage rates that will not adjust.

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

·   The pass-through rates for the Class A and Mezzanine Certificates may adjust monthly while the mortgage rates on the adjustable-rate Mortgage Loans adjust less frequently and the mortgage rates on the fixed-rate Mortgage Loans do not adjust. Furthermore, the adjustable-rate Mortgage Loans will have the first adjustment to their mortgage rates generally two years, three years, five years or fifteen years following their origination. Consequently, the limit on the pass-through rates on the Class A and Mezzanine Certificates may prevent any increases in the pass-through rates on such certificates for extended periods in a rising interest rate environment.

·   If prepayments, defaults and liquidations occur more rapidly on the Mortgage Loans with relatively higher mortgage rates than on the Mortgage Loans with relatively lower mortgage rates, the pass-through rates on the Class A and Mezzanine Certificates are more likely to be limited. Furthermore, any reductions of the mortgage rates on the Rate Reduction Mortgage Loans (as defined herein), will cause a reduction of the weighted average of the mortgage rates on the Mortgage Loans and could cause the pass-through rates on the Class A and Mezzanine Certificates to be limited.

·   The index used to determine the mortgage rates on the adjustable-rate Mortgage Loans may respond to different economic and market factors than does one-month LIBOR. It is possible that the mortgage rates on certain of the adjustable-rate Mortgage Loans may decline while the pass-through rates on the Class A and Mezzanine Certificates are stable or rising. It is also possible that the mortgage rates on the adjustable-rate Mortgage Loans and the pass-through rates on the Class A and Mezzanine Certificates may both decline or increase during the same period, but that the pass-through rates on the Class A and Mezzanine Certificates may decline more slowly or increase more rapidly.

If the pass-through rate on any class of Class A and Mezzanine Certificates is limited for any Distribution Date, the resulting basis risk shortfalls may be recovered by the holders of such class of certificates on such Distribution Date or future Distribution Dates, to the extent that on such Distribution Dates there are available funds remaining after certain other distributions on the Class A and Mezzanine Certificates and the payment of certain fees and expenses of the trust (including the Net Swap Payment, if any, or any Swap Termination Payment owed to the Swap Provider other than a Swap Termination Payment due to a Swap Provider Trigger Event).

Amounts used to pay such shortfalls on the Class A and Mezzanine Certificates may be supplemented by the Interest Rate Swap Agreement to the extent the floating payment by the Swap Provider exceeds the fixed payment by the Trust on any Distribution Date and such amount is available in the priority described in this prospectus supplement. However, the amount received from the Swap Provider under the Interest Rate Swap Agreement may be insufficient to pay the holders of the applicable certificates the full amount of interest which they would have received absent the limitations of the rate cap.

Risks Associated with the Mezzanine Certificates

The weighted average lives of, and the yields to maturity on the Mezzanine Certificates will be progressively more sensitive, in increasing order of their distribution priorities, to the rate and timing of mortgagor defaults and the severity of ensuing losses on the Mortgage Loans. If the actual rate and severity of losses on the Mortgage Loans is higher than those assumed by an investor in such certificates, the actual yield to maturity of such certificates may be lower than the yield anticipated by such holder based on such assumption. The timing of losses on the Mortgage Loans will also affect an investor’s actual yield to maturity, even if the rate of defaults and severity of losses over the life of the mortgage pool are consistent with an investor’s expectations. In general, the earlier a loss occurs, the greater the effect on an investor’s yield to maturity. Realized losses on the Mortgage Loans, to the extent they exceed the amount of overcollateralization following distributions of principal on the related Distribution Date, will reduce the certificate principal balance of the class of Mezzanine Certificates then outstanding with the highest numerical class designation. As a result of such reductions, less interest will accrue on such certificates than would otherwise be the case. Once a realized loss is allocated to a Mezzanine Certificate, no principal or interest will be distributable with respect to such written down amount. However, the amount of any realized losses allocated to the Mezzanine Certificates may be distributed to the holders of such certificates according to the priorities set forth under “Description of the Certificates—Overcollateralization Provisions” and “Description of the Certificates—Interest Rate Swap Agreement, the Swap Provider and the Supplemental Interest Trust” in this prospectus supplement.

Unless the aggregate certificate principal balance of the Class A Certificates has been reduced to zero, the Mezzanine Certificates will not be entitled to any principal distributions until at least November 2009 or a later date as provided in this prospectus supplement or during any period in which delinquencies or realized losses on the Mortgage Loans exceed certain levels. As a result, the weighted average lives of the Mezzanine Certificates will be longer than would otherwise be the case if distributions of principal were allocated among all of the certificates at the same time. As a result of the longer weighted average lives of the Mezzanine Certificates, the holders of such certificates have a greater risk of suffering a loss on their investments. Furthermore, because such certificates might not receive any principal if certain delinquency levels occur, it is possible for such certificates to receive no principal distributions even if no losses have occurred on the mortgage pool.

In addition, the multiple class structure of the Mezzanine Certificates causes the yields of such classes to be particularly sensitive to changes in the rates of prepayment of the Mortgage Loans. Because distributions of principal will be made to the holders of such certificates according to the priorities described in this prospectus supplement, the yield to maturity on such classes of certificates will be sensitive to the rates of prepayment on the Mortgage Loans experienced both before and after the commencement of principal distributions on such classes. The yield to maturity on such classes of certificates will also be extremely sensitive to losses due to defaults on the Mortgage Loans (and the timing thereof), to the extent such losses are not covered by excess interest, the Class C Certificates or a class of Mezzanine Certificates with a higher numerical class designation. Furthermore, as described in this prospectus supplement, the timing of receipt of principal and interest by the Mezzanine Certificates may be adversely affected by losses even if such classes of certificates do not ultimately bear such loss.

Prepayment Interest Shortfalls and Relief Act Shortfalls

When a Mortgage Loan is prepaid, the mortgagor is charged interest on the amount prepaid only up to the date on which the prepayment is made, rather than for an entire month. This may result in a shortfall in interest collections available for distribution on the next Distribution Date. The Servicer is required to cover a portion of the shortfall in interest collections that are attributable to prepayments, but only up to the amount of the Servicer’s servicing fee and Prepayment Interest Excess (as defined in the pooling agreement) for the related period. The Servicer is not required to off-set prepayment interest shortfalls from any interest income or ancillary income otherwise payable to the Servicer. In addition, certain shortfalls in interest collections arising from the application of the Relief Act or any state law providing for similar relief will not be covered by the Servicer.

On any Distribution Date, any shortfalls resulting from the application of the Relief Act or any state law providing for similar relief and any prepayment interest shortfalls to the extent not covered by compensating interest paid by the Servicer will be allocated, first, to the interest accrued on the Class C Certificates, and thereafter, to the Monthly Interest Distributable Amounts with respect to the Class A and Mezzanine Certificates on a pro rata basis based on the respective amounts of interest accrued on such certificates for such Distribution Date. The holders of the Class A and Mezzanine Certificates will not be entitled to reimbursement for any such interest shortfalls. If these shortfalls are allocated to the Class A and Mezzanine Certificates, the amount of interest paid to those certificates will be reduced, adversely affecting the yield on your investment.

Reimbursement of Advances by the Servicer Could Delay Distributions on the Certificates

Under the pooling agreement, the Servicer will make cash advances to cover delinquent payments of principal and interest to the extent it reasonably believes that the cash advances are recoverable from future payments or recoveries on the Mortgage Loans. The Servicer may make such advances from amounts held for future distribution. In addition, the Servicer may withdraw from the collection account funds that were not included in available funds for the preceding Distribution Date to reimburse itself for advances previously made. Any such amounts withdrawn by the Servicer in reimbursement of advances previously made are generally required to be replaced by the Servicer on or before the next Distribution Date, subject to subsequent withdrawal. To the extent that the Servicer is unable to replace any amounts withdrawn in reimbursement of advances previously made, there could be a delay in distributions on the Class A and Mezzanine Certificates. Furthermore, the Servicer’s right to reimburse itself for advances previously made from funds held for future distribution could lead to amounts required to be restored to the collection account by the Servicer that are higher, and potentially substantially higher, than one month’s advance obligation.

Delay in Receipt of Liquidation Proceeds; Liquidation Proceeds May Be Less than Principal Balance of Mortgage Loans

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

High Loan-to-Value Ratios Increase Risk of Loss

Mortgage Loans with higher loan-to-value ratios may present a greater risk of loss than Mortgage Loans with loan-to-value ratios of 80% or below. Approximately 39.99% of the Initial Group I Mortgage Loans and approximately 40.92% of the Initial Group II Mortgage Loans (in each case, by aggregate principal balance of the related Loan Group as of the Cut-off Date) had loan-to-value ratios (or combined original loan-to-value ratios, in the case of second lien Initial Group II Mortgage Loans) in excess of 80.00%, but no more than 100.00%, at origination. Additionally, the Servicer’s determination of the value of a mortgaged property used in the calculation of the loan-to-value ratios of the Mortgage Loans may differ from the appraised value of such mortgaged properties or the actual value of such mortgaged properties. See “The Mortgage Pool - General” and “The Originator and Sponsor —Underwriting Standards” herein.

Balloon Loan Risk

Balloon loans pose a risk because a mortgagor must make a large lump sum payment of principal at the end of the loan term. If the mortgagor is unable to pay the lump sum or refinance such amount, you may suffer a loss. Approximately 40.10% of the Initial Group I Mortgage Loans and approximately 36.12% of the Initial Group II Mortgage Loans (in each case, by aggregate principal balance of the related Loan Group as of the Cut-off Date) are balloon loans.

Simultaneous Second Lien Risk

With respect to approximately 10.82% of the Initial Group I Mortgage Loans and approximately 19.34% of the Initial Group II Mortgage Loans, at the time of origination of the first lien Mortgage Loan, the Originator also originated a second lien mortgage loan which may or may not be included in the Trust. The weighted average original loan-to-value ratio of such Mortgage Loans is approximately 79.96% with respect to such Initial Group I Mortgage Loans and approximately 79.99% with respect to such Initial Group II Mortgage Loans, and the weighted average original combined loan-to-value ratio of such Mortgage Loans (including the second lien) is approximately 99.80% with respect to such Initial Group I Mortgage Loans and approximately 99.95% with respect to such Initial Group II Mortgage Loans. With respect to Mortgage Loans that have second lien mortgage loans encumbering the same Mortgaged Property, foreclosure frequency may be increased relative to Mortgage Loans that do not have subordinate financing behind them since mortgagors have less equity in the mortgaged property. In addition, the Servicer may declare a default on the second lien loan even though the first lien loan is current which would constitute a default on the first lien loan. In addition to the Mortgage Loans discussed above that have simultaneous subordinate financing provided by the Originator, with respect to certain other Mortgage Loans, at the time of origination of the first lien Mortgage Loan, the related Mortgaged Property was also encumbered by a second lien mortgage to a mortgagee other than the Originator. Investors should also note that any mortgagor may obtain subordinate financing at any time subsequent to the date of origination of their mortgage loan from the Originator or from any other lender.

Geographic Concentration

The charts presented under “Summary of Terms—Mortgage Loans” list the states with the highest concentrations of Mortgage Loans. Because of the relative geographic concentration of the mortgaged properties within certain states, losses on the mortgage loans may be higher than would be the case if the mortgaged properties were more geographically diversified. For example, some of the mortgaged properties may be more susceptible to certain types of special hazards, such as earthquakes, hurricanes, floods, wildfires and other natural disasters and major civil disturbances, than residential properties located in other parts of the country.

In addition, the conditions below will have a disproportionate impact on the Mortgage Loans based on their location:

·   Economic conditions in states with high concentrations of Mortgage Loans which may or may not affect real property values may affect the ability of mortgagors to repay their mortgage loans on time.

·   Declines in the residential real estate markets in the states with high concentrations of Mortgage Loans may reduce the values of properties located in those states, which would result in an increase in the loan-to-value ratios.

·   Any increase in the market value of properties located in the states with high concentrations of Mortgage Loans would reduce the loan-to-value ratios and could, therefore, make alternative sources of financing available to the mortgagors at lower interest rates, which could result in an increased rate of prepayment of the Mortgage Loans.

Violation of Various Federal and State Laws May Result in Losses on the Mortgage Loans

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

The Mortgage Loans are also subject to federal laws, including:

·   the federal Truth-in-Lending Act and Regulation Z promulgated thereunder, which require certain disclosures to the mortgagors regarding the terms of the mortgage loans;

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

·   the Fair Credit Reporting Act, which regulates the use and reporting of information related to the mortgagor’s credit experience.

Violations of certain provisions of these federal laws may limit the ability of the Servicer to collect all or part of the principal of or interest on the Mortgage Loans, could subject the trust to damages and administrative enforcement and could result in the borrowers rescinding such Mortgage Loans against either the trust or subsequent holders of the Mortgage Loans.

The Sponsor will represent that as of the Closing Date or the Subsequent Transfer Date, as applicable, each Mortgage Loan originated by it is in compliance with applicable federal and state laws and regulations. In the event of a breach of such representation, either Option One Mortgage Capital Corporation or the Sponsor will be obligated to cure such breach or repurchase or replace the affected Mortgage Loan in the manner described under “The Pooling Agreement—Assignment of the Mortgage Loans” in this prospectus supplement.

High Cost Loans

The Sponsor will represent that none of the Mortgage Loans are “High Cost Loans” within the meaning of the federal Truth-in-Lending Act as amended by the Home Ownership and Equity Protection Act of 1994 (the “Homeownership Act”) or any state law, ordinance or regulation similar to the Homeownership Act. See “Certain Legal Aspects of the Mortgage Loans—Anti-Deficiency Legislation and Other Limitations on Lenders; Federal Laws Limiting Collections on Mortgage Loans” in the prospectus.

In addition to the Homeownership Act, a number of legislative proposals have been introduced at both the federal and state level that are designed to discourage predatory lending practices. Some states have enacted, or may enact, laws or regulations that prohibit inclusion of some provisions in mortgage loans that have mortgage rates or origination costs in excess of prescribed levels, and require that borrowers be given certain disclosures prior to the consummation of such mortgage loans. In some cases, state law may impose requirements and restrictions greater than those in the Homeownership Act. The Originator’s failure to comply with these laws could subject the trust, and other assignees of the Mortgage Loans, to monetary penalties and could result in the borrowers rescinding such Mortgage Loans against either the trust or subsequent holders of the Mortgage Loans. Lawsuits have been brought in various states making claims against assignees of High Cost Loans for violations of state law. Named defendants in these cases include numerous participants within the secondary mortgage market, including some securitization trusts.

Under the anti-predatory lending laws of some states, the borrower is required to meet a net tangible benefits test in connection with the origination of the related mortgage loan. This test may be highly subjective and open to interpretation. As a result, a court may determine that a mortgage loan does not meet the test even if the Originator reasonably believed that the test was satisfied. Any determination by a court that a Mortgage Loan does not meet the test will result in a violation of the state anti-predatory lending law, in which case the Sponsor will be required to purchase such Mortgage Loan from the Trust.

The Sponsor will represent that none of the Mortgage Loans originated in Georgia are subject to the Georgia Fair Lending Act effective from October 1, 2002 to March 6, 2003.

The Certificates are Obligations of the Trust Only

The certificates will not represent an interest in or obligation of the Depositor, the Servicer, the Originator, the Sponsor, the Sellers, the Trustee or any of their respective affiliates. Neither the certificates nor the underlying Mortgage Loans will be guaranteed or insured by any governmental agency or instrumentality, or by the Depositor, the Servicer, the Trustee or any of their respective affiliates. Proceeds of the assets included in the trust will be the sole source of distributions on the Class A and Mezzanine Certificates, and there will be no recourse to the Depositor, the Servicer, the Originator, the Sponsor, the Sellers, the Trustee or any other entity in the event that such proceeds are insufficient or otherwise unavailable to make all distributions provided for under the Class A and Mezzanine Certificates.

The Interest Rate Swap Agreement and the Swap Provider

Any amounts received from the Swap Provider under the Interest Rate Swap Agreement will be applied as described in this prospectus supplement to pay interest shortfalls and basis risk shortfalls, maintain overcollateralization and cover losses. However, no amounts will be payable by the Swap Provider unless the floating payment owed by the Swap Provider on a Distribution Date exceeds the fixed payment owed to the Swap Provider on such Distribution Date. This will not occur except in periods when one-month LIBOR (as determined pursuant to the Interest Rate Swap Agreement) exceeds the Strike Rate. No assurance can be made that any amounts will be received under the Interest Rate Swap Agreement, or that any such amounts that are received will be sufficient to maintain required overcollateralization or to cover interest shortfalls, basis risk shortfalls and losses on the Mortgage Loans. Any net payment payable to the Swap Provider under the terms of the Interest Rate Swap Agreement will reduce amounts available for distribution to Certificateholders, and may reduce the Pass-Through Rates of the certificates. The combination of a rapid rate of prepayment and low prevailing interest rates could adversely affect the yields on the Class A and Mezzanine Certificates. In addition, any termination payment payable to the Swap Provider (other than a Swap Termination Payment resulting from a Swap Provider Trigger Event) in the event of early termination of the Interest Rate Swap Agreement will reduce amounts available for distribution to Certificateholders.

Upon early termination of the Interest Rate Swap Agreement, the Trust or the Swap Provider may be liable to make a Swap Termination Payment to the other party (regardless of which party caused the termination). The Swap Termination Payment will be computed in accordance with the procedures set forth in the Interest Rate Swap Agreement. In the event that the Trust is required to make a Swap Termination Payment, other than a Swap Termination Payment resulting from a Swap Provider Trigger Event that payment will be paid on the related Distribution Date, and on any subsequent Distribution Dates until paid in full, prior to distributions to Certificateholders. This feature may result in losses on the Certificates. Due to the priority of the applications of the Available Funds, the Mezzanine Certificates will bear the effects of any shortfalls resulting from a Net Swap Payment or Swap Termination Payment by the Trust before such effects are borne by the Class A Certificates and one or more classes of Mezzanine Certificates may suffer a loss as a result of such payment.

To the extent that distributions on the Class A and Mezzanine Certificates depend in part on payments to be received by the Trust under the Interest Rate Swap Agreement, the ability of the Trustee to make such distributions on such certificates will be subject to the credit risk of the Swap Provider to the Interest Rate Swap Agreement. The credit ratings of the Swap Provider as of the date of this prospectus supplement will likely be lower than the ratings assigned to the Class A Certificates. See “Description of the Certificates—The Swap Provider” in this prospectus supplement.

Lack of Liquidity

Each of Greenwich Capital Markets, Inc., Banc of America Securities LLC, Barclays Capital Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities Inc. and Lehman Brothers Inc. intends to make a secondary market in the classes of Offered Certificates actually purchased by it, but none of them has any obligation to do so. There is no assurance that such a secondary market will develop or, if it develops, that it will continue. Consequently, you may not be able to sell your certificates readily or at prices that will enable you to realize your desired yield. H&R Block Financial Advisors, Inc. does not intend to make a secondary market in any class of the Offered Certificates. The market values of the certificates are likely to fluctuate; these fluctuations may be significant and could result in significant losses to you.

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

Nature of the Mortgage Loans

The Mortgage Loans in the trust were originated or acquired in accordance with the Option One Underwriting Guidelines described herein without regard to whether such Mortgage Loans would be acceptable for purchase by Fannie Mae or Freddie Mac. As a result, delinquencies and liquidation proceedings are more likely with these Mortgage Loans than with mortgage loans that are originated in a more traditional manner. As a result of the use of such underwriting standards, in the event the Mortgage Loans do become delinquent or subject to liquidation, you may face delays in receiving payment and losses if the credit enhancements are insufficient to cover the delays and losses.

There May Be Variations in Additional Mortgage Loans and Subsequent Mortgage Loans from the Initial Mortgage Loans

Each Additional Mortgage Loan and Subsequent Mortgage Loan generally will satisfy the eligibility criteria described in this prospectus supplement at the time of its sale to the trust. The characteristics of the Additional Mortgage Loans and the Subsequent Mortgage Loans, however, may vary from the specific characteristics reflected in the statistical information relating to the Initial Mortgage Loans presented in this prospectus supplement, although the extent of such variance is not expected to be material.

Mandatory Prepayment

To the extent that the amount on deposit in either Pre-Funding Account has not been fully applied to the purchase of Subsequent Mortgage Loans on or before January 23, 2007, the holders of the related Class A Certificates will receive on the Distribution Date in January 23, 2007 the amounts in the related Pre-Funding Account after giving effect to any purchase of Subsequent Mortgage Loans. Although no assurance can be given, the Depositor intends that the principal amount of Subsequent Mortgage Loans sold to the Trustee will require the application of substantially all amounts on deposit in the Pre-Funding Accounts and that there will be no material principal distribution to the holders of any Class A Certificates on such Distribution Date resulting from unused pre-funding amounts.

Reduction or Withdrawal of Ratings

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

Suitability of the Class A and Mezzanine Certificates as Investments

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

Additional rights of the holder of the Class C Certificates

Pursuant to the pooling agreement, in the event of a default and removal of the Servicer, the majority holder of the Class C Certificates (other than Option One Mortgage Corporation) or, if such Class C Certificates have been resecuritized, the party specified in the operative documents related to such resecuritization (either such party, the “Residual Holder”) will have the right, at its sole discretion, to direct the Trustee to appoint a qualified successor servicer who will act as successor in all respects to the Servicer. In addition, the Residual Holder may have the right to direct the Servicer to transfer the servicing of certain mortgage loans delinquent 120 days or more to a special servicer appointed by the Residual Holder as described in the pooling agreement. In either case, the successor servicer or special servicer will be obligated to comply with the terms of the pooling agreement. Any special servicer appointed by the Residual Holder will be entitled to the Servicing Fee for the Mortgage Loans serviced by it and any excess fees due to such special servicer will be paid by the Residual Holder.

Investors in the Class A and Mezzanine Certificates should note that:

·   such right to be granted to the Residual Holder may be inconsistent with, and adverse to the interests of the holders of the Class A and Mezzanine Certificates and the Residual Holder has no obligation or duty to consider the interests of the Class A and Mezzanine Certificates in connection with the exercise or nonexercise of such Residual Holder’s rights;

·   the Residual Holder’s exercise of such right may negatively affect the Class A and Mezzanine Certificates and the existence of the Residual Holder’s right, whether or not exercised, may adversely affect the liquidity of the Class A and Mezzanine Certificates relative to other asset-backed certificates backed by comparable mortgage loans and with comparable distribution priorities and ratings; and

·   the performance of the Class A and Mezzanine Certificates may differ from that of other securitizations of the Sponsor due to the exercise of these rights by the Residual Holder.

Litigation concerning Option One Mortgage Corporation

In July 2004, Option One Mortgage Corporation was named as defendant and served with a class action complaint filed by Larry and Brandi Freitag, as plaintiffs, in the Third Judicial Circuit Court in Madison County, Illinois. The complaint alleges breach of contract, or in the alternative unjust enrichment, and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. Specifically, the plaintiffs allege that Option One Mortgage Corporation improperly retained an extra day of per diem interest on residential mortgage loans by charging per diem interest up to and including the date of payoff. The class is defined as all persons in the United States who paid interest on or after the day of payoff and who did not receive a refund from Option One Mortgage Corporation of the interest charged on or after the day of payoff. This action is one of several actions filed earlier against other lenders by the same attorneys on a similar basis in the same court. In one such action, the court granted the defendant's motion to dismiss the plaintiff's claims of defendant's violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. Plaintiffs have agreed to settle their individual claims; plaintiffs’ counsel has a motion pending to continue prosecution of the class action. Plaintiff’s counsel filed a motion to substitute Larry and Pamela Smith as plaintiffs, which was granted. Option One Mortgage Corporation filed a motion to compel arbitration. In a similar action before the same judge in the Third Judicial Circuit Court in Madison County, Illinois, the Court rules in favor of the defendants on the underlying per diem interest claim.

On January 31, 2006, the Circuit Court of Cook County, Illinois County Department, Chancery Division, certified a nationwide class action against Option One Mortgage Corporation on a complaint brought by Erin and Earl Austria, in which the Austria’s allege that Option One impermissibly assessed them a reconveyance fee and authorized the assessment of a title indemnity fee on certain mortgage loans that have been paid-in-full. The Court has granted Option One’s motion for an interlocutory appeal of the order of class certification.

On February 28, 2006, Option One Mortgage Corporation was named as a defendant and served with a class action complaint filed by Jeffrey Wright, et al., as plaintiffs, in the United States District Court for the Central District of California, Southern Division. The complaint alleges that Option One Mortgage Corporation’s affiliate H&R Block Mortgage Corporation failed to pay overtime wages to its loan officers in accordance with the Fair Labor Standards Act and that such alleged failure constitutes an unfair business practice under California’s Business and Professions Code. Option One Mortgage Corporation is named as a defendant under the theory that it and H&R Block Mortgage operate as a single employer. On May 1, 2006, the Court granted Option One and H&R Block Mortgage’s motion to transfer the action to the District Court in Boston, Massachusetts. Option One and H&R Block Mortgage intend to file a motion to compel arbitration after the case has been formally transferred to the Massachusetts District Court.

On July 28, 2006, Option One Mortgage Corporation was named as a defendant and served with a class action complaint filed by Chadwick Thompson, individually and on behalf of all persons similarly situated who worked for the defendants in California, in the United States District Court for the Southern District of California. The complaint alleges that Option One Mortgage Corporation’s affiliate H&R Block Mortgage Corporation failed to properly classify and pay loan officers for overtime worked in violation of the Fair Labor Standards Act, California law, and California’s Unfair Competition Law. The complaint further alleges that Option One and H&R Block Mortgage failed to provide meal and rest periods and seeks restitution and waiting time penalties. Option One filed an answer on August 17, 2006 denying the allegations in the Complaint.

AFFILIATIONS AND RELATED TRANSACTIONS

The depositor is a direct wholly-owned subsidiary of Option One Mortgage Capital Corporation. Option One Mortgage Capital Corporation is a direct wholly-owned subsidiary of the sponsor. H&R Block Financial Advisors, Inc., one of the co-managers, is a direct wholly-owned subsidiary of H&R Block, Inc. and an affiliate of Option One Mortgage Corporation.

There is not currently, and there was not during the past two years, any material business relationship, agreement, arrangement, transaction or understanding that is or was entered into outside the ordinary course of business or is or was on terms other than would be obtained in an arm’s length transaction with an unrelated third party, between (a) any of the Sponsor, the Depositor and the Issuing Entity and (b) any of the Servicer, the Trustee or the Originator.

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

The Underwriters provide warehouse financing to the Sponsor that may be secured by some or all of the Mortgage Loans. The Underwriters will release any and all of its liens on or security interests in the Mortgage Loans prior to the Closing Date.

THE MORTGAGE POOL

The information set forth in the following paragraphs has been provided by the Originator.

The statistical information presented in this prospectus supplement relates to the Initial Mortgage Loans and related mortgaged properties in each Loan Group as of the Cut-off Date, as adjusted for scheduled principal payments due on or before the Cut-off Date whether or not received. Additional Mortgage Loans will be included in the Mortgage Pool at or prior to the issuance of the Certificates unless including such Mortgage Loans would materially alter the characteristics of the Initial Mortgage Loans as described herein. Prior to the issuance of the Class A and Mezzanine Certificates, Mortgage Loans may be removed from one or both Loan Groups as a result of incomplete documentation or otherwise if the Depositor deems such removal necessary or desirable, and may be prepaid at any time. The Depositor believes that the information set forth herein with respect to the Initial Mortgage Loans will be representative of the characteristics of the mortgage pool as it will be constituted at the time the Class A and Mezzanine Certificates are issued, although the range of mortgage rates and maturities and certain other characteristics of the Initial Mortgage Loans may vary. Any statistic presented on a weighted average basis or any statistic based the aggregate principal balance of the Initial Mortgage Loans is subject to a variance of plus or minus 5%.

If any material pool characteristic of the Initial Mortgage Loans on the Closing Date differs by more than 5% or more from the description of the Initial Mortgage Loans in this prospectus supplement, the Depositor will file updated pool characteristics by Form 8-K within four days following the Closing Date.

Unless otherwise noted, all statistical percentages or weighted averages set forth in this prospectus supplement are measured as a percentage of the aggregate principal balance of the Initial Mortgage Loans in the related Loan Group as of the Cut-off Date (the “Cut-off Date Principal Balance”) and do not include the Additional Mortgage Loans or the Subsequent Mortgage Loans. Additional Mortgage Loans and Subsequent Mortgage Loans will be selected using the same criteria used to select the Initial Mortgage Loans, and the same representations and warranties will be made with respect to the Additional Mortgage Loans and Subsequent Mortgage Loans. The “Principal Balance” of a Mortgage Loan as of any date is equal to the principal balance of such Mortgage Loan at its origination, less the sum of scheduled and unscheduled payments in respect of principal made on such Mortgage Loan. The “Pool Balance” as of any date is equal to the aggregate of the Principal Balances of the Mortgage Loans in both Loan Groups.

General

Option One Mortgage Loan Trust 2006-3 (the “Trust”) will consist of a pool of first and second lien adjustable-rate and fixed-rate, fully-amortizing and balloon payment, residential mortgage loans (the “Mortgage Loans” or the “Mortgage Pool”) which will in turn consist of two groups of first and second lien adjustable-rate and fixed-rate, fully-amortizing and balloon payment Mortgage Loans (the “Group I Mortgage Loans” and the “Group II Mortgage Loans”).

The Group I Mortgage Loans will include initial mortgage loans described in this prospectus supplement (the “Initial Group I Mortgage Loans”), additional mortgage loans delivered on the Closing Date (the “Additional Group I Mortgage Loans”) and subsequent mortgage loans delivered after the Closing Date (the “Subsequent Group I Mortgage Loans”). The Group II Mortgage Loans will include initial mortgage loans described in this prospectus supplement (the “Initial Group II Mortgage Loans”; and together with the Initial Group I Mortgage Loans, the “Initial Mortgage Loans”) additional mortgage loans delivered on the Closing Date (the “Additional Group II Mortgage Loans”; together with the Additional Group I Mortgage Loans, the “Additional Mortgage Loans”; and together with the Initial Mortgage Loans, the “Closing Date Mortgage Loans”) and subsequent mortgage loans delivered after the Closing Date (the “Subsequent Group II Mortgage Loans”; together with the Subsequent Group I Mortgage Loans, the “Subsequent Mortgage Loans”).

The aggregate principal balance of the Closing Date Mortgage Loans is expected to equal approximately $1,100,000,000.

The Initial Group I Mortgage Loans have original terms to maturity ranging from 180 months to 360 months and a Cut-off Date Principal Balance of approximately $463,373,714. Subsequent to the Closing Date, the Trust will purchase, to the extent available, approximately $185,349,481 in Subsequent Group I Mortgage Loans. The Initial Group II Mortgage Loans have original terms to maturity ranging from 180 months to 360 months and a Cut-off Date Principal Balance of approximately $536,626,311. Subsequent to the Closing Date, the Trust will purchase, to the extent available, approximately $214,650,519 in Subsequent Group II Mortgage Loans.

All of the adjustable-rate Mortgage Loans will be secured by either first or second mortgages or deeds of trust or other similar security instruments (each, a “Mortgage”) and all of the fixed-rate Mortgage Loans will be secured by either first or second Mortgages. The Mortgages create first or second liens on one- to four-family residential properties consisting of attached or detached one- to four-family dwelling units, individual condominium units, planned unit developments and manufactured housing (each, a “Mortgaged Property”). The Initial Group I Mortgage Loans consist of approximately 2,680Mortgage Loans, of which approximately 98.90% are secured by first Mortgages and 1.10% are secured by second Mortgages. The Initial Group II Mortgage Loans consist of approximately 2,395 Mortgage Loans, of which approximately 93.46% are secured by first Mortgages and approximately 6.54% are secured by second Mortgages.

The Depositor will purchase the Initial Group I Mortgage Loans and the Initial Group II Mortgage Loans (together, the “Initial Mortgage Loans”) from the Sellers pursuant to the Mortgage Loan Purchase Agreement (the “Mortgage Loan Purchase Agreement”), among the Sellers and the Depositor. Pursuant to the Pooling and Servicing Agreement, dated as of October 1, 2006 (the “Pooling Agreement”), among the Depositor, the Servicer and the Trustee, the Depositor will cause the Mortgage Loans to be assigned to the Trustee for the benefit of the Certificateholders. See “The Pooling Agreement” herein.

The Additional Mortgage Loans, originated prior to the Closing Date will be included in the assets of the Trust on the Closing Date. Subsequent Group I Mortgage Loans and Subsequent Group II Mortgage Loans are intended to be purchased by the Trustee, on behalf of the Trust, from the Depositor from time to time on or before January 23, 2007 from funds on deposit in the Group I Pre-Funding Account and the Group II Pre-Funding Account, respectively. The Pooling Agreement will provide that each Subsequent Mortgage Loan must conform to certain specified characteristics and, following the conveyance of the Subsequent Mortgage Loans, the Mortgage Pool must conform to certain specified characteristics as described below under “—Conveyance of Additional Mortgage Loans, Subsequent Mortgage Loans and the Pre-Funding Accounts.”

Under the Mortgage Loan Purchase Agreement, the Sponsor and Option One Mortgage Capital Corporation will make certain representations and warranties to the Depositor (which will be assigned to the Trustee) relating to, among other things, the due execution and enforceability of the Mortgage Loan Purchase Agreement and certain characteristics of the Mortgage Loans. Subject to certain limitations, either Option One Mortgage Capital Corporation or the Sponsor will be obligated to repurchase or substitute a similar mortgage loan for any Mortgage Loan as to which there exists deficient documentation or an uncured breach of any such representation or warranty, if such breach of any such representation or warranty materially and adversely affects the Certificateholders’ interests in such Mortgage Loan. The Depositor will make no representations or warranties with respect to the Mortgage Loans and will have no obligation to repurchase or substitute Mortgage Loans with deficient documentation or that are otherwise defective. The Sellers are selling the Mortgage Loans without recourse and will have no obligations with respect to the Certificates in their capacity as Sellers.

The Mortgage Loans are subject to the “due-on-sale” provisions included therein and each adjustable-rate mortgage loan provides that the Mortgage Loan is assumable by a creditworthy purchaser of the related Mortgaged Property.

Each Mortgage Loan will accrue interest at the adjustable-rate or fixed-rate calculated as specified under the terms of the related mortgage note (each such rate, a “Mortgage Rate”). Approximately 98.90% of the Initial Group I Mortgage Loans are adjustable-rate Mortgage Loans (the “Initial Adjustable-Rate Group I Mortgage Loans”) and approximately 1.10% of the Initial Group I Mortgage Loans are fixed-rate Mortgage Loans (the “Initial Fixed-Rate Group I Mortgage Loans”). Approximately 93.49% of the Initial Group II Mortgage Loans are adjustable-rate Mortgage Loans (the “Initial Adjustable-Rate Group II Mortgage Loans”) and approximately 6.51% of the Initial Group II Mortgage Loans are fixed-rate Mortgage Loans (the “Initial Fixed-Rate Group II Mortgage Loans”).

Each of the fixed-rate Mortgage Loans has a Mortgage Rate that is fixed for the life of such Mortgage Loan.

Each adjustable-rate Mortgage Loan accrues interest at a Mortgage Rate that is adjustable. Generally, the adjustable-rate Mortgage Loans provide for semi-annual adjustment to the Mortgage Rate thereon and for corresponding adjustments to the monthly payment amount due thereon, in each case on each adjustment date applicable thereto (each such date, an “Adjustment Date”); provided, that the first adjustment for the Initial Adjustable-Rate Group I Mortgage Loans will occur after an initial period of two years, in the case of approximately 88.79% of the Initial Adjustable-Rate Group I Mortgage Loans; three years, in the case of approximately 3.32% of the Initial Adjustable-Rate Group I Mortgage Loans; five years, in the case of approximately 7.86% of the Initial Adjustable-Rate Group I Mortgage Loans or fifteen years, in the case of approximately 0.02% of the Initial Adjustable-Rate Group I Mortgage Loans; and that the first adjustment for the Initial Adjustable-Rate Group II Mortgage Loans will occur after an initial period of two years, in the case of approximately 91.03% of the Initial Adjustable-Rate Group II Mortgage Loans; three years, in the case of approximately 2.03% of the Initial Adjustable-Rate Group II Mortgage Loans; five years, in the case of approximately 6.91% of the Initial Adjustable-Rate Group II Mortgage Loans or fifteen years, in the case of approximately 0.03% of the Initial Adjustable-Rate Group II Mortgage Loans (any adjustable-rate Mortgage Loan having such a delayed first adjustment feature, a “Delayed First Adjustment Mortgage Loan”). On each Adjustment Date for each adjustable-rate Mortgage Loan, the Mortgage Rate thereon will be adjusted to equal the sum, rounded to the nearest or next highest multiple of 0.125%, of Six-Month LIBOR (as defined below) and a fixed percentage amount (the “Gross Margin”). The Mortgage Rate on each Initial Adjustable-Rate Mortgage Loan will not increase or decrease by more than a stated percentage (1.000% per annum to 3.000% per annum, as specified in the related mortgage note) on the first related Adjustment Date (the “Initial Periodic Rate Cap”) and will not increase or decrease by more than a stated percentage (1.000% per annum to 1.500% per annum, as specified in the related mortgage note) on any Adjustment Date thereafter (the “Subsequent Periodic Rate Cap”). The Initial Adjustable-Rate Group I Mortgage Loans have a weighted average Initial Periodic Rate Cap of approximately 2.987% per annum and a weighted average Subsequent Periodic Rate Cap of approximately 1.001% per annum, and the Initial Adjustable-Rate Group II Mortgage Loans have a weighted average Initial Periodic Rate Cap of approximately 2.979% per annum and a weighted average Subsequent Periodic Rate Cap of approximately 1.001% per annum. Each Mortgage Rate on each adjustable-rate Mortgage Loan will not exceed a specified maximum Mortgage Rate over the life of such Mortgage Loan (the “Maximum Mortgage Rate”) or be less than a specified minimum Mortgage Rate over the life of such Mortgage Loan (the “Minimum Mortgage Rate”). Effective with the first monthly payment due on each adjustable-rate Mortgage Loan after each related Adjustment Date, the monthly payment amount will be adjusted to an amount that will amortize fully the outstanding Principal Balance of the related Mortgage Loan over its remaining term, and pay interest at the Mortgage Rate as so adjusted. Due to the application of the Periodic Rate Caps and the Maximum Mortgage Rates, the Mortgage Rate on each such adjustable-rate Mortgage Loan, as adjusted on any related Adjustment Date, may be less than the sum of the Index and the related Gross Margin, rounded as described in this prospectus supplement.

Approximately 2.96% of the Initial Group I Mortgage Loans and approximately 18.17% of the Initial Group II Mortgage Loans (by aggregate principal balance of the Initial Mortgage Loans as of the Cut-off Date) (the “Interest Only Mortgage Loans”) provide that for a period of 60 months after origination, the required monthly payments are limited to accrued interest (each, an “Interest Only Period”). At the end of the Interest Only Period, the monthly payments on each such Mortgage Loan will be recalculated to provide for amortization of the Principal Balance by the maturity date and payment of interest at the then-current Mortgage Rate.

Approximately 70.02% of the Initial Group I Mortgage Loans and approximately 74.05% of the Initial Group II Mortgage Loans provide for payment by the mortgagor of a prepayment charge in limited circumstances on certain prepayments. Generally, each such Mortgage Loan having a prepayment charge provision will provide for payment of a prepayment charge on certain partial prepayments and all prepayments in full made within a stated number of months that is between 0 and 36 months from the date of origination of such Mortgage Loan. The amount of the prepayment charge is provided in the related mortgage note and is generally equal to six months’ interest on the amount prepaid in excess of 20% of the original principal balance of the related Mortgage Loan in any twelve-month period. The holders of the Class P Certificates will be entitled to all prepayment charges received on the Mortgage Loans, and such amounts will not be available for distribution on the other classes of certificates. Under certain circumstances, as described in the Pooling Agreement, the Servicer may waive the payment of any otherwise applicable prepayment charge. Investors should conduct their own analysis of the effect, if any, that the prepayment charges, and decisions by the Servicer with respect to the waiver thereof, may have on the prepayment performance of the Mortgage Loans. As of July 1, 2003, the Alternative Mortgage Parity Act of 1982 (the “Parity Act”), which regulates the ability of the Originator to impose prepayment charges, was amended, and as a result, the Originator will be required to comply with state and local laws in originating mortgage loans with prepayment charge provisions after July 1, 2003. The Depositor makes no representations as to the effect that the prepayment charges, decisions by the Servicer with respect to the waiver thereof and the recent amendment of the Parity Act, may have on the prepayment performance of the Mortgage Loans. See “Certain Legal Aspects of Mortgage Loans-Enforceability of Certain Provisions-Prepayment Penalties” in the prospectus.

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

Initial Group I Mortgage Loans Statistics

The following statistical information, unless otherwise specified, is based upon percentages of the Principal Balances of the Initial Group I Mortgage Loans as of the Cut-off Date.

Approximately 39.99% of the Initial Group I Mortgage Loans had loan-to-value ratios at origination in excess of 80.00%. Approximately 1.97% of the Initial Group I Mortgage Loans had a loan-to-value ratio at origination in excess of 90.00% and the weighted average loan-to-value ratio of the Initial Group I Mortgage Loans at origination was approximately 79.43%. There can be no assurance that the loan-to-value ratio of any Mortgage Loan determined at any time after origination is less than or equal to its original loan-to-value ratio. Additionally, the Originator’s determination of the value of a Mortgaged Property used in the calculation of the loan-to-value ratios of the Mortgage Loans may differ from the appraised value of such Mortgaged Property or the actual value of such Mortgaged Property.

All of the Initial Group I Mortgage Loans have a Due Date of the first day of the month (the “Due Date”).

The weighted average remaining term to maturity of the Initial Group I Mortgage Loans is approximately 358months as of the Cut-off Date. None of the Initial Group I Mortgage Loans had a first Due Date prior to February 2006or after November 2006or will have a remaining term to maturity of less than 175months or greater than 360months as of the Cut-off Date. The latest maturity date of any Initial Group I Mortgage Loan is October 2036.

The average Principal Balance of the Initial Group I Mortgage Loans at origination was approximately $173,037. The average Principal Balance of the Initial Group I Mortgage Loans as of the Cut-off Date was approximately $172,901. No Initial Group I Mortgage Loan had a Principal Balance as of the Cut-off Date of greater than approximately $732,882 or less than approximately $15,032.

The Initial Group I Mortgage Loans had Mortgage Rates as of the Cut-off Date of not less than 5.700% per annum and not more than 12.950% per annum and the weighted average Mortgage Rate was approximately 8.891% per annum. As of the Cut-off Date, the Initial Adjustable-Rate Group I Mortgage Loans had Gross Margins ranging from 2.700% to 7.950%, Minimum Mortgage Rates ranging from 5.500% per annum to 12.950% per annum and Maximum Mortgage Rates ranging from 9.200% per annum to 18.950% per annum. As of the Cut-off Date, the Initial Adjustable-Rate Group I Mortgage Loans had a weighted average Gross Margin of approximately 6.177% per annum, a weighted average Minimum Mortgage Rate of approximately 8.860% per annum and a weighted average Maximum Mortgage Rate of approximately 14.843% per annum. The latest next Adjustment Date following the Cut-off Date on any Initial Adjustable-Rate Group I Mortgage Loan occurs in August 2021, and the weighted average time until the next Adjustment Date for the Initial Adjustable-Rate Group I Mortgage Loans following the Cut-off Date is approximately 25 months.

The Initial Group I Mortgage Loans are expected to have the following characteristics as of the Cut-off Date (the sum in any column may not equal the total indicated due to rounding):

Cut-off Date Principal Balances of the Initial Group I Mortgage Loans⁽¹⁾

Principal Balance ($)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
0.01 - 50,000.00		187	$	4,943,382.45		1.07	%		10.636	%		354		96.03	%		602
50,000.01 - 100,000.00		563		43,228,325.32		9.33			10.322			358		79.13			594
100,000.01 - 150,000.00		622		77,329,517.79		16.69			9.455			358		79.69			598
150,000.01 - 200,000.00		415		72,704,271.56		15.69			9.125			358		78.33			599
200,000.01 - 250,000.00		298		66,539,738.25		14.36			8.750			358		79.12			600
250,000.01 - 300,000.00		233		63,671,416.97		13.74			8.377			358		79.54			606
300,000.01 - 350,000.00		156		50,756,210.55		10.95			8.274			358		79.13			602
350,000.01 - 400,000.00		131		49,167,663.04		10.61			8.141			358		79.11			612
400,000.01 - 450,000.00		41		17,256,205.94		3.72			8.145			358		81.17			611
450,000.01 - 500,000.00		16		7,655,430.78		1.65			7.998			359		80.01			623
500,000.01 - 550,000.00		11		5,748,114.79		1.24			8.218			358		77.23			630
550,000.01 - 600,000.00		3		1,684,270.08		0.36			9.268			358		86.65			628
600,000.01 - 650,000.00		2		1,239,762.29		0.27			9.567			359		79.03			566
700,000.01 - 750,000.00		2		1,449,403.82		0.31			9.805			358		81.96			585
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602

_________________

⁽¹⁾The average Cut-off Date Principal Balance of the Initial Group I Mortgage Loans was approximately $172,901.

Credit Scores for the Initial Group I Mortgage Loans⁽¹⁾

Credit Score	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
500 - 524		122	$	21,482,210.48		4.64	%		10.220	%		357		74.37	%		513
525 - 549		134		23,720,681.13		5.12			10.071			357		77.27			537
550 - 574		410		69,963,875.75		15.10			9.256			358		77.82			565
575 - 599		782		118,292,772.59		25.53			8.891			358		79.64			587
600 - 624		508		91,818,859.27		19.82			8.620			358		80.56			611
625 - 649		400		74,275,829.55		16.03			8.516			358		80.17			636
650 - 674		176		35,055,606.53		7.57			8.334			358		80.25			661
675 - 699		65		13,467,691.64		2.91			8.243			358		82.56			684
700+		55		11,792,580.65		2.54			8.366			358		83.10			733
None		28		3,503,606.04		0.76			10.344			358		72.53			0
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602

_________________

⁽¹⁾The weighted average credit score of the Initial Group I Mortgage Loans that had credit scores was approximately 602.

Original Terms to Maturity of the Initial Group I Mortgage Loans⁽¹⁾

Original Term (months)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
180		2	$	75,027.40		0.02	%		9.943	%		178		83.35	%		637
240		3		98,314.35		0.02			11.380			237		100.00			630
360		2,675		463,200,371.88		99.96			8.890			358		79.43			602
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602

___________________

⁽¹⁾The weighted average original term to maturity of the Initial Group I Mortgage Loans was approximately 360 months.

Remaining Terms to Maturity of the Initial Group I Mortgage Loans⁽¹⁾

Remaining Term (months)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
121-180		2	$	75,027.40		0.02	%		9.943	%		178		83.35	%		637
181-240		3		98,314.35		0.02			11.380			237		100.00			630
301-360		2,675		463,200,371.88		99.96			8.890			358		79.43			602
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602

___________________

⁽¹⁾The weighted average remaining term to maturity of the Initial Group I Mortgage Loans was approximately 358 months.

Property Types of the Initial Group I Mortgage Loans

Property Type	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
2-4 Units Attached		36	$	12,177,263.51		2.63	%		8.444	%		358		76.96	%		627
2-4 Units Detached		147		40,504,586.06		8.74			8.962			358		79.24			615
Condo Low-Rise Attached		78		13,247,890.62		2.86			9.057			358		81.24			620
Condo Low-Rise Detached		2		544,299.19		0.12			7.215			355		72.15			634
Condotel Attached		1		377,859.98		0.08			7.100			359		80.00			745
PUD Attached(1)		38		7,261,710.65		1.57			8.911			358		80.20			599
PUD Detached(1)		192		34,814,651.23		7.51			8.715			358		79.66			596
Single Family Attached		94		15,707,163.59		3.39			9.034			358		79.48			599
Single Family Detached		2,092		338,738,288.80		73.10			8.908			358		79.44			600
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602

___________________

⁽¹⁾PUD refers to a home or “unit” in a Planned Unit Development.

Occupancy Status of the Initial Group I Mortgage Loans⁽¹⁾

Occupancy Status	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
Non-owner		302	$	53,549,098.94		11.56	%		9.522	%		358		83.04	%		638
Primary		2,324		397,731,758.72		85.83			8.807			358		78.94			597
Second Home		54		12,092,855.97		2.61			8.866			358		79.79			628
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602

___________________

⁽¹⁾Occupancy as represented by the mortgagor at the time of origination.

Purpose of the Initial Group I Mortgage Loans

Purpose	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
Cash Out Refinance		1,599	$	329,558,478.41		71.12	%		8.729	%		358		78.20	%		601
Purchase		815		88,060,643.85		19.00			9.425			358		83.60			612
Rate/Term Refinance		266		45,754,591.37		9.87			9.028			358		80.27			598
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602

Combined Original Loan-to-Value Ratios of the Initial Group I Mortgage Loans⁽¹⁾⁽²⁾

Combined Original Loan-to-Value Ratio (%)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
0.01 - 49.99		47	$	7,793,209.92		1.68	%		8.769	%		357		39.59	%		589
50.00 - 54.99		30		5,781,617.02		1.25			9.053			358		52.37			599
55.00 - 59.99		50		8,605,536.36		1.86			8.477			358		57.73			598
60.00 - 64.99		92		17,581,124.70		3.79			8.552			358		62.60			598
65.00 - 69.99		139		28,980,401.16		6.25			8.780			358		66.84			594
70.00 - 74.99		161		34,958,009.64		7.54			8.662			358		72.00			594
75.00 - 79.99		270		53,618,978.46		11.57			8.806			358		76.93			592
80.00		802		120,730,973.17		26.05			9.005			358		80.00			602
80.01 - 84.99		86		20,286,875.72		4.38			8.203			358		83.39			601
85.00 - 89.99		309		63,944,321.30		13.80			8.795			359		85.92			604
90.00 - 94.99		486		92,720,439.92		20.01			9.117			358		90.03			615
95.00 - 99.99		21		1,995,703.91		0.43			9.977			355		95.33			607
100.00		187		6,376,522.35		1.38			10.235			356		100.00			620
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602

___________________

⁽¹⁾ The weighted average combined original loan-to-value ratio of the Initial Group I Mortgage Loans as of the Cut-off Date was approximately 79.43%.

⁽²⁾  For a description of the determination of loan-to-value ratio by the Originator see “The Originator and Sponsor” in this prospectus supplement.

Geographic Distribution of the Mortgaged Properties related to the Initial Group I Mortgage Loans⁽¹⁾

Location	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
Alabama		24	$	2,307,722.92		0.50	%		10.108	%		358		84.19	%		588
Alaska		2		362,997.94		0.08			7.842			359		71.75			606
Arizona		56		11,682,610.31		2.52			8.681			358		79.02			602
Arkansas		10		958,447.82		0.21			10.113			358		86.93			601
California		209		62,607,462.23		13.51			7.923			358		76.79			612
Colorado		38		6,591,766.52		1.42			8.691			358		81.62			600
Connecticut		47		9,675,739.39		2.09			8.711			358		80.44			606
Delaware		5		722,788.99		0.16			8.686			359		84.52			599
District of Columbia		8		1,808,521.15		0.39			9.261			358		70.89			597
Florida		306		59,064,487.50		12.75			8.903			358		78.92			601
Georgia		94		12,302,422.58		2.65			9.655			358		82.09			604
Hawaii		12		3,888,155.98		0.84			8.591			358		78.63			633
Idaho		10		1,334,130.63		0.29			9.120			359		80.38			580
Illinois		96		16,239,160.96		3.50			9.361			358		80.14			602
Indiana		38		3,762,605.85		0.81			9.989			358		82.42			592
Iowa		14		1,280,767.57		0.28			10.055			358		83.26			607
Kansas		5		445,777.68		0.10			9.863			335		79.25			600
Kentucky		36		3,492,433.17		0.75			9.481			358		83.09			598
Louisiana		17		2,189,983.29		0.47			10.041			358		82.75			607
Maine		24		3,356,995.03		0.72			9.294			358		83.54			605
Maryland		66		13,897,846.27		3.00			8.589			358		77.48			605
Massachusetts		127		33,284,084.98		7.18			8.623			358		79.19			600
Michigan		120		14,860,450.52		3.21			9.466			358		83.47			592
Minnesota		45		7,276,835.96		1.57			8.662			357		81.62			612
Mississippi		6		488,530.66		0.11			10.146			358		85.03			580
Missouri		46		4,793,462.33		1.03			9.806			358		84.14			593
Montana		6		885,925.82		0.19			9.121			358		85.39			594
Nevada		30		6,926,999.01		1.49			8.299			358		80.54			600
New Hampshire		23		4,273,256.73		0.92			8.815			358		78.21			600
New Jersey		84		22,266,491.99		4.81			8.682			358		77.03			604
New York		135		35,918,821.81		7.75			8.630			358		74.68			605
North Carolina		66		9,259,130.57		2.00			9.523			358		82.73			606
North Dakota		2		141,514.49		0.03			10.579			358		79.33			585
Ohio		94		9,889,830.60		2.13			9.763			358		81.95			604
Oklahoma		13		1,150,395.45		0.25			9.436			358		84.77			581
Oregon		23		4,763,793.96		1.03			8.404			358		80.79			606
Pennsylvania		77		10,040,736.66		2.17			9.401			358		80.78			591
Rhode Island		29		6,319,473.76		1.36			8.552			358		81.23			624
South Carolina		31		4,060,202.93		0.88			9.244			357		79.04			603
South Dakota		3		273,842.53		0.06			9.293			359		85.97			576
Tennessee		35		2,698,991.34		0.58			9.707			358		85.18			596
Texas		366		30,686,445.65		6.62			9.770			358		80.99			593
Utah		13		2,064,594.93		0.45			8.568			359		86.07			630
Vermont		11		1,552,554.01		0.34			9.643			358		80.95			609
Virginia		69		10,782,375.11		2.33			9.442			358		81.23			592
Washington		57		12,411,485.58		2.68			8.577			358		81.14			592
Wisconsin		49		7,912,667.65		1.71			9.256			357		81.53			597
Wyoming		3		417,994.82		0.09			10.182			358		81.82			578
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602

___________________

⁽¹⁾The greatest ZIP Code geographic concentration of Initial Group I Mortgage Loans was approximately 0.28% in the 11203 ZIP Code.

Documentation Levels of the Initial Group I Mortgage Loans⁽¹⁾

Documentation Level	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
Business Bank Statements		15	$	3,557,806.13		0.77	%		8.592	%		359		83.57	%		631
Full Documentation		1,874		283,953,053.87		61.28			8.902			358		80.15			594
Lite Documentation		12		2,163,841.18		0.47			9.787			358		79.66			605
Stated Income Documentation		779		173,699,012.45		37.49			8.868			358		78.17			616
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602

___________________

⁽¹⁾For a description of each Documentation Level, see “The Originator and Sponsor” in this prospectus supplement.

Current Mortgage Rates of the Initial Group I Mortgage Loans⁽¹⁾

Current Mortgage Rate (%)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
5.500 - 5.999		7	$	2,153,000.79		0.46	%		5.861	%		358		67.28	%		656
6.000 - 6.499		22		6,405,738.30		1.38			6.296			359		73.82			618
6.500 - 6.999		76		21,172,325.71		4.57			6.796			358		74.56			627
7.000 - 7.499		111		30,861,462.72		6.66			7.252			358		77.26			623
7.500 - 7.999		233		59,651,871.15		12.87			7.772			358		78.36			619
8.000 - 8.499		291		64,851,140.00		14.00			8.234			358		79.88			608
8.500 - 8.999		419		83,961,911.73		18.12			8.749			358		80.60			601
9.000 - 9.499		325		54,837,738.97		11.83			9.226			358		80.90			601
9.500 - 9.999		440		54,941,379.99		11.86			9.752			358		81.88			595
10.000 - 10.499		211		26,610,246.34		5.74			10.239			358		80.25			586
10.500 - 10.999		189		23,333,482.85		5.04			10.718			358		79.61			581
11.000 - 11.499		131		16,039,857.18		3.46			11.220			358		76.85			568
11.500 - 11.999		113		10,843,533.40		2.34			11.728			358		77.71			569
12.000 - 12.499		62		4,730,355.93		1.02			12.228			357		77.12			559
12.500 - 12.999		50		2,979,668.57		0.64			12.679			356		79.48			567
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602

___________________

⁽¹⁾  The weighted average current Mortgage Rate of the Initial Group I Mortgage Loans as of the Cut-off Date was approximately 8.891% per annum.

Gross Margins of the Initial Adjustable-Rate Group I Mortgage Loans⁽¹⁾

Gross Margin (%)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
2.500 - 2.999		2	$	137,943.70		0.03	%		11.021	%		357		75.59	%		522
3.500 - 3.999		1		70,728.91		0.02			11.140			351		80.00			542
4.000 - 4.499		4		273,641.70		0.06			11.920			358		63.52			551
4.500 - 4.999		4		842,361.78		0.18			10.486			357		76.22			566
5.000 - 5.499		50		8,183,268.90		1.79			9.567			357		77.92			588
5.500 - 5.999		662		120,182,268.13		26.22			8.406			359		79.24			616
6.000 - 6.499		1,327		244,371,151.69		53.32			8.789			358		80.80			604
6.500 - 6.999		250		46,423,509.00		10.13			9.470			358		76.95			576
7.000 - 7.499		145		27,695,150.34		6.04			9.946			358		72.03			579
7.500 - 7.999		48		10,099,519.04		2.20			9.805			357		72.24			580
Total		2,493	$	458,279,543.19		100.00	%		8.870	%		358		79.21	%		602

___________________

⁽¹⁾  The weighted average Gross Margin of the Initial Adjustable-Rate Group I Mortgage Loans as of the Cut-off Date was approximately 6.177% per annum.

Month of Next Rate Adjustment for the Initial Adjustable-Rate Group I Mortgage Loans⁽¹⁾

Month of Next Rate Adjustment	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
January 1, 2008		3	$	489,832.23		0.11	%		9.019	%		351		60.30	%		596
February 1, 2008		10		1,674,964.61		0.37			9.836			352		75.08			572
March 1, 2008		3		427,752.48		0.09			8.936			353		71.58			585
April 1, 2008		9		1,520,744.44		0.33			7.816			354		71.62			631
May 1, 2008		38		7,655,402.35		1.67			8.999			355		78.18			581
June 1, 2008		90		16,326,465.30		3.56			9.490			356		77.92			583
July 1, 2008		317		59,906,154.76		13.07			9.215			357		79.58			586
August 1, 2008		558		100,249,360.13		21.88			9.358			358		79.29			592
September 1, 2008		1,215		218,525,165.56		47.68			8.642			359		79.83			611
October 1, 2008		1		152,000.00		0.03			8.100			360		80.00			635
March 1, 2009		2		449,223.60		0.10			7.607			353		80.63			572
April 1, 2009		2		646,971.08		0.14			8.687			354		79.73			564
June 1, 2009		4		724,706.71		0.16			8.885			356		73.71			576
July 1, 2009		7		848,226.79		0.19			9.872			357		78.61			598
August 1, 2009		15		2,956,636.61		0.65			9.399			358		75.71			584
September 1, 2009		48		9,587,104.44		2.09			8.222			359		79.09			619
January 1, 2011		1		210,238.63		0.05			6.900			351		75.36			688
February 1, 2011		1		375,816.80		0.08			7.750			352		70.00			652
May 1, 2011		1		101,709.82		0.02			8.875			355		30.00			670
June 1, 2011		2		367,343.56		0.08			9.319			356		63.51			595
July 1, 2011		15		3,832,163.90		0.84			8.221			357		79.10			596
August 1, 2011		29		5,557,758.77		1.21			8.703			358		75.40			596
September 1, 2011		121		25,588,158.13		5.58			7.987			359		77.18			628
August 1, 2021		1		105,642.49		0.02			12.250			358		70.00			608
Total		2,493	$	458,279,543.19		100.00	%		8.870	%		358		79.21	%		602

___________________

⁽¹⁾  The weighted average time until the next Adjustment Date for the Initial Adjustable-Rate Group I Mortgage Loans as of the Cut-off Date was approximately 25 months.

Maximum Mortgage Rates of the Initial Adjustable-Rate Group I Mortgage Loans⁽¹⁾

Maximum Mortgage Rate (%)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
9.000 - 9.499		1	$	219,539.28		0.05	%		6.200	%		358		75.00	%		555
9.500 - 9.999		3		760,106.28		0.17			6.880			359		71.43			668
10.000 - 10.499		3		867,702.39		0.19			7.303			359		80.80			646
10.500 - 10.999		3		760,587.95		0.17			7.785			359		78.89			598
11.000 - 11.499		1		107,852.57		0.02			8.350			359		80.00			627
11.500 - 11.999		11		2,714,729.96		0.59			6.488			358		71.30			658
12.000 - 12.499		25		6,835,803.94		1.49			6.579			359		74.01			619
12.500 - 12.999		77		20,950,403.28		4.57			6.899			358		75.40			625
13.000 - 13.499		112		30,317,679.05		6.62			7.281			358		77.22			622
13.500 - 13.999		231		58,461,726.49		12.76			7.778			358		78.24			619
14.000 - 14.499		291		64,715,453.56		14.12			8.236			358		79.86			608
14.500 - 14.999		412		82,861,601.33		18.08			8.751			358		80.66			601
15.000 - 15.499		312		53,746,789.70		11.73			9.226			358		80.93			602
15.500 - 15.999		334		53,136,292.07		11.59			9.717			358		80.83			594
16.000 - 16.499		197		26,072,309.65		5.69			10.233			358		79.86			585
16.500 - 16.999		184		23,317,568.00		5.09			10.696			358		79.10			581
17.000 - 17.499		125		15,019,160.77		3.28			11.212			358		76.83			571
17.500 - 17.999		102		10,216,258.89		2.23			11.714			358		77.27			566
18.000 - 18.499		46		5,035,930.66		1.10			12.080			358		74.36			545
18.500 - 18.999		23		2,162,047.37		0.47			12.564			358		72.42			546
Total		2,493	$	458,279,543.19		100.00	%		8.870	%		358		79.21	%		602

___________________

⁽¹⁾ The weighted average Maximum Mortgage Rate of the Initial Adjustable-Rate Group I Mortgage Loans as of the Cut-off Date was approximately 14.843% per annum.

Minimum Mortgage Rates of the Initial Adjustable-Rate Group I Mortgage Loans⁽¹⁾

Minimum Mortgage Rate (%)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
5.500 - 5.999		10	$	2,923,457.05		0.64	%		6.519	%		358		69.37	%		640
6.000 - 6.499		24		6,774,289.25		1.48			6.539			358		73.91			614
6.500 - 6.999		76		21,172,325.71		4.62			6.796			358		74.56			627
7.000 - 7.499		111		30,861,462.72		6.73			7.252			358		77.26			623
7.500 - 7.999		233		59,746,115.08		13.04			7.781			358		78.37			619
8.000 - 8.499		291		64,851,140.00		14.15			8.234			358		79.88			608
8.500 - 8.999		415		83,301,644.08		18.18			8.750			358		80.66			601
9.000 - 9.499		315		54,363,433.89		11.86			9.224			358		80.78			601
9.500 - 9.999		333		52,452,034.38		11.45			9.741			358		81.02			595
10.000 - 10.499		199		26,050,569.10		5.68			10.238			358		79.93			586
10.500 - 10.999		185		23,129,477.80		5.05			10.719			358		79.43			580
11.000 - 11.499		127		15,752,908.77		3.44			11.223			358		76.83			568
11.500 - 11.999		105		10,554,601.84		2.30			11.726			358		77.10			566
12.000 - 12.499		45		4,231,872.19		0.92			12.230			358		74.59			551
12.500 - 12.999		24		2,114,211.33		0.46			12.656			358		72.32			549
Total		2,493	$	458,279,543.19		100.00	%		8.870	%		358		79.21	%		602

___________________

⁽¹⁾ The weighted average Minimum Mortgage Rate of the Initial Adjustable-Rate Group I Mortgage Loans as of the Cut-off Date was approximately 8.860% per annum.

Initial Periodic Rate Caps of the Initial Adjustable-Rate Group I Mortgage Loans⁽¹⁾

Initial Periodic Rate Cap (%)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
2.000		25	$	6,120,650.29		1.34	%		8.104	%		357		70.79	%		593
3.000		2,468		452,158,892.90		98.66			8.880			358		79.33			602
Total		2,493	$	458,279,543.19		100.00	%		8.870	%		358		79.21	%		602

___________________

⁽¹⁾Relates solely to initial rate adjustments.

Subsequent Periodic Rate Caps of the Initial Adjustable-Rate Group I Mortgage Loans⁽¹⁾

Subsequent Periodic Rate Cap (%)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
1.000		2,491	$	457,808,090.06		99.90	%		8.869	%		358		79.21	%		602
1.500		2		471,453.13		0.10			9.605			358		83.58			594
Total		2,493	$	458,279,543.19		100.00	%		8.870	%		358		79.21	%		602

___________________

⁽¹⁾Relates to all rate adjustments subsequent to initial rate adjustments.

Credit Grade of the Initial Group I Mortgage Loans

Credit Grade	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
A		171	$	35,438,994.88		7.65	%		8.896	%		358		79.70	%		584
AA		341		66,646,568.12		14.38			8.856			358		79.85			587
AA+		1,794		298,015,325.54		64.31			8.628			358		80.96			614
B		140		24,698,797.09		5.33			9.756			358		76.43			571
C		151		25,285,610.02		5.46			10.067			358		71.02			577
CC		83		13,288,417.98		2.87			11.107			358		63.98			568
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602

Product Type of the Initial Group I Mortgage Loans

Product	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
15/15 6 MO LIBOR		1	$	105,642.49		0.02	%		12.250	%		358		70.00	%		608
2/13 6 MO LIBOR		1		58,250.48		0.01			9.350			179		80.00			647
2/28 6 MO LIBOR		1,493		238,209,146.63		51.41			9.384			358		78.82			599
2/28 6 MO LIBOR 40/30 Balloon		713		158,716,095.64		34.25			8.373			358		80.45			599
2/28 6 MO LIBOR IO		37		9,944,349.11		2.15			7.578			358		79.39			665
3/27 6 MO LIBOR		43		7,542,866.74		1.63			8.831			358		75.82			606
3/27 6 MO LIBOR 40/30 Balloon		33		7,013,502.49		1.51			8.385			358		79.93			595
3/27 6 MO LIBOR IO		2		656,500.00		0.14			7.685			359		87.61			722
5/25 6 MO LIBOR		71		12,851,695.63		2.77			8.874			358		75.26			615
5/25 6 MO LIBOR 40/30 Balloon		88		20,087,958.86		4.34			7.850			359		78.38			616
5/25 6 MO LIBOR IO		11		3,093,535.12		0.67			6.848			359		72.38			664
Fixed Rate 15 Yr		1		16,776.92		0.00			12.000			175		95.00			602
Fixed Rate 20 Yr		3		98,314.35		0.02			11.380			237		100.00			630
Fixed Rate 30 Yr		183		4,979,079.17		1.07			10.772			357		99.31			607
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602

Historical Delinquency of the Initial Group I Mortgage Loans Since Origination

Historical Delinquency	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
30 - 59 Days (times)
0		2,675	$	462,993,229.00		99.92	%		8.890	%		358		79.43	%		602
1		4		330,628.66		0.07			10.317			355		83.56			547
2		1		49,855.97		0.01			12.350			351		100.00			594
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602
60 - 89 Days (times)
0		2,679	$	463,323,857.66		99.99	%		8.891	%		358		79.43	%		602
1		1		49,855.97		0.01			12.350			351		100.00			594
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602
90 - 119 Days (times)
0		2,679	$	463,323,857.66		99.99	%		8.891	%		358		79.43	%		602
1		1		49,855.97		0.01			12.350			351		100.00			594
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602
120+ Days (times)
0		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602

Mortgage Insurance for the Initial Group I Mortgage Loans

Mortgage Insurer	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
No MI		2,374	$	385,131,864.74		83.11	%		8.948	%		358		77.95	%		600
MGIC		306		78,241,848.89		16.89			8.611			358		86.76			614
Total		2,680	$	463,373,713.63		100.00	%		8.891	%		358		79.43	%		602

Initial Group II Mortgage Loans Statistics

The following statistical information, unless otherwise specified, is based upon percentages of the Principal Balances of the Initial Group II Mortgage Loans as of the Cut-off Date.

Approximately 40.92% of the Initial Group II Mortgage Loans had loan-to-value ratios at origination in excess of 80%. Approximately 7.62% of the Initial Group II Mortgage Loans had a loan-to-value ratio at origination in excess of 90% and the weighted average loan-to-value ratio of the Initial Group II Mortgage Loans at origination was approximately 81.58%. There can be no assurance that the loan-to-value ratio of any Mortgage Loan determined at any time after origination is less than or equal to its original loan-to-value ratio. Additionally, the Originator’s determination of the value of a Mortgaged Property used in the calculation of the loan-to-value ratios of the Mortgage Loans may differ from the appraised value of such Mortgaged Property or the actual value of such Mortgaged Property. The loan-to-value ratio of any Initial Group II Mortgage Loan that is a second lien Mortgage Loan is calculated based on the aggregate principal balance of such second lien Mortgage Loan and any senior lien mortgage loan.

Substantially all of the Initial Group II Mortgage Loans have a Due Date of the first day of the month.

The weighted average remaining term to maturity of the Initial Group II Mortgage Loans is approximately 358months as of the Cut-off Date. None of the Initial Group II Mortgage Loans had a first Due Date prior to February 2006 or later than November 2006 or will have a remaining term to maturity of less than 179 months or greater than 360 months as of the Cut-off Date. The latest maturity date of any Initial Group II Mortgage Loan is October 2036.

The average Principal Balance of the Initial Group II Mortgage Loans at origination was approximately $224,224. The average Principal Balance of the Initial Group II Mortgage Loans as of the Cut-off Date was approximately $224,061. No Initial Group II Mortgage Loan had a Principal Balance as of the Cut-off Date of greater than approximately $2,166,816 or less than approximately $15,020.

The Initial Group II Mortgage Loans had Mortgage Rates as of the Cut-off Date of not less than 5.700% per annum and not more than 14.850% per annum and the weighted average Mortgage Rate was approximately 8.643% per annum. As of the Cut-off Date, the Initial Adjustable-Rate Group II Mortgage Loans had Gross Margins ranging from 4.000% to 9.750%, Minimum Mortgage Rates ranging from 5.500% per annum to 14.300% per annum and Maximum Mortgage Rates ranging from 9.600% per annum to 20.300% per annum. As of the Cut-off Date, the Initial Adjustable-Rate Group II Mortgage Loans had a weighted average Gross Margin of approximately 6.122% per annum, a weighted average Minimum Mortgage Rate of approximately 8.351% per annum and a weighted average Maximum Mortgage Rate of approximately 14.372% per annum. The latest next Adjustment Date following the Cut-off Date on any Initial Adjustable-Rate Group II Mortgage Loan occurs in October 2021, and the weighted average time until the next Adjustment Date for the Initial Adjustable-Rate Group II Mortgage Loans following the Cut-off Date is approximately 25 months.

The Initial Group II Mortgage Loans are expected to have the following characteristics as of the Cut-off Date (the sum in any column may not equal the total indicated due to rounding):

Cut-off Date Principal Balances of the Initial Group II Mortgage Loans⁽¹⁾

Principal Balance ($)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
0.01 - 50,000.00		628	$	19,477,471.07		3.63	%		12.558	%		357		99.18	%		595
50,000.01 - 100,000.00		347		24,957,406.40		4.65			11.361			357		88.68			604
100,000.01 - 150,000.00		335		41,405,578.31		7.72			9.559			358		82.11			598
150,000.01 - 200,000.00		203		35,305,084.77		6.58			8.989			358		81.42			605
200,000.01 - 250,000.00		148		32,889,338.10		6.13			8.682			359		81.88			606
250,000.01 - 300,000.00		108		29,775,272.88		5.55			8.376			358		81.91			611
300,000.01 - 350,000.00		97		31,563,677.69		5.88			8.198			358		82.49			608
350,000.01 - 400,000.00		59		22,193,832.55		4.14			7.998			358		80.81			625
400,000.01 - 450,000.00		85		36,768,395.47		6.85			8.249			358		81.96			609
450,000.01 - 500,000.00		90		42,937,367.78		8.00			8.117			358		79.77			612
500,000.01 - 550,000.00		55		28,883,729.66		5.38			8.088			359		80.99			614
550,000.01 - 600,000.00		42		24,116,625.17		4.49			8.287			358		83.83			611
600,000.01 - 650,000.00		37		23,211,822.14		4.33			7.999			358		80.34			625
650,000.01 - 700,000.00		34		22,911,388.83		4.27			8.279			358		83.50			618
700,000.01 - 750,000.00		24		17,434,838.97		3.25			8.096			358		83.96			630
750,000.01 - 800,000.00		19		14,749,142.39		2.75			8.198			358		85.87			612
800,000.01 - 850,000.00		13		10,780,865.62		2.01			8.040			358		78.06			604
850,000.01 - 900,000.00		12		10,494,079.88		1.96			8.699			357		78.87			610
900,000.01 - 950,000.00		6		5,631,426.92		1.05			7.906			358		79.69			612
950,000.01 - 1,000,000.00		12		11,738,435.88		2.19			8.189			358		77.62			618
1,000,000.01+		41		49,400,530.98		9.21			7.780			358		70.66			624
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612

___________________

⁽¹⁾The average Cut-off Date Principal Balance of the Initial Group II Mortgage Loans was approximately $224,061.

Credit Scores for the Initial Group II Mortgage Loans⁽¹⁾

Credit Score	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
500 - 524		46	$	12,940,014.25		2.41	%		9.889	%		357		77.08	%		514
525 - 549		39		14,832,372.21		2.76			9.411			357		74.68			539
550 - 574		216		46,783,361.98		8.72			9.097			358		80.99			564
575 - 599		1,029		155,442,987.83		28.97			9.074			358		82.76			587
600 - 624		549		130,925,872.55		24.40			8.467			358		82.61			611
625 - 649		248		85,768,564.66		15.98			8.087			358		81.18			636
650 - 674		131		49,341,749.74		9.19			8.175			358		78.31			661
675 - 699		62		19,077,946.99		3.56			8.004			358		83.73			686
700+		65		20,271,861.08		3.78			8.040			359		82.82			732
None		10		1,241,580.17		0.23			10.697			358		79.79			0
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612

___________________

⁽¹⁾The weighted average credit score of the Initial Group II Mortgage Loans that had credit scores was approximately 612.

Original Terms to Maturity of the Initial Group II Mortgage Loans⁽¹⁾

Original Term (months)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
180		1	$	74,787.69		0.01	%		8.250	%		179		51.72	%		657
240		3		88,352.00		0.02			12.861			237		100.00			605
360		2,391		536,463,171.77		99.97			8.643			358		81.58			612
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612

___________________

⁽¹⁾The weighted average original term to maturity of the Initial Group II Mortgage Loans was approximately 360 months.

Remaining Terms to Maturity of the Initial Group II Mortgage Loans⁽¹⁾

Remaining Term (months)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
121-180		1	$	74,787.69		0.01	%		8.250	%		179		51.72	%		657
181-240		3		88,352.00		0.02			12.861			237		100.00			605
301-360		2,391		536,463,171.77		99.97			8.643			358		81.58			612
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612

___________________

⁽¹⁾The weighted average remaining term to maturity of the Initial Group II Mortgage Loans was approximately 358 months.

Property Types of the Initial Group II Mortgage Loans

Property Type	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
2-4 Units Attached		17	$	8,697,796.64		1.62	%		8.629	%		359		82.02	%		656
2-4 Units Detached		75		28,420,478.10		5.30			8.670			358		82.69			627
Condo Conversion Attached		4		421,285.48		0.08			10.557			358		87.44			599
Condo High-Rise Attached		5		1,984,158.87		0.37			8.413			359		83.93			648
Condo Low-Rise Attached		61		11,834,520.77		2.21			9.319			358		82.71			617
Condo Low-Rise Detached		1		39,774.51		0.01			13.350			357		100.00			604
Manufactured Housing		2		286,402.41		0.05			10.207			351		85.00			622
PUD Attached(1)		29		4,767,272.30		0.89			8.621			358		86.79			630
PUD Detached(1)		402		78,147,820.91		14.56			8.775			358		82.25			605
Single Family Attached		51		11,797,803.46		2.20			8.362			358		82.02			613
Single Family Detached		1,748		390,228,998.01		72.72			8.601			358		81.22			610
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612

___________________

⁽¹⁾PUD refers to a home or “unit” in a Planned Unit Development.

Occupancy Status of the Initial Group II Mortgage Loans⁽¹⁾

Occupancy Status	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
Non-owner		86	$	21,638,649.61		4.03	%		9.389	%		358		81.86	%		641
Primary		2,299		507,699,741.70		94.61			8.615			358		81.74			610
Second Home		10		7,287,920.15		1.36			8.393			358		69.44			607
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612

___________________

⁽¹⁾Occupancy as represented by the mortgagor at the time of origination.

Purpose of the Initial Group II Mortgage Loans

Purpose	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
Cash Out Refinance		606	$	268,562,865.98		50.05	%		8.197	%		358		79.05	%		612
Purchase		1,706		244,768,233.67		45.61			9.147			358		84.55			612
Rate/Term Refinance		83		23,295,211.81		4.34			8.494			358		79.47			598
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612

Combined Original Loan-to-Value Ratios of the Initial Group II Mortgage Loans⁽¹⁾⁽²⁾

Combined Original Loan-to-Value Ratio (%)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
0.01 - 49.99		10	$	3,439,245.22		0.64	%		8.583	%		357		44.73	%		606
50.00 - 54.99		6		3,180,183.88		0.59			7.915			353		53.01			543
55.00- 59.99		12		4,841,520.32		0.90			7.752			358		57.95			641
60.00- 64.99		32		13,426,256.23		2.50			7.870			358		62.38			618
65.00- 69.99		54		28,503,119.00		5.31			7.724			358		66.89			615
70.00- 74.99		63		34,237,895.44		6.38			7.992			358		71.61			615
75.00- 79.99		108		43,319,262.25		8.07			8.348			358		76.88			598
80.00		792		186,073,825.44		34.67			8.523			359		80.00			610
80.01- 84.99		59		24,461,802.95		4.56			8.176			358		83.60			616
85.00- 89.99		139		59,539,553.13		11.10			8.152			358		86.02			617
90.00- 94.99		280		95,264,811.15		17.75			8.669			358		90.00			613
95.00- 99.99		30		2,943,923.16		0.55			10.361			357		95.44			623
100.00		810		37,394,913.29		6.97			12.227			357		100.00			614
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612

___________________

⁽¹⁾ The weighted average combined original loan-to-value ratio of the Initial Group II Mortgage Loans as of the Cut-off Date was approximately 81.58%.

⁽²⁾  For a description of the determination of loan-to-value ratio by the Originator see “The Originator and Sponsor” in this prospectus supplement.

Geographic Distribution of the Mortgaged Properties related to the Initial Group II Mortgage Loans⁽¹⁾

Location	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
Alabama		19	$	1,353,092.27		0.25	%		10.338	%		358		87.27	%		600
Arizona		49		11,261,466.88		2.10			8.617			358		82.44			610
Arkansas		7		407,533.25		0.08			10.786			358		87.28			595
California		341		169,074,531.47		31.51			7.961			358		81.33			614
Colorado		40		6,179,263.07		1.15			9.234			358		81.84			615
Connecticut		22		5,609,918.21		1.05			8.238			358		79.34			616
Delaware		1		223,781.14		0.04			7.725			359		70.00			600
District of Columbia		5		3,624,389.23		0.68			8.855			357		58.55			566
Florida		252		50,870,094.83		9.48			9.025			358		82.53			610
Georgia		84		12,489,762.64		2.33			9.201			358		78.49			614
Hawaii		7		3,351,035.18		0.62			7.285			359		75.53			633
Idaho		11		2,006,912.56		0.37			8.071			359		84.31			616
Illinois		51		5,462,793.30		1.02			10.221			358		86.19			602
Indiana		34		2,945,410.13		0.55			9.668			357		85.79			609
Iowa		13		1,087,873.53		0.20			9.691			358		80.86			625
Kansas		6		146,166.54		0.03			13.890			360		100.00			591
Kentucky		19		1,944,458.23		0.36			9.589			359		86.35			602
Louisiana		25		2,567,698.71		0.48			9.831			357		84.52			597
Maine		16		3,320,210.87		0.62			9.152			358		80.00			602
Maryland		35		8,741,357.07		1.63			8.295			358		79.76			617
Massachusetts		79		30,255,527.78		5.64			8.477			358		80.83			627
Michigan		99		11,318,547.02		2.11			9.528			358		80.43			594
Minnesota		17		4,269,752.84		0.80			8.796			359		84.10			620
Mississippi		10		1,331,399.86		0.25			9.079			359		83.19			609
Missouri		32		3,299,604.08		0.61			10.334			359		83.90			589
Nebraska		2		83,180.45		0.02			12.925			356		88.13			594
Nevada		43		9,065,644.51		1.69			8.937			359		84.33			602
New Hampshire		16		3,012,250.11		0.56			9.509			358		80.52			586
New Jersey		65		25,059,609.58		4.67			8.820			358		79.25			612
New York		121		44,849,388.84		8.36			8.300			358		81.80			633
North Carolina		52		6,466,096.68		1.20			9.666			358		82.77			616
North Dakota		1		121,293.29		0.02			8.370			359		80.00			604
Ohio		72		5,419,718.07		1.01			10.147			358		85.82			599
Oklahoma		24		1,657,785.30		0.31			9.984			358		86.18			598
Oregon		14		5,806,318.04		1.08			8.459			358		79.98			624
Pennsylvania		54		7,904,560.84		1.47			9.201			357		82.28			589
Rhode Island		21		4,727,389.88		0.88			8.929			358		80.80			610
South Carolina		31		2,572,902.97		0.48			9.941			358		85.97			613
South Dakota		1		25,126.74		0.00			14.200			357		100.00			582
Tennessee		20		2,183,033.75		0.41			9.197			358		80.96			600
Texas		439		48,132,322.87		8.97			9.178			358		82.93			597
Utah		15		3,224,127.57		0.60			8.672			359		83.72			616
Vermont		3		122,111.02		0.02			13.122			357		71.49			567
Virginia		76		13,704,316.24		2.55			9.273			358		81.67			599
Washington		32		7,820,011.05		1.46			9.014			358		82.74			609
Wisconsin		14		1,194,559.49		0.22			9.980			358		85.70			592
Wyoming		5		331,983.48		0.06			10.001			358		87.42			590
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612

___________________

⁽¹⁾The greatest ZIP Code geographic concentration of Initial Group II Mortgage Loans was approximately 0.44% in the 91381 ZIP Code.

Documentation Levels of the Initial Group II Mortgage Loans⁽¹⁾

Documentation Level	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
Business Bank Statements		32	$	9,037,978.85		1.68	%		8.720	%		359		81.92	%		596
Full Documentation		1,785		293,845,043.89		54.76			8.763			358		83.17			601
Lite Documentation		11		4,861,565.89		0.91			8.499			358		84.50			613
No Documentation		18		7,072,684.77		1.32			8.459			358		75.34			681
Stated Income Documentation		549		221,809,038.06		41.33			8.491			358		79.59			625
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612

___________________

⁽¹⁾For a description of each Documentation Level, see “The Originator and Sponsor” in this prospectus supplement.

Current Mortgage Rates of the Initial Group II Mortgage Loans⁽¹⁾

Current Mortgage Rate (%)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
5.500 - 5 .999		8	$	5,519,303.57		1.03	%		5.741	%		359		71.61	%		665
6.000 - 6.499		20		9,148,915.59		1.70			6.214			359		76.64			643
6.500 - 6.999		69		31,721,049.17		5.91			6.782			359		79.41			626
7.000 - 7.499		102		49,547,528.08		9.23			7.257			358		78.19			620
7.500 - 7.999		230		103,392,893.03		19.27			7.757			358		79.64			624
8.000 - 8.499		229		87,026,929.12		16.22			8.226			358		80.25			618
8.500 - 8.999		289		90,724,055.80		16.91			8.758			358		81.33			609
9.000 - 9.499		206		48,424,673.78		9.02			9.200			358		82.93			602
9.500 - 9.999		394		48,300,886.48		9.00			9.756			358		83.52			584
10.000 - 10.499		95		17,055,962.59		3.18			10.228			358		82.03			579
10.500 - 10.999		68		9,013,090.31		1.68			10.703			358		82.99			602
11.000 - 11.499		46		6,562,607.20		1.22			11.210			358		87.30			595
11.500 - 11.999		49		4,124,211.63		0.77			11.713			358		86.10			601
12.000 - 12.499		32		2,493,747.97		0.46			12.188			357		89.81			607
12.500 - 12.999		34		2,419,266.99		0.45			12.679			357		94.21			587
13.000 - 13.499		137		6,219,142.44		1.16			13.268			357		99.90			603
13.500 - 13.999		127		4,717,363.69		0.88			13.802			356		99.83			590
14.000 - 14.499		250		9,850,452.68		1.84			14.102			357		99.95			588
14.500 - 14.999		10		364,231.34		0.07			14.559			357		100.00			586
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612

___________________

⁽¹⁾  The weighted average current Mortgage Rate of the Initial Group II Mortgage Loans as of the Cut-off Date was approximately 8.643% per annum.

Gross Margins of the Initial Adjustable-Rate Group II Mortgage Loans⁽¹⁾

Gross Margin (%)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
4.000 - 4.499		6	$	1,160,870.27		0.23	%		7.620	%		359		81.11	%		651
5.000 - 5.499		10		4,512,812.31		0.90			6.931			358		68.74			616
5.500 - 5.999		561		155,468,322.50		30.99			8.116			359		80.30			619
6.000 - 6.499		832		283,294,964.67		56.47			8.370			358		81.01			614
6.500 - 6.999		96		36,215,131.78		7.22			9.109			358		78.42			579
7.000 - 7.499		28		7,333,253.05		1.46			9.094			357		76.91			615
7.500 - 7.999		20		7,683,938.32		1.53			8.922			356		79.93			589
8.000 - 8.499		16		4,646,171.75		0.93			9.514			357		72.45			560
8.500 - 8.999		4		680,176.66		0.14			9.808			357		78.87			623
9.000 - 9.499		2		267,653.91		0.05			10.216			357		78.43			567
9.500 - 9.999		1		434,670.98		0.09			10.750			358		62.14			533
Total		1,576	$	501,697,966.20		100.00	%		8.364	%		358		80.31	%		612

___________________

⁽¹⁾  The weighted average Gross Margin of the Initial Adjustable-Rate Group II Mortgage Loans as of the Cut-off Date was approximately 6.122% per annum.

Month of Next Rate Adjustment for the Initial Adjustable-Rate Group II Mortgage Loans⁽¹⁾

Month of Next Rate Adjustment	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
January 1, 2008		4	$	1,455,133.59		0.29	%		8.462	%		351		84.03	%		603
February 1, 2008		5		2,380,563.57		0.47			8.017			352		75.65			601
March 1, 2008		3		1,327,247.25		0.26			8.250			353		78.42			585
April 1, 2008		12		4,435,570.76		0.88			8.604			354		80.97			595
May 1, 2008		18		12,327,731.93		2.46			8.017			355		78.04			610
June 1, 2008		42		19,473,185.52		3.88			8.648			356		76.49			593
July 1, 2008		163		63,427,564.00		12.64			8.515			357		80.18			596
August 1, 2008		285		89,695,010.58		17.88			8.770			358		81.91			609
September 1, 2008		935		261,890,500.28		52.20			8.315			359		80.50			614
October 1, 2008		1		288,000.00		0.06			9.500			360		80.00			587
July 1, 2009		1		173,506.27		0.03			11.250			357		80.00			635
August 1, 2009		8		2,032,028.24		0.41			8.400			358		79.84			605
September 1, 2009		19		7,987,878.91		1.59			7.646			359		78.14			663
June 1, 2011		2		1,723,500.00		0.34			7.349			356		62.59			651
July 1, 2011		8		2,687,610.95		0.54			7.200			357		76.53			631
August 1, 2011		10		3,945,390.44		0.79			7.952			358		78.55			614
September 1, 2011		54		26,301,377.37		5.24			7.457			359		79.79			643
September 1, 2021		3		72,686.54		0.01			13.935			359		100.00			591
October 1, 2021		3		73,480.00		0.01			13.846			360		100.00			590
Total		1,576	$	501,697,966.20		100.00	%		8.364	%		358		80.31	%		612

___________________

⁽¹⁾  The weighted average time until the next Adjustment Date for the Initial Adjustable-Rate Group II Mortgage Loans as of the Cut-off Date was approximately 25 months.

Maximum Mortgage Rates of the Initial Adjustable-Rate Group II Mortgage Loans⁽¹⁾

Maximum Mortgage Rate (%)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
9.500 - 9.999		2	$	467,484.34		0.09	%		6.654	%		359		87.83	%		628
10.000 - 10.499		1		365,374.02		0.07			7.150			359		80.00			664
10.500 - 10.999		1		449,193.94		0.09			7.900			358		80.00			598
11.500 - 11.999		9		5,767,991.89		1.15			5.865			359		71.97			661
12.000 - 12.499		21		9,246,422.51		1.84			6.243			359		76.67			643
12.500 - 12.999		66		30,641,158.79		6.11			6.798			359		79.16			626
13.000 - 13.499		99		47,519,025.72		9.47			7.254			358		78.53			619
13.500 - 13.999		225		100,942,414.37		20.12			7.746			358		79.70			624
14.000 - 14.499		230		88,123,360.58		17.57			8.210			358		79.96			617
14.500 - 14.999		287		91,172,327.28		18.17			8.734			358		81.28			609
15.000 - 15.499		199		48,497,388.38		9.67			9.189			358		83.01			605
15.500 - 15.999		207		43,551,729.42		8.68			9.675			358		81.10			586
16.000 - 16.499		92		16,846,613.20		3.36			10.220			358		81.42			576
16.500 - 16.999		56		8,151,492.32		1.62			10.629			358		81.31			596
17.000 - 17.499		30		5,044,223.15		1.01			11.203			358		83.48			564
17.500 - 17.999		26		2,788,464.54		0.56			11.550			357		76.52			554
18.000 - 18.499		15		1,329,932.28		0.27			12.198			358		81.04			563
18.500 - 18.999		4		647,202.93		0.13			12.535			358		83.47			522
19.500 - 19.999		4		99,691.04		0.02			13.699			360		100.00			592
20.000 - 20.499		2		46,475.50		0.01			14.300			359		100.00			588
Total		1,576	$	501,697,966.20		100.00	%		8.364	%		358		80.31	%		612

___________________

⁽¹⁾ The weighted average Maximum Mortgage Rate of the Initial Adjustable-Rate Group II Mortgage Loans as of the Cut-off Date was approximately 14.372% per annum.

Minimum Mortgage Rates of the Initial Adjustable-Rate Group II Mortgage Loans⁽¹⁾

Minimum Mortgage Rate (%)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
5.500 - 5.999		12	$	7,058,360.97		1.41	%		6.138	%		358		73.44	%		666
6.000 - 6.499		21		9,231,651.77		1.84			6.238			359		76.67			643
6.500 - 6.999		69		31,747,715.98		6.33			6.795			359		79.37			625
7.000 - 7.499		101		49,085,128.08		9.78			7.256			358		78.17			620
7.500 - 7.999		231		103,875,352.28		20.70			7.768			358		79.75			624
8.000 - 8.499		230		87,382,259.10		17.42			8.237			358		80.15			617
8.500 - 8.999		285		89,572,867.58		17.85			8.762			358		81.22			609
9.000 - 9.499		199		47,908,696.72		9.55			9.199			358		82.85			603
9.500 - 9.999		203		41,898,506.26		8.35			9.730			358		81.14			583
10.000 - 10.499		91		16,716,746.83		3.33			10.227			358		81.67			577
10.500 - 10.999		54		7,731,792.35		1.54			10.695			358		82.61			596
11.000 - 11.499		30		5,044,223.15		1.01			11.203			358		83.48			564
11.500 - 11.999		25		2,321,363.38		0.46			11.713			358		75.82			560
12.000 - 12.499		15		1,329,932.28		0.27			12.198			358		81.04			563
12.500 - 12.999		4		647,202.93		0.13			12.535			358		83.47			522
13.500 - 13.999		4		99,691.04		0.02			13.699			360		100.00			592
14.000 - 14.499		2		46,475.50		0.01			14.300			359		100.00			588
Total		1,576	$	501,697,966.20		100.00	%		8.364	%		358		80.31	%		612

___________________

⁽¹⁾ The weighted average Minimum Mortgage Rate of the Initial Adjustable-Rate Group II Mortgage Loans as of the Cut-off Date was approximately 8.351% per annum.

Initial Periodic Rate Caps of the Initial Adjustable-Rate Group II Mortgage Loans⁽¹⁾

Initial Periodic Rate Cap (%)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
1.000		1	$	449,193.94		0.09	%		7.900	%		358		80.00	%		598
2.000		23		9,521,838.58		1.90			8.210			357		74.42			602
3.000		1,552		491,726,933.68		98.01			8.368			358		80.43			612
Total		1,576	$	501,697,966.20		100.00	%		8.364	%		358		80.31	%		612

___________________

⁽¹⁾Relates solely to initial rate adjustments.

Subsequent Periodic Rate Caps of the Initial Adjustable-Rate Group II Mortgage Loans⁽¹⁾

Periodic Rate Cap (%)	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
1.000		1,575	$	501,178,870.27		99.90	%		8.364	%		358		80.31	%		612
1.500		1		519,095.93		0.10			8.750			357		80.00			589
Total		1,576	$	501,697,966.20		100.00	%		8.364	%		358		80.31	%		612

___________________

⁽¹⁾Relates to all rate adjustments subsequent to initial rate adjustments.

Credit Grade of the Initial Group II Mortgage Loans

Credit Grade	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
A		76	$	28,431,212.58		5.30	%		8.454	%		358		78.27	%		583
AA		180		58,401,344.95		10.88			8.627			358		80.70			593
AA+		2,042		421,153,287.83		78.48			8.588			358		82.20			619
B		64		22,214,501.84		4.14			9.604			357		78.47			567
C		25		4,942,904.29		0.92			9.696			358		76.24			585
CC		8		1,483,059.97		0.28			10.793			358		66.20			598
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612

Product Type of the Initial Group II Mortgage Loans

Product	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
15/15 6 MO LIBOR		6	$	146,166.54		0.03	%		13.890	%		360		100.00	%		591
2/13 6 MO LIBOR		1		74,787.69		0.01			8.250			179		51.72			657
2/28 6 MO LIBOR		812		193,068,634.54		35.98			8.929			358		80.20			604
2/28 6 MO LIBOR 40/30 Balloon		435		182,116,686.76		33.94			8.176			358		80.49			606
2/28 6 MO LIBOR IO		220		81,440,398.49		15.18			7.874			358		81.17			627
3/27 6 MO LIBOR		15		4,615,943.88		0.86			8.404			359		77.68			640
3/27 6 MO LIBOR 40/30 Balloon		9		2,885,329.54		0.54			8.033			359		82.61			610
3/27 6 MO LIBOR IO		4		2,692,140.00		0.50			6.734			359		75.52			714
5/25 6 MO LIBOR		33		12,420,723.33		2.31			7.863			359		76.90			635
5/25 6 MO LIBOR 40/30 Balloon		17		8,839,657.56		1.65			7.668			359		80.64			621
5/25 6 MO LIBOR IO		24		13,397,497.87		2.50			7.021			358		78.67			655
Fixed Rate 20 Yr		3		88,352.00		0.02			12.861			237		100.00			605
Fixed Rate 30 Yr		816		34,839,993.26		6.49			12.648			357		99.74			605
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612

Historical Delinquency of the Initial Group II Mortgage Loans Since Origination

Historical Delinquency	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
30 - 59 Days (times)
0		2,392	$	535,028,599.35		99.70	%		8.645	%		358		81.59	%		612
1		2		871,982.00		0.16			8.265			356		74.82			573
2		1		725,730.11		0.14			7.750			351		80.00			596
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612
60 - 89 Days (times)
0		2,394	$	535,900,581.35		99.86	%		8.644	%		358		81.58	%		612
1		1		725,730.11		0.14			7.750			351		80.00			596
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612
90 - 119 Days (times)
0		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612
120+ Days (times)
0		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612

Mortgage Insurance for the Initial Group II Mortgage Loans

Mortgage Insurer	Number of Initial Mortgage Loans		Aggregate Principal Balance		Percentage of Aggregate Principal Balance of Mortgage Loans			Weighted Average Mortgage Rate			Weighted Average Stated Remaining Term (months)		Weighted Average Combined Original LTV			Weighted Average FICO
No MI		2,226	$	477,695,328.40		89.02	%		8.674	%		358		80.90	%		612
MGIC		169		58,930,983.06		10.98			8.390			358		87.09			611
Total		2,395	$	536,626,311.46		100.00	%		8.643	%		358		81.58	%		612

Conveyance of Additional Mortgage Loans, Subsequent Mortgage Loans and the Pre-Funding Accounts

The Group I Additional Mortgage Loans are expected to have an aggregate Principal Balance of approximately $46,337,358 and the Group II Additional Mortgage Loans are expected to have an aggregate Principal Balance of approximately $53,662,616 as of the related Cut-off Date. The Additional Mortgage Loans were originated prior to the Closing Date and will be included in the assets of the Trust on the Closing Date. In addition to the Closing Date Mortgage Loans, under and to the extent provided in the Pooling Agreement, the Trustee, on behalf of the Trust, will be obligated to purchase from the Depositor during the Funding Period (as defined herein), subject to the availability thereof, Subsequent Mortgage Loans secured by residential properties consisting of detached or attached one-to four-family dwelling units and individual condominium units. Each Subsequent Mortgage Loan will have been underwritten in accordance with the criteria set forth under “The Originator and Sponsor” herein. The Subsequent Mortgage Loans will be transferred to the Trustee, on behalf of the Trust, pursuant to subsequent transfer instruments (the “Subsequent Transfer Instruments”) between the Depositor and the Trustee. In connection with the purchase of Subsequent Mortgage Loans on such dates of transfer (the “Subsequent Transfer Dates”), the Trustee, on behalf of the Trust, will be required to pay to the Depositor from amounts on deposit in the Group I Pre-Funding Account or the Group II Pre-Funding Account, as applicable, a cash purchase price of 100% of the principal balance thereof. The Depositor will designate the later of (i) the first day of the month in which the related Subsequent Transfer Date occurs and (ii) the origination date of such Subsequent Mortgage Loan as the cut-off date with respect to each of the related Subsequent Mortgage Loans (the “Subsequent Cut-off Date”). The amount paid from the related Pre-Funding Account on each Subsequent Transfer Date will not include accrued interest on the related Subsequent Mortgage Loans. Following each Subsequent Transfer Date, the aggregate Principal Balance of the Group I Mortgage Loans or the Group II Mortgage Loans, as applicable, will increase by an amount equal to the aggregate Principal Balance of the related Subsequent Mortgage Loans so purchased and the amount in the related Pre-Funding Account will decrease accordingly.

An account (the “Group I Pre-Funding Account”) will be established by the Trustee for the benefit of the Certificateholders and funded on the Closing Date by the Depositor with an amount equal to approximately $185,349,481 (the “Original Group I Pre-Funded Amount”) to provide the Trustee, on behalf of the Trust, with funds to purchase Subsequent Group I Mortgage Loans. During the period (the “Funding Period”) from the Closing Date until the earliest of (i) the date on which the amount on deposit in the Pre-Funding Accounts is reduced to zero or (ii) January 23, 2007, the Original Group I Pre-Funded Amount will be reduced by the amount used to purchase Subsequent Group I Mortgage Loans for Loan Group I in accordance with the Pooling Agreement. Any investment income on funds in the Group I Pre-Funding Account will either be transferred to the related Interest Coverage Account or paid to the Depositor or its designee as provided in the Pooling Agreement.

An account (the “Group II Pre-Funding Account”; together with the Group I Pre-Funding Account, the “Pre-Funding Accounts”) will be established by the Trustee for the benefit of the Certificateholders and funded on the Closing Date by the Depositor with an amount equal to approximately $214,650,519 (the “Original Group II Pre-Funded Amount”; together with the Original Group I Pre-Funded Amount, the “Original Pre-Funded Amounts”) to provide the Trustee, on behalf of the Trust, with funds to purchase Subsequent Group II Mortgage Loans. During the Funding Period, the Original Group II Pre-Funded Amount will be reduced by the amount used to purchase Subsequent Group II Mortgage Loans for Loan Group II in accordance with the Pooling Agreement. Any investment income on funds in the Group II Pre-Funding Account will be either transferred to the related Interest Coverage Account or paid to the Depositor or its designee as provided in the Pooling Agreement.

Any conveyance of Additional Mortgage Loans on the Closing Date and Subsequent Mortgage Loans on a Subsequent Transfer Date is subject to certain conditions including, but not limited to the following and subject to a variance of plus or minus 5%: (a) each such Additional Mortgage Loan and Subsequent Mortgage Loan must satisfy the representations and warranties specified in the related Subsequent Transfer Instrument and the Pooling Agreement; (b) the Depositor will not select such Additional Mortgage Loans or Subsequent Mortgage Loans in a manner that it believes to be adverse to the interests of the Certificateholders; (c) the Depositor will deliver certain opinions of counsel with respect to the validity of the conveyance of such Additional Mortgage Loans and Subsequent Mortgage Loans, (d) the NIMS Insurer, if any, must consent to such conveyance and (e) as of the related Cut-off Date or Subsequent Cut-off Date, each such Additional Mortgage Loan or Subsequent Mortgage Loan will satisfy the following criteria: (i) the Additional Mortgage Loan or Subsequent Mortgage Loan may not be 30 or more days delinquent as of the last day of the calendar month preceding the related Cut-off Date or Subsequent Cut-off Date; (ii) the original term to stated maturity of the Additional Mortgage Loan or Subsequent Mortgage Loan will not be less than 180 months and will not exceed 360 months; (iii) the Additional Mortgage Loan or Subsequent Mortgage Loan may not provide for negative amortization; (iv) the Additional Mortgage Loan or Subsequent Mortgage Loan will not have a loan-to-value ratio greater than 100.00%; (v) such Additional Mortgage Loans or Subsequent Mortgage Loans will have, as of the related Cut-off Date or Subsequent Cut-off Date, a weighted average term since origination not in excess of 6 months; (vi) the Additional Mortgage Loan or Subsequent Mortgage Loan, if a fixed-rate Mortgage Loan, will have a Mortgage Rate that is not less than approximately 6.250% per annum or greater than approximately 15.250% per annum; (vii) the Additional Mortgage Loan or Subsequent Mortgage Loan will have been serviced by the Servicer since origination or the date that servicing was transferred with respect to any Mortgage Loan acquired by the Originator after its origination date; (viii) each of the Additional Mortgage Loans or Subsequent Mortgage Loans will have a first payment date occurring on or before February 2007 and will include 30 days’ interest thereon; (ix) if the Additional Mortgage Loan or Subsequent Mortgage Loan is an adjustable-rate Mortgage Loan, such Additional Mortgage Loan or Subsequent Mortgage Loan will have a Gross Margin not less than approximately 2.500% per annum, will have a Maximum Mortgage Rate not less than approximately 8.750% per annum and will have a Minimum Mortgage Rate not less than approximately 5.000% per annum and (x) the Additional Mortgage Loan or Subsequent Mortgage Loan will have been underwritten in accordance with the criteria set forth under “The Originator and Sponsor” herein.

Following the purchase of Subsequent Group I Mortgage Loans by the Trust, at the end of the Funding Period all of the Group I Mortgage Loans (including the Subsequent Group I Mortgage Loans) and subject to a variance of plus or minus 5%: (i) will have a weighted average original term to stated maturity of not more than 360 months; (ii) will have a weighted average Mortgage Rate of not less than 8.250% per annum and not more than 9.250% per annum; (iii) will have a weighted average loan-to-value ratio of not more than 82.00%; (iv) will have no Mortgage Loan with a Principal Balance which does not conform to Fannie Mae and Freddie Mac principal balance guidelines; (v) will consist of Mortgage Loans with prepayment charges representing no less than approximately 68.00% of the Group I Mortgage Loans; (vi) will have second lien Mortgage Loans comprising no more than 5.00% of the Group I Mortgage Loans; (vii) have fixed-rate Mortgage Loans comprising no more than 5.00% of the Group I Mortgage Loans; (viii) will have a weighted average FICO score of not less than 590 and (ix) will consist of Mortgage Loans covered by the PMI Policy representing no less than approximately 14.00% of the Group I Mortgage Loans. In addition, the adjustable-rate Group I Mortgage Loans will have a weighted average Gross Margin not less than 5.750% per annum. For purposes of the calculations described in this paragraph, percentages of the Group I Mortgage Loans will be based on the Principal Balance of the Initial Group I Mortgage Loans as of the Cut-off Date and the Principal Balance of the Subsequent Group I Mortgage Loans as of the related Subsequent Cut-off Date.

Following the purchase of Subsequent Group II Mortgage Loans by the Trust, at the end of the Funding Period all of the Group II Mortgage Loans (including the Subsequent Group II Mortgage Loans) and subject to a variance of plus or minus 5%: (i) will have a weighted average original term to stated maturity of not more than 360 months; (ii) will have a weighted average Mortgage Rate of not less than 8.250% per annum and not more than 9.250% per annum; (iii) will have a weighted average loan-to-value ratio of not more than 83.00%; (iv) will have no Mortgage Loan with a Principal Balance in excess of $2,200,000; (v) will consist of Mortgage Loans with prepayment charges representing no less than approximately 70.00% of the Group II Mortgage Loans; (vi) will have second lien Mortgage Loans comprising no more than 8.00% of the Group II Mortgage Loans; (vii) have fixed-rate Mortgage Loans comprising no more than 8.00% of the Group II Mortgage Loans; (viii) will have a weighted average FICO score of not less than 600 and (ix) will consist of Mortgage Loans covered by the PMI Policy representing no less than approximately 8.50% of the Group II Mortgage Loans. In addition, the adjustable-rate Group II Mortgage Loans will have a weighted average Gross Margin not less than 5.750% per annum. For purposes of the calculations described in this paragraph, percentages of the Group II Mortgage Loans will be based on the Principal Balance of the Initial Group II Mortgage Loans as of the Cut-off Date and the Principal Balance of the Subsequent Group II Mortgage Loans as of the related Subsequent Cut-off Date.

Notwithstanding the foregoing, any Subsequent Mortgage Loan may be rejected by (i) the NIMS Insurer, if any, or (ii) Moody’s, Fitch or S&P if the inclusion of such Subsequent Mortgage Loan would adversely affect the ratings on any class of Class A and Mezzanine Certificates and variances (as described above) regarding the characteristics of the Subsequent Mortgage Loans set forth above will be permitted. The final characteristics of the Mortgage Loans (including the Additional Mortgage Loans and Subsequent Mortgage Loans) will be reflected in a Form 8-K which will be filed within 15 days of the end of the Funding Period.

STATIC POOL INFORMATION

The Depositor has made available, on its internet website located at http://www.oomc.com/StaticPoolData.htm, static pool information about prior securitized pools of mortgage loans of the Originator beginning in 2001, which information is incorporated by reference into this prospectus supplement. The static pool information includes (i) information about the original characteristics of each prior securitized pool as of the cut-off date for that pool and (ii) delinquency, loss and prepayment information about each prior securitized pool in monthly increments from the related cut-off date through August 2006. The static pool information about securitized pools of mortgage loans of the Originator that were established before January 1, 2006 is not deemed to be a part of this prospectus supplement, the prospectus or the related registration statement.

There can be no assurance that the rates of delinquencies, losses and prepayments experienced by the prior securitized pools will be comparable to delinquencies, losses and prepayments expected to be experienced by the mortgage loans owned by the trust.

THE ISSUING ENTITY

Option One Mortgage Loan Trust 2006-3 (the “Issuing Entity”) will be a New York common law trust established pursuant to the Pooling Agreement. The Issuing Entity will not own any assets other than the Mortgage Loans and the other assets described under “The Pooling Agreement.” The Issuing Entity will not have any liabilities other than those incurred in connection with the Pooling Agreement and any related agreement. The Issuing Entity will not have any directors, officers, or other employees. No equity contribution will be made to the Issuing Entity by the Sponsor, the Depositor or any other party, and the Issuing Entity will not have any other capital. The fiscal year end of the Issuing Entity will be December 31. The Issuing Entity will act through the parties to the Pooling Agreement as set forth therein.

THE DEPOSITOR

Option One Mortgage Acceptance Corporation (the “Depositor”) is a limited-purpose direct or indirect wholly-owned subsidiary of Option One Mortgage Corporation. The Depositor was incorporated in the State of Delaware on October 7, 1996. The depositor was organized for the purpose of serving as a private secondary mortgage market conduit. The depositor does not have, nor is it expected in the future to have, any significant assets.

The Depositor maintains its principal office at 3 Ada, Irvine, California 92618. Its telephone number is (949) 790-8300.

The Depositor has been engaged in the securitization of mortgage loans since its incorporation in 1992. The Depositor is generally engaged in the business of acting as a depositor of one or more trust funds that may issue or cause to be issued, sell and deliver bonds or other evidences of indebtedness or certificates of interest that are secured by, or represent an interest in mortgage loans. The Depositor acquires mortgage loans and other assets for inclusion in securitizations from the Sponsor.

The certificate of incorporation of the Depositor provides that the Depositor may not conduct any activities other than those related to the issue and sale of one or more series of securities and to act as Depositor of trusts that may issue and sell securities.

After issuance and registration of the Certificates, the Depositor will have no duties or responsibilities with respect to the Mortgage Loans or the Certificates, other than to arrange for derivative instruments or replacement instruments to be included in the Trust, to appoint replacements to certain transaction participants, to provide notices to certain parties under the Pooling Agreement, to execute any required reports and filings under the Securities Exchange Act of 1934, as amended, or to provide requested information to the various transaction participants.

THE ORIGINATOR AND SPONSOR

The information set forth in the following paragraphs has been provided by Option One Mortgage Corporation (“Option One”).

General

Option One, a California corporation headquartered in Irvine, California, is the originator of the Mortgage Loans (the “Originator”) and will serve as the sponsor (the “Sponsor”) of the transaction.

Option One was incorporated in 1992, commenced receiving applications for mortgage loans under its lending program in February 1993 and began funding such mortgage loans indirectly in the same month. The principal business of Option One is the origination, sale and servicing of non-prime mortgage loans. Option One is a wholly-owned subsidiary of Block Financial, which is in turn a wholly-owned subsidiary of H&R Block Group, Inc., a wholly-owned subsidiary of H&R Block, Inc. (“H&R Block”). Borrowers who qualify under the Originator’s underwriting guidelines generally have equity in their property and repayment ability but may have a record of major derogatory credit items such as outstanding judgments or prior bankruptcies. The Originator originates mortgage loans based on its underwriting guidelines and does not determine whether such mortgage loans would be acceptable for purchase by Fannie Mae or Freddie Mac.

The following table details the Originator’s consolidated originations for the fiscal years ended April 30, 2004, 2005 and 2006 and the three months ended July 31, 2006:

	Years Ended April 30,
		2004		2005		2006		For the Three Months Ended July 31, 2006
	(Dollars in Thousands)
Total	$	23,256,013	$	31,001,724	$	40,779,763	$	8,051,945

Information regarding the Originator’s non-prime originations is as follows:

	Years Ended April 30,
	2004			2005			2006			For the Three Months Ended July 31, 2006
Mortgage Loan type:	(Dollars in Thousands)
2-year ARM		63.4	%		61.6	%		43.8	%		39.9	%
3-year ARM		5.2	%		4.0	%		1.9	%		3.1	%
Fixed 1st		28.7	%		17.7	%		12.7	%		9.1	%
Fixed 2nd		1.6	%		3.8	%		4.9	%		1.0	%
Interest only		0.7	%		12.6	%		21.1	%		11.7	%
40-Year		0.0	%		0.0	%		13.4	%		33.0	%
Other		0.4	%		0.3	%		2.2	%		2.1	%
Loan purpose:
Cash-out refinance		67.1	%		63.5	%		58.8	%		57.0	%
Purchase		26.0	%		30.8	%		35.0	%		36.6	%
Rate or term refinance		6.9	%		5.7	%		6.3	%		6.4	%
Loan characteristics:
Average loan size	$	151		$	160		$	217		$	205
Weighted-average loan-to-value		78.1	%		78.9	%		80.6	%		82.5	%
Weighted-average FICO score		608			614			622			614

Securitization of mortgage loans originated by the Originator is an integral part of the Sponsor’s management of its capital. Since 1996, the Sponsor has engaged in securitizations of mortgage loans originated by the Originator through the Depositor. The Sponsor participated with the Underwriters in structuring the securitization transaction.

The following table shows, for each of the most recent three years, the aggregate principal balance of all mortgage loans originated by the Originator (including those purchased by the Originator from correspondent lenders) during that fiscal year and the portion of those mortgage loans securitized during that year through the Depositor.

Origination and Securitization of Option One Mortgage Loans

	Years Ended April 30,
	2004			2005			2006			For the three months ended July 31, 2006
	(Dollar Amounts in thousands)
Aggregate Principal Balance of Mortgage Loans Originated by Originator	$	23,256,013		$	31,001,724		$	40,779,763		$	8,051,945
% of Mortgage Loans Securitized		24	%		8	%		23	%		13	%

With respect to approximately 39% of the securitizations organized by the Sponsor since 2000, a trigger event has occurred with respect to the loss and delinquency experience of the mortgage loans included in the related trust, resulting in a sequential distribution of principal to the related offered certificates, from the certificate with the highest credit rating to the one with the lowest rating.

Underwriting Standards

The Mortgage Loans will have been originated generally in accordance with Option One’s Non-Prime Guidelines (the “Option One Underwriting Guidelines”). The Option One Underwriting Guidelines are primarily intended to assess the value of the mortgaged property, to evaluate the adequacy of such property as collateral for the mortgage loan and to assess the applicant’s ability to repay the mortgage loan. The Mortgage Loans were also generally underwritten with a view toward resale in the secondary market. The Mortgage Loans generally bear higher rates of interest than mortgage loans that are originated in accordance with customary Fannie Mae and Freddie Mac standards.

On a case-by-case basis, exceptions to the Option One Underwriting Guidelines are made where compensating factors exist. Except as specifically stated herein, the Option One Underwriting Guidelines are the same for first lien mortgage loans and second lien mortgage loans.

Each mortgage loan applicant completes an application that includes information with respect to the applicant’s liabilities, income, credit history, employment history and personal information. The Option One Underwriting Guidelines require a credit report and, if available, a credit score on each applicant from a credit-reporting agency. The credit report typically contains information relating to such matters as credit history with local and national merchants and lenders, installment debt payments and any record of defaults, bankruptcies, repossessions or judgments. A credit score is a statistical ranking of likely future credit performance developed by Fair, Isaac and Co., Inc. and made available through the three national credit data repositories—Equifax, TransUnion and Experian.

Mortgaged properties that are to secure mortgage loans generally are appraised by qualified independent appraisers. Such appraisers inspect and appraise the subject property and verify that such property is in acceptable condition. Following each appraisal, the appraiser prepares a report which includes a market value analysis based on recent sales of comparable homes in the area and, when deemed appropriate, replacement cost analysis based on the current cost of constructing a similar home. All appraisals are required to conform to the Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Standards Board of the Appraisal Foundation and are generally on forms acceptable to Fannie Mae and Freddie Mac.

The Option One Underwriting Guidelines require that mortgage loans be underwritten in a standardized procedure which complies with applicable federal and state laws and regulations and require Option One’s underwriters to be satisfied that the value of the property being financed, as indicated by an appraisal supports the loan balance. The maximum loan amount for mortgage loans originated under the origination programs varies by state and may be originated up to $1,400,000. Option One recognizes that an appraised value is an opinion and thus, allows for variances to the appraisal based on a review of such appraisal, the loan-to-value ratio (“LTV”) and other risk factors. The maximum variance between the appraisal and a review of the appraisal is limited to (i) 10% for LTVs that are less than or equal to 85%, (ii) 5% for LTVs between 85.01% and 95%, and (iii) 3% for LTVs over 95%. References to LTV’s in this section are based on loan balance (including the principal balance of the senior lien when referring to a second lien mortgage loan) relative to (a) in the case of a purchase money mortgage loan, the lesser of the appraised value or the sales price of the related mortgaged property and (b) in the case of a refinance mortgage loan, the appraised value. There can be no assurance that the value of a mortgaged property estimated in any appraisal or review is equal to the actual value of such mortgaged property at the time of such appraisal or review. Furthermore, there can be no assurance that the actual value of a mortgaged property has not declined subsequent to the time of such appraisal or review.

Option One Underwriting Guidelines require a reasonable determination of an applicant’s ability to repay the loan. Such determination is based on a review of the applicant’s source of income, calculation of a debt service-to-income ratio based on the amount of income from sources indicated on the loan application or similar documentation, a review of the applicant’s credit history and the type and intended use of the property being financed.

Except with respect to the No Documentation program that is described below, the Option One Underwriting Guidelines require verification or evaluation of the income of each applicant and, for purchase transactions, verification of the seasoning or source of funds (in excess of $2,500) required for closing. The income verification required under Option One’s various mortgage loan programs is as follows:

Full Documentation, the highest level of income documentation, generally requires applicants to submit one written form of verification from the employer of stable income for at least 12 months. A wage-earner may document income by a current pay stub reflecting year to date income and applicant’s most recent W-2 or IRS Form 1040. A self-employed applicant may document income with either the most recent federal tax returns or bank statements.

Lite Documentation is for applicants who otherwise cannot meet the requirements of the full documentation program and requires applicants to submit 3 to 6 months’ bank statements or a pay stub as verification of income.

Stated Income Documentation applicants are qualified based upon monthly income as stated on the mortgage loan application.

No Documentation, which is only available under the AA+ credit grade, does not require any statement or proof of income, employment or assets. The credit decision is based on the borrower’s credit score and credit trade lines.

For wage earning borrowers, all documentation types require a verbal verification of employment to be conducted within 48 hours prior to funding.

Latitude Advantage Program. The majority of Option One’s loan originations are underwritten using its “Latitude Advantage” program guidelines. Under the Latitude Advantage program, the maximum LTV is based on an applicant’s credit score, risk grade, income documentation and use and type of property. Maximum LTV for Full Documentation loans are generally higher than the maximum LTV for corresponding Lite Documentation or Stated Income loans. The maximum LTV for loans secured by owner-occupied properties are generally higher than for loans secured by properties that are not owner-occupied. The credit report of the applicant whose credit score is being used for qualifying purposes must reflect three or more tradelines. A minimum credit score of 500 is required, although a credit score greater than 580 is often required to qualify for the maximum LTV (100%) under the program. The debt-to-income ratio is generally less than 55%. Latitude Advantage guidelines generally require bankruptcies be discharged, dismissed or paid off at or prior to funding. Collections and judgments which are less than 12 months old and greater than $5,000 must be paid down or paid off at or prior to closing. Collections and judgments which are 12 or more months old are disregarded. Under the Latitude Advantage program, Option One has established six risk grades, “AA+” to “CC”, based on the applicant’s previous mortgage payment history. Under the AA+ risk category, the applicant must have no 30-day late mortgage payments within the last 12 months. Under the AA risk category, the applicant must have no more than one 30 day late mortgage payment within the past 12 months or no prior mortgage payment history. Under the A risk grade, the applicant must have no more than two 30-day late mortgage payments within the past 12 months. Under the B risk grade, the applicant must have no more than four 30-day late mortgage payments or two 30-day and one 60-day late mortgage payment within the past 12 months. Under the C risk grade, the applicant must have no more than six 30-day late mortgage payments, one 60-day late mortgage payment and one 90-day late mortgage payment within the past 12 months, or six 30-day late mortgage payments, two 60-day late mortgage payments and no 90-day late payments within the last 12 months. CC risk mortgage delinquencies are considered on a case-by-case basis.

Within the Latitude Advantage program, the Score Advantage feature allows the use of the co-applicant’s credit score for qualifying purposes; provided, however, to the extent the co-applicant’s credit score exceeds the primary applicant’s credit score by more than 100 points, then the qualifying credit score will be the primary applicant’s credit score plus 100 points. Score Advantage mortgage loans must be owner occupied, Full Documentation, and have a maximum LTV of 95%. Score Advantage requires the co-applicant’s contribution to qualifying income to be equal to or greater than 30% of the total qualifying income. The maximum debt-to-income ratio for this program is 5% less than the maximum debt-to-income ratio allowed under the corresponding non-Score Advantage program.

Legacy Program. In addition to its credit score based origination program, Latitude Advantage, Option One offers first lien mortgage loans under the “Legacy” program. Under the Legacy program, LTV limitations are determined based on the applicant’s risk grade, income documentation and use and type of property. In general, the maximum LTV increases with credit quality and are typically higher for Full Documentation loans and owner-occupied properties. The maximum debt-to-income ratio is generally less than 55% for AA, A, and B risk grades, and less than 60% for C and CC risk grades. If a credit score is available, the minimum credit score required is 500.

Option One has established five credit grades under the Legacy program, “AA” to “CC”, and considers an applicant’s prior mortgage payment history, if applicable, consumer credit payment history, bankruptcy and foreclosure history, and debt-to-income ratios when determining a loan’s risk grade. The Legacy risk grades correspond directly with the Latitude Advantage risk grades with respect to previous mortgage payment history requirements. In addition, under the Legacy program no foreclosures may have occurred during the preceding three years for AA credit grade, two years for A grade and B grade with a LTV greater than 80%,18 months for B grade with a LTV less than or equal to 80%, or one year for C grade applicants. Chapter 7 and Chapter 11 bankruptcies may have occurred during the preceding two years for AA and A credit grades and B grade with a LTV greater than 80%, 18 months for B grade with a LTV less than or equal to 80%, and one year for C grade. CC risk bankruptcies are permitted if paid in full, discharged or dismissed at or prior to closing. If an applicant’s Chapter 13 bankruptcy has been discharged and the applicant has a credit history otherwise complying with the credit parameters of a credit grade and the mortgage loan LTV is equal to or less than 80%, then the applicant may qualify for such credit grade.

Exceptions. As described above, the foregoing risk categories and criteria are Underwriting Guidelines only. On a case-by-case basis, it may be determined that an applicant warrants a debt-to-income ratio exception, a pricing exception, a loan-to-value exception, a credit score exception or an exception from certain requirements of a particular risk category. An upgrade will be granted if the application reflects certain compensating factors, among others: a relatively lower LTV; a maximum of one 30-day late payment on all mortgage loans during the last 12 months; stable employment; a fixed source of income that is greater than 50% of all income; ownership of current residence of four or more years; or cash reserves equal to or in excess of three monthly payments of principal, interest, taxes and insurance. Upgrade points may also be earned if the applicant places a down payment through escrow of at least 10% of the purchase price of the mortgaged property, or if the new loan reduces the applicant’s monthly aggregate mortgage payment by 20% or more. Accordingly, certain mortgagors may qualify for a more favorable risk category or for a higher maximum LTV that, in the absence of such compensating factors, would satisfy only the criteria of a less favorable risk category or maximum LTV.

THE SELLERS

The Seller of the Mortgage Loans may be any or all of: (i) Option One Mortgage Corporation, a California corporation, (ii) Option One Mortgage Capital Corporation, a Delaware corporation, (iii) Option One Owner Trust 2001-1A, Option One Owner Trust 2001-1B and/or Option One Owner Trust 2001-2, each a Delaware statutory trust formed pursuant to a related Trust Agreement dated as of April 1, 2001 between Option One Loan Warehouse Corporation and Wilmington Trust Company as owner trustee, (iv) Option One Owner Trust 2002-3, a Delaware statutory trust formed pursuant to a related Trust Agreement dated as of July 2, 2002 between Option One Loan Warehouse Corporation and Wilmington Trust Company as owner trustee, (v) Option One Owner Trust 2003-4, a Delaware statutory trust formed pursuant to a related Trust Agreement dated as of August 8, 2003 between Option One Loan Warehouse Corporation and Wilmington Trust Company as owner trustee, (vi) Option One Owner Trust 2003-5, a Delaware statutory trust formed pursuant to a related Trust Agreement dated as of November 1, 2003 between Option One Loan Warehouse Corporation and Wilmington Trust Company as owner trustee, (vii) Option One Owner Trust 2005-6, a Delaware statutory trust formed pursuant to a related Trust Agreement dated as of June 1, 2005 between Option One Loan Warehouse Corporation and Wilmington Trust Company as owner trustee, (viii) Option One Owner Trust 2005-7, a Delaware statutory trust formed pursuant to a related Trust Agreement dated as of September 1, 2005 between Option One Loan Warehouse Corporation and Wilmington Trust Company as owner trustee, (ix) Option One Owner Trust 2005-8, a Delaware statutory trust formed pursuant to a related Trust Agreement dated as of September 21, 2005 between Option One Loan Warehouse Corporation and Wilmington Trust Company as owner trustee or (x) Option One Owner Trust 2005-9, a Delaware statutory trust formed pursuant to a related Trust Agreement dated as of December 30, 2005 between Option One Loan Warehouse Corporation and Wilmington Trust Company as owner trustee. Each of the trusts previously acquired mortgage loans from the Originator or a wholly-owned subsidiary of the Originator and is directly or indirectly beneficially owned by, but not controlled by, the Originator.

THE SERVICER

Servicing Background and Portfolio

Option One began servicing mortgage loans in February 1993, originally operating as a wholly-owned subsidiary of Plaza Home Mortgage Corp. The company was acquired by Fleet Financial Group and began full servicing operations in May 1995. Block Financial subsequently purchased Option One in June 1997.

Option One services primarily sub-prime first-lien residential mortgage loans. Over 70% of the mortgage loans serviced by Option One were originated by Option One and over 65% of the mortgage loans serviced by Option One are in private residential mortgage asset-backed securities.

Option One has experienced substantial growth in its servicing portfolio in the past few years, both as a result of its growth in origination and third-party servicing. The following table summarizes Option One’s servicing portfolio by origin at April 30, 2004, 2005 and 2006 and at July 31, 2006:

	At April 30, 2004		At April 30, 2005		At April 30, 2006		At July 31, 2006
	Portfolio Balance (Dollars in Thousands)
Option One Serviced	$	36,485,328	$	47,554,510	$	62,910,568	$	64,272,445
Sub-Serviced	$	8,782,775	$	20,439,954	$	10,471,509	$	10,248,022
Total Portfolio	$	45,268,103	$	67,994,464	$	73,382,077	$	74,520,467
	Loan Count
Option One Serviced		274,045		332,652		388,976		388,912
Sub-Serviced		50,319		102,638		53,005		50,795
Total Portfolio		324,364		435,290		441,981		439,707

Option One Loan Servicing Portfolio—Advances

Option One has complied with and fulfilled its obligation to advance principal and interest for mortgage loans serviced by Option One in connection with securitizations serviced by Option One for the past three fiscal years where its advancing obligations are substantially identical to those obligations for this transaction.

Business Strategy and Organizational Structure

Option One’s business strategy includes incremental growth of its servicing portfolio through origination volume, leveraging and expanding selective third-party servicing strategic partnerships for both interim and long-term sub-servicing.

Option One has a scalable technology platform and expansion capacity to support its business strategy. Option One’s loan administration functions are performed in U.S. servicing sites in Irvine, California and Jacksonville, Florida, as well as offshore outsource provider’s sites. Option One is one of a number of servicers who outsource certain loan administration functions to Equinox (based in Gurgaon, Noida and Bangalore, India), iGATE (based in Delhi and Bangalore, India) and Hispanic Teleservices Corp. (based in Guadalajara, Mexico). In addition, Option One outsources certain loan administrative functions to its wholly owned subsidiary, Option One Mortgage Corporation India Private Limited (based in Pune, India). The two U.S. offices operate in parallel, handling many of the same processes for loans across the entire portfolio. The use of an offshore outsource provider has increased Option One’s ability to perform customer service, welcome calls, new loan audits, early stage collections, and other loan administration functions. By allocating staff to multiple sites, Option One has the ability to extend its service hours and improve customer satisfaction.

Option One’s organizational structure is aligned to best serve its customers, maximize loan performance and minimize risk exposure. Management continually refines and improves its technology to enhance automated workflow processes and boost productivity throughout the operation. Option One utilizes the Fidelity Mortgage Servicing Package (MSP) as its main servicing system, along with a number of ancillary vendor and proprietary systems. Option One has also developed its own data warehouse and REO and loss mitigation management system.

In order to improve servicing efficiency and effectiveness, Option One outsources certain servicing tasks to a variety of third-party vendors. Such servicing tasks may include: property tax processing and tracking, hazard insurance tracking and related forced placed insurance coverage tasks, certain field services, foreclosure, bankruptcy and loss mitigation and real estate owned related tasks, lien release services and customer service functions. Three material components of Option One’s outsourcing model include redundancy, oversight and audit. In some instances, more than one outsource vendor is used to perform the same function on different segments of the servicing portfolio which encourages competitive pricing and performance and provides additional back-up capabilities. Option One’s outsource vendor agreements provide that each vendor strictly comply with Option One’s guidelines, policies and procedures and that any significant or material decisions are not made by the outsource vendor but are elevated to Option One associates. Option One maintains quality control and review processes to assure that the outsource vendors are performing their functions in accordance with investor requirements and are in compliance with applicable federal and state law. Option One also retains the right to perform audits of outsource vendor’s operations at Option One’s sole discretion.

Option One’s mortgage loan document custodial responsibilities are performed by an independent custodian, or if applicable, a trustee in accordance with the related servicing agreement.

Default Management

Option One defines and measures delinquencies in accordance with applicable investor guidelines and agreements. The company employs a proactive approach to resolving delinquencies with an emphasis on expedient timeline management. Option One pursues a dual track loss mitigation and foreclosure policy. Initial contact is based on the borrower’s previous payment patterns in tandem with the application of Freddie Mac’s EarlyIndicator (EI) scoring model, which seeks to identify those accounts posing a greater risk of default. Collectors work extensive evening and weekend shifts to effectively manage the nationwide portfolio and are trained to identify loss mitigation opportunities and solicit workout opportunities during the collection process. Workout specialists maintain contact with borrowers while an account is in foreclosure in an attempt to arrange an alternate resolution to the delinquency and mitigate future losses. Option One’s borrower assistance department offers borrowers alternatives, all within specific investor guidelines, to foreclosure that may include reinstatement, repayment and forbearance plans, modifications, short-sales, and deed in lieu of foreclosure. A loan will remain in the borrower assistance area until a resolution has been reached or until a foreclosure has been completed. Option One’s proprietary system, DARES, is a real estate and loss mitigation web-based database that provides the borrower assistance team with an automated decision tree and gain/loss analysis, centralization of the repayment plan process, efficient autodialer utilization by outbound solicitation, and web-based applications designed to provide customers with optimal contact avenues. Through DARES, loss mitigation specialists complete an on-line rules-based net present value analysis form, which documents the presumed loss exposure on the property and compares it to different alternatives. DARES is also used for monitoring, tracking, maintaining and communicating all REO department needs. When properties become REO, Option One obtains property valuations and analyzes each property individually to determine what sales decisions will result in the highest net return while limiting the marketing time. Option One’s REO assets are marketed and listed with local real estate agents and published on local multiple listing services. Option One uses the internet for additional listing exposure.

The following tables set forth, at or for the years ended December 31, 2003, 2004 and 2005, and at or for the six months ended June 30, 2006, certain information relating to the delinquency experience (including foreclosures) of one- to four-family residential mortgage loans included in Option One’s entire servicing portfolio (which portfolio includes mortgage loans originated under the Option One Guidelines and mortgage loans that are subserviced for others) at the end of the indicated periods. The indicated periods of delinquency are based on the number of days past due on a contractual basis (based on the OTS method). No mortgage loan is considered delinquent for these purposes until it has not been paid by the next scheduled due date for such mortgage loan.

Delinquencies and Foreclosures

(Dollars in Thousands)

	At December 31, 2003										At December 31, 2004
	By No. of Loans		By Dollar Amount		Percent by No. of Loans			Percent by Dollar Amount			By No. of Loans		By Dollar Amount		Percent by No. of Loans			Percent by Dollar Amount
Total Portfolio		301,778	$	41,364,855		N/A			N/A			386,770	$	59,156,057		N/A			N/A
Period of Delinquency
30-59 days		5,207	$	604,945		1.73	%		1.46	%		6,495	$	819,245		1.68	%		1.38	%
60-89 days		2,564	$	293,412		0.85	%		0.71	%		2,989	$	359,917		0.77	%		0.61	%
90 days or more		15,387	$	1,597,177		5.10	%		3.86	%		15,940	$	1,722,996		4.12	%		2.91	%
Total Delinquent Loans		23,158	$	2,495,534		7.68	%		6.03	%		25,424	$	2,902,158		6.57	%		4.91	%
Loans in Foreclosure(1)		10,764	$	1,161,361		3.57	%		2.81	%		9,361	$	1,044,624		2.42	%		1.77	%

	At December 31, 2005										At June 30, 2006
	By No. of Loans		By Dollar Amount		Percent by No. of Loans			Percent by Dollar Amount			By No. of Loans		By Dollar Amount		Percent by No. of Loans			Percent by Dollar Amount
Total Portfolio		479,216	$	79,494,367		N/A			N/A			441,332	$	74,383,282		N/A			N/A
Period of Delinquency
30-59 days		10,875	$	1,537,798		2.27	%		1.93	%		10,780	$	1,610,826		2.44	%		2.17	%
60-89 days		5,103	$	679,858		1.06	%		0.86	%		5,734	$	828,221		1.30	%		1.11	%
90 days or more		22,544	$	1,838,816		4.70	%		2.31	%		26,523	$	621,678		6.01	%		0.84	%
Total Delinquent Loans		38,522	$	4,056,472		8.04	%		5.10	%		43,037	$	3,060,725		9.75	%		4.11	%
Loans in Foreclosure(1)		9,916	$	1,157,550		2.07	%		1.46	%		15,400	$	2,139,832		3.49	%		2.88	%

Real Estate Owned

(Dollars in Thousands)

	At December 31, 2003						At December 31, 2004						At December 31, 2005						At June 30, 2006
	By No. of Loans			By Dollar Amount			By No. of Loans			By Dollar Amount			By No. of Loans			By Dollar Amount			By No. of Loans			By Dollar Amount
Total Portfolio		301,778		$	41,364,855			386,770		$	59,156,057			479,216		$	79,494,367			441,332		$	74,383,282
Foreclosed Loans(1)		3,361		$	293,629			2,536		$	225,362			3,382		$	316,665			3,704		$	375,946
Foreclosure Ratio(2)		1.11	%		0.71	%		0.66	%		0.38	%		0.71	%		0.40	%		0.84	%		0.51	%

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⁽¹⁾  For the purpose of these tables, Foreclosed Loans means the principal balance of mortgage loans secured by mortgaged properties the title to which has been acquired by Option One, by investors or by an insurer following foreclosure or delivery of a deed in lieu of foreclosure.

⁽²⁾  The Foreclosure Ratio is equal to the aggregate principal balance or number of Foreclosed Loans divided by the aggregate principal balance or number, as applicable, of mortgage loans in the Total Portfolio at the end of the indicated period.

Loan Loss Experience on Option One’s Servicing Portfolio of Mortgage Loans

(Dollars in Thousands)

	At or for the Year Ended December 31,
	2003		2004		2005		For the six months ended June 30, 2006
Net Losses(1)(2)	$	238,634	$	239,008	$	172,102	$	146,096

___________________

⁽¹⁾  “Net Losses” means “Gross Losses” minus “Recoveries.” “Gross Losses” are actual losses incurred on liquidated properties for each respective period. Losses are calculated after repayment of all principal, foreclosure costs, servicing fees and accrued interest to the date of liquidation. “Recoveries” are recoveries from liquidation proceeds, deficiency judgments and MI proceeds.

⁽²⁾  “Net Losses” are computed on a loan-by-loan basis and are reported with respect to the period in which the loan is liquidated. If additional costs are incurred or recoveries are received after the end of the period, the amounts are adjusted with respect to the period in which the related loan was liquidated. Accordingly, the Net Losses reported in the table may change in future periods. The information in this table reflects loan liquidations through June 2006 and claims, refunds or the collection of MI proceeds related to such liquidations through August 2006.

It is unlikely that the delinquency experience of the Mortgage Loans will correspond to the delinquency experience of Option One’s mortgage portfolio set forth in the foregoing tables. The statistics shown above represent the delinquency experience for Option One’s mortgage servicing portfolio only for the periods presented, whereas the aggregate delinquency experience on the Mortgage Loans will depend on the results obtained over the life of the Mortgage Pool. In particular, investors should note that newly originated mortgage loans will not be added to the Mortgage Pool after the Funding Period, and the Mortgage Pool will therefore consist of a static pool of Mortgage Loans, whereas new mortgage loans are continually being originated and added to the pool for which such statistics above are compiled. Accordingly, the actual loss and delinquency percentages with respect to the Mortgage Pool are likely to be substantially higher than those indicated in the tables above. In addition, 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 Option One. Furthermore, adverse economic conditions may affect the timely payment by mortgagors of scheduled payments of principal and interest on such Mortgage Loans and, accordingly, the actual rates of delinquencies and foreclosures with respect to the Mortgage Pool.

Training, Internal Controls and Compliance

Option One has a training program established for its servicing associates, offering a wide range of core job specific and non-job-specific training (corporate, soft skills, and mortgage fundamentals). Training curriculums are tailored for both new and seasoned associates. Seasoned employees receive job-specific training annually. The training program includes new hire orientation, process improvement methodology, computer-based training, system usage techniques, leadership development, and soft skills, all conducted by dedicated business unit trainers. The training is structured to ensure that new representatives are sufficiently knowledgeable of the subject matter and applicable regulations. Training can take the form of classroom instruction, a simulated work environment exercise, and side-by-side monitoring and mentoring. Option One also has ongoing leadership development, mentoring programs, and policy and procedure manuals citing applicable statutes that are widely available to employees.

Option One has controls in place which are intended to protect the company and its investors against risk of loss. An internal audit program is utilized to evaluate the company’s internal controls and safeguard against risk of loss due to noncompliance with regulatory, investor, company, and prudent servicing practices. In addition to oversight from the audit function, Option One also has dedicated compliance and legal teams for servicing-related issues, regulations, and laws. A quality assurance team performs call monitoring and helps to ensure Federal Debt Collections Practice Act (FDCPA) and Real Estate Settlement Procedures Act (RESPA) compliance. A quality control team benchmarks and measures adherence to best practices, identifies risk areas in servicing operations, centralizes communication for regulatory, investor, and industry updates, and ensures that associates are being properly trained on topics related to best practices and servicing risk. Risk management policies in place that assist in ensuring prompt, accurate reporting to its investor base include automated reporting and remitting processes, segregation of duties among reporting, remitting, and reconciling tasks, web portal access for investors to view and download securitization data, online access to bank statements, and an account liquidation database to more closely track historical losses on the portfolio and assist in trend analysis. Option One uses its own proprietary lock-box, which provides increased cash management controls resulting from direct oversight over the payment posting process. Option One maintains separate bank accounts for each investor relationship in accordance with the related servicing agreement requirements. These custodial accounts are maintained with Mellon Bank, N.A. and are not commingled.

Option One is not aware and has not received notice that any default, early amortization or other performance-triggered event has occurred as to any other securitization due to any servicing act or servicing failure to act. There have been no previous disclosures of material noncompliance by Option One with servicing criteria relating to any other portfolio serviced by Option One.

For a description of the limitations on the liability of the Servicer, see “The Pooling Agreement—Certain Matters Regarding the Servicer and the Depositor” in the prospectus.

THE TRUSTEE

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

Wells Fargo Bank has provided corporate trust services since 1934. As of June 30, 2006, Wells Fargo Bank acts as a trustee for a variety of transactions and asset types, including corporate and municipal bonds, mortgage-backed and asset-backed securities and collateralized debt obligations. As of June 30, 2006, Wells Fargo Bank was acting as trustee on approximately 1230 series of residential mortgage-backed securities with an aggregate principal balance of approximately $282,142,062,265.

Under the terms of the Pooling Agreement, Wells Fargo Bank is responsible for securities administration, which includes pool performance calculations, distribution calculations and the preparation of monthly distribution reports. As Trustee, Wells Fargo Bank is responsible for the preparation of all REMIC tax returns on behalf of the trust REMICs and the preparation of monthly reports on Form 10-D, periodic reports on Form 8-K and annual reports on Form 10-K that are required to be filed with the Securities and Exchange Commission on behalf of the trust. Wells Fargo Bank has been engaged in the business of securities administration since June 30, 1995. As of June 30, 2006, Wells Fargo Bank was acting as securities administrator with respect to more than $894,773,136,436 of outstanding residential mortgage-backed securities.

Under the Pooling Agreement, the Trustee’s material duties will be (i) to authenticate and deliver the certificates; (ii) to maintain a certificate registrar; (iii) to calculate and make the required distributions to certificateholders on each Distribution Date; (iv) to prepare and make available to certificateholders the monthly distribution reports and any other reports required to be delivered by the Trustee; (v) send a notice to holders of a class of Certificates when the remaining Certificate Principal Balance of such class of Certificates is to be paid on a specified Distribution Date; (vi) to act as successor servicer, or to appoint a successor servicer; (vii) to perform certain tax administration services for the trust and (viii) to communicate with investors and rating agencies with respect to the Certificates. In performing the obligations set forth in clauses (iii) and (iv) above, the Trustee will be able to rely on the monthly loan information provided to it by the Servicer, and will perform all obligations set forth above solely to the extent described in the Pooling Agreement.

Wells Fargo Bank is acting as custodian of the mortgage loan files pursuant to the Pooling Agreement. In that capacity, Wells Fargo Bank is responsible to hold and safeguard the mortgage notes and other contents of the mortgage files on behalf of the Trustee and the Certificateholders. Wells Fargo Bank maintains each mortgage loan file in a separate file folder marked with a unique bar code to assure loan-level file integrity and to assist in inventory management. Files are segregated by transaction or investor. Wells Fargo Bank has been engaged in the mortgage document custody business for more than 25 years. Wells Fargo Bank maintains document custody facilities in its Minneapolis, Minnesota headquarters and in three regional offices located in Richfield, Minnesota, Irvine, California, and Salt Lake City, Utah. As of June 30, 2006, Wells Fargo Bank maintains mortgage custody vaults in each of those locations with an aggregate capacity of over eleven million files.

THE POOLING AGREEMENT

General

The Certificates will be issued pursuant to the Pooling Agreement. The Trust created under the Pooling Agreement will consist of (i) all of the Depositor’s right, title and interest in the Mortgage Loans, the related mortgage notes, Mortgages and other related documents, (ii) all payments on or collections in respect of the Mortgage Loans due after the Cut-off Date, together with any proceeds thereof, (iii) any Mortgaged Properties acquired on behalf of Certificateholders by foreclosure or by deed in lieu of foreclosure, and any revenues received thereon, (iv) the rights of the Trustee under all insurance policies, including the PMI Policy, required to be maintained pursuant to the Pooling Agreement, (v) the Net WAC Rate Carryover Reserve Account, (vi) the rights of the Depositor under the Mortgage Loan Purchase Agreement, (vii) all of the Depositor’s right, title and interest in any Subsequent Mortgage Loan and any rights conveyed by the Depositor to the Trustee under any related Subsequent Transfer Instrument, (viii) the right to any Net Swap Payment and any Swap Termination Payment paid by the Swap Provider and deposited into the Swap Account and (viii)amounts on deposit in the Interest Coverage Account and Pre-Funding Accounts, if any.

The NIMS Insurer, if any, will be a third party beneficiary of the Pooling Agreement to the extent set forth in the Pooling Agreement. In addition, the NIMS Insurer, if any, will have various rights under the Pooling Agreement including, but not limited to, the rights set forth under “Risk Factors—Rights of the NIMS Insurer” in this prospectus supplement.

Assignment of the Mortgage Loans

On the Closing Date, the Depositor will transfer to the Trust all of its right, title and interest in and to each Closing Date Mortgage Loan, the related mortgage note, Mortgage, assignment of Mortgage in recordable form in blank or to the Trustee and other related documents (collectively, the “Related Documents”), including all scheduled payments with respect to each such Mortgage Loan due after the Cut-off Date. The Trustee, concurrently with such transfer, will deliver the Certificates to the Depositor. Each Mortgage Loan transferred to the Trust will be identified on a schedule (the “Mortgage Loan Schedule”) delivered to the Trustee pursuant to the Pooling Agreement. The Mortgage Loan Schedule will include information such as the Principal Balance of each Closing Date Mortgage Loan as of the Cut-off Date, its Mortgage Rate as well as other information with respect to each Mortgage Loan.

The Pooling Agreement will require that, within the time period specified therein, the Depositor will deliver or cause to be delivered to the Trustee (or a custodian, as the Trustee’s agent for such purpose) the mortgage notes and the Related Documents. In lieu of delivery of original Mortgages or mortgage notes, if such original is not available or lost, the Depositor may deliver or cause to be delivered true and correct copies thereof, or, with respect to a lost mortgage note, a lost note affidavit executed by the Originator. The assignments of Mortgage will not be recorded by or on behalf of the Depositor in the appropriate offices for real property records; provided, however, upon the occurrence of certain events set forth in the Pooling Agreement, each such assignment of Mortgage will be recorded by the Seller as set forth in the Pooling Agreement.

Within 45 days of the Closing Date, the Trustee will review the Closing Date Mortgage Loans, in each case, together with the Related Documents pursuant to the Pooling Agreement and if any Closing Date Mortgage Loan or Related Document is found to be defective in any material respect and such defect is not cured within 120 days (subject to the terms of the Pooling Agreement) following receipt of notification thereof to the Originator from the Trustee, the Originator will be obligated to either (i) substitute for such Closing Date Mortgage Loan a Qualified Substitute Mortgage Loan; provided, however, such substitution is permitted only within two years of the Closing Date and may not be made unless an opinion of counsel is provided to the effect that such substitution will not disqualify any of the REMICs (as defined in the Pooling Agreement) as a REMIC or result in a prohibited transaction tax or prohibited contributions tax under the Code or (ii) repurchase such Closing Date Mortgage Loan at a price (the “Purchase Price”) equal to the outstanding Principal Balance of such Mortgage Loan as of the date of purchase, plus all accrued and unpaid interest thereon, computed at the Mortgage Rate through the end of the calendar month in which the purchase is effected, plus the amount of any unreimbursed Advances and Servicing Advances (each as defined herein) made by the Servicer, plus any costs and damages incurred by the Trust in connection with any violation by such loan of any predatory or abusive-lending law. The Purchase Price will be required to be remitted to the Servicer for deposit in the Collection Account (as defined herein) on or prior to the next succeeding Determination Date (as defined herein) after such obligation arises. The obligation of the Originator to repurchase or substitute for a Deleted Mortgage Loan (as defined herein) is the sole remedy regarding any defects in the Mortgage Loans and Related Documents available to the Trustee or the Certificateholders.

In connection with the substitution of a Qualified Substitute Mortgage Loan, the Originator will be required to remit to the Servicer for deposit in the Collection Account on or prior to the next succeeding Determination Date after such obligation arises an amount (the “Substitution Adjustment”) equal to the excess of the Principal Balance of the related Deleted Mortgage Loan over the Principal Balance of such Qualified Substitute Mortgage Loan.

A “Qualified Substitute Mortgage Loan” is a mortgage loan substituted by the Originator for a Deleted Mortgage Loan which must, on the date of such substitution, (i) have an outstanding Principal Balance (or in the case of a substitution of more than one Mortgage Loan for a Deleted Mortgage Loan, an aggregate Principal Balance), not in excess of, and not more than 5% less than, the Principal Balance of the Deleted Mortgage Loan; (ii) have a Mortgage Rate not less than the Mortgage Rate of the Deleted Mortgage Loan and not more than 1% in excess of the Mortgage Rate of such Deleted Mortgage Loan; (iii) if the Qualified Substitute Mortgage Loan is an adjustable-rate Mortgage Loan, have a Maximum Mortgage Rate and Minimum Mortgage Rate not less than the respective rate for the Deleted Mortgage Loan, have a Gross Margin equal to or greater than the Deleted Mortgage Loan and have the same Adjustment Date frequency as the Deleted Mortgage Loan; (iv) have the same Due Date as the Deleted Mortgage Loan; (v) have a remaining term to maturity not more than one year earlier and not later than the remaining term to maturity of the Deleted Mortgage Loan; (vi) comply with each representation and warranty as to the Mortgage Loans set forth in the Mortgage Loan Purchase Agreement (deemed to be made as of the date of substitution); (vii) have been underwritten or re-underwritten by the Originator in accordance with the same underwriting criteria and guidelines as the Mortgage Loans being replaced; (viii) be of the same or better credit quality as the Mortgage Loan being replaced, (ix) be covered by the PMI Policy if the Mortgage Loan being replaced was covered by the PMI Policy, (x) have a prepayment charge provision at least equal to the prepayment charge provision contained in the Deleted Mortgage Loan, (xi) be current and (xii) satisfy certain other conditions specified in the Pooling Agreement.

The Originator will make certain representations and warranties as to the accuracy in all material respects of certain information furnished to the Trustee with respect to each Mortgage Loan (e.g., Principal Balance and the Mortgage Rate). In addition, the Sponsor will represent and warrant, as of the Closing Date and each Subsequent Transfer Date, as applicable, that, among other things: (i) at the time of transfer to the Seller, the Originator transferred or assigned all of its right, title and interest in each Mortgage Loan and the Related Documents, free of any lien and, (ii) each Mortgage Loan complied, at the time of origination, in all material respects with applicable state and federal laws. Upon discovery of a breach of any such representation and warranty which materially and adversely affects the value of the related Mortgage Loan or the interests of the Certificateholders in the related Mortgage Loan and Related Documents, the Sponsor, subject to the terms of the Pooling Agreement, will have a period of 120 days after the earlier of discovery or receipt of written notice of the breach to effect a cure. If the breach cannot be cured within the 120-day period, the Sponsor will be obligated to (i) substitute for such Deleted Mortgage Loan a Qualified Substitute Mortgage Loan or (ii) purchase such Deleted Mortgage Loan from the Trust. The same procedure and limitations that are set forth above for the substitution or repurchase of Deleted Mortgage Loans as a result of deficient documentation relating thereto will apply to the substitution or repurchase of a Deleted Mortgage Loan as a result of a breach of a representation or warranty in the Mortgage Loan Purchase Agreement that materially and adversely affects the interests of the Certificateholders.

Mortgage Loans required to be transferred to the Originator as described in the preceding paragraphs are referred to as “Deleted Mortgage Loans.”

Pursuant to the Pooling Agreement, the Servicer will service and administer the Mortgage Loans as more fully set forth therein.

Payments on Mortgage Loans; Deposits to Collection Account and Distribution Account

The Servicer will establish and maintain or cause to be maintained a separate trust account (the “Collection Account”) for the benefit of the Certificateholders. The Collection Account will be an Eligible Account (as defined in the Pooling Agreement). Upon receipt by the Servicer of amounts in respect of the Mortgage Loans (excluding amounts representing the Servicing Fee or other servicing compensation, reimbursement for Advances and Servicing Advances and insurance proceeds to be applied to the restoration or repair of a Mortgaged Property or similar items), the Servicer will deposit such amounts in the Collection Account. Amounts so deposited may be invested in Permitted Investments (as defined in the Pooling Agreement) maturing no later than one Business Day prior to the date on which the amount on deposit therein is required to be deposited in the Distribution Account. The Trustee will establish an account (the “Distribution Account”) into which will be deposited amounts withdrawn from the Collection Account for distribution to Certificateholders on a Distribution Date and payment of certain fees and expenses of the Trust. The Distribution Account will be an Eligible Account. Amounts on deposit therein may be invested in Permitted Investments maturing on or before the Business Day prior to the related Distribution Date unless such Permitted Investments are invested in investments managed or advised by the Trustee or an affiliate thereof, in which case such Permitted Investments may mature on the related Distribution Date.

Advances

Subject to the following limitations, the Servicer will be obligated to advance or cause to be advanced on or before each Distribution Date its own funds, or funds in the Collection Account that are not included in Available Funds for such Distribution Date, or a combination of both, in an amount equal to the aggregate of all payments of principal and interest (net of Servicing Fees) that were due during the related Due Period on the Mortgage Loans, other than Balloon Payments, and that were delinquent on the related Determination Date, plus certain amounts representing assumed payments not covered by any current net income on the Mortgaged Properties acquired by foreclosure or deed in lieu of foreclosure and, with respect to Balloon Loans, with respect to which the Balloon Payment is not made when due, an assumed monthly payment that would have been due on the related Due Date based on the original principal amortization schedule for such Balloon Loan (any such advance, an “Advance” and together, the “Advances”).

Advances are required to be made only to the extent they are deemed by the Servicer to be recoverable from related late collections, insurance proceeds, condemnation proceeds and liquidation proceeds. The purpose of making such Advances is to maintain a regular cash flow to the Certificateholders, rather than to guarantee or insure against losses. The Servicer will not be required, however, to make any Advances with respect to reductions in the amount of the monthly payments on the Mortgage Loans due to bankruptcy proceedings or the application of the Relief Act or any state laws providing for similar relief. Subject to the recoverability standard above, the Servicer’s obligation to make Advances as to any Mortgage Loan will continue until the Mortgage Loan is paid in full or until the recovery of all Liquidation Proceeds thereon.

All Advances will be reimbursable to the Servicer from late collections, insurance proceeds, condemnation proceeds and liquidation proceeds from the Mortgage Loan as to which such unreimbursed Advance was made unless such amounts are deemed to be nonrecoverable by the Servicer from the proceeds of the related Mortgage Loan, in which event reimbursement will be made to the Servicer from general funds in the Collection Account. The Servicer may recover from amounts in the Collection Account the amount of any Advance that remains unreimbursed to the Servicer from the related liquidation proceeds after the final liquidation of the related Mortgage Loan, and such reimbursement amount will not be available for remittance to the Trustee for distribution on the Certificates. In addition, the Servicer may, to the extent provided in the Pooling Agreement, withdraw from the Collection Account funds that were not included in Available Funds for the preceding Distribution Date to reimburse itself for Advances previously made. In the event the Servicer fails in its obligation to make any required Advance, a successor servicer appointed by the majority holder of the Class C Certificates (other than Option One Mortgage Corporation) or the Trustee, in its capacity as successor servicer, will be obligated to make any such Advance, to the extent required in the Pooling Agreement.

In the course of performing its servicing obligations, the Servicer will pay all reasonable and customary “out-of-pocket” costs and expenses (including reasonable attorneys’ fees and disbursements) incurred in the performance of its servicing obligations, including, but not limited to, the cost of (i) the preservation, restoration, inspection and protection of the Mortgaged Properties, (ii) environmental audit reports, (iii) any enforcement or judicial proceedings, including foreclosures, (iv) the management and liquidation of Mortgaged Properties acquired in satisfaction of the related mortgage and (v) certain insurance premiums and certain ongoing expenses associated with the Mortgage Pool and incurred by the Servicer in connection with its responsibilities under the Pooling Agreement. Each such expenditure will constitute a “Servicing Advance.”

The Servicer’s right to reimbursement for Servicing Advances is limited to late collections on the related Mortgage Loan, including liquidation proceeds, condemnation proceeds, released mortgaged property proceeds, insurance proceeds and such other amounts as may be collected by the Servicer from the related mortgagor or otherwise relating to the Mortgage Loan in respect of which such unreimbursed amounts are owed, unless such amounts are deemed to be nonrecoverable by the Servicer from the proceeds of the related Mortgage Loan, in which event reimbursement will be made to the Servicer from general funds in the Collection Account.

The Pooling Agreement provides that the Servicer or the Trustee, on behalf of the Trust and with the consent of the parties set forth in the Pooling Agreement, may enter into a facility with any person which provides that such person (an “Advancing Person”) may fund Advances and/or Servicing Advances, although no such facility shall reduce or otherwise affect the Servicer’s obligation to fund such Advances and/or Servicing Advances. Any Advances and/or Servicing Advances made by an Advancing Person will be reimbursed to the Advancing Person in the same manner as reimbursements would be made to the Servicer.

Servicing and Other Compensation and Payment of Expenses

The principal compensation to be paid to the Servicer in respect of its servicing activities (the “Servicing Fee”) for the Certificates will be at the “Servicing Fee Rate” of 0.30% per annum for the first 10 Due Periods, 0.40% per annum for the 11^th through 30^th Due Periods and 0.65% per annum for all Due Periods thereafter, in each case, on the Principal Balance of each Mortgage Loan. As additional servicing compensation, the Servicer is entitled to retain all service-related fees, including assumption fees, modification fees, extension fees, non-sufficient fund fees, late payment charges and Prepayment Interest Excess, and other ancillary fees (but not prepayment charges, which will be distributed to the holders of the Class P Certificates), to the extent collected from mortgagors, together with any interest or other income earned on funds held in the Collection Account and any servicing accounts. The Servicer is obligated to deposit into the Collection Account the amount of any Prepayment Interest Shortfall (payments made by the Servicer in satisfaction of such obligation, “Compensating Interest”) but only in an amount up to its Servicing Fee and Prepayment Interest Excess for the related Distribution Date.

With respect to any Determination Date and each Mortgage Loan as to which a principal prepayment was applied during the portion of the related Prepayment Period occurring in the month preceding the month of such Determination Date, the “Prepayment Interest Shortfall” is an amount equal to one month’s interest on the Mortgage Loan less any interest payments made by the Mortgagor (net of the Servicing Fee).

Events of Default and Removal of Servicer

The circumstances under which the Servicer may be removed are set forth under “The Pooling Agreement—Events of Default” in the prospectus.

In the event of a Servicer event of default, a successor servicer appointed by the majority holder of the Class C Certificates (other than Option One Mortgage Corporation) or the Trustee will be the successor in all respects to the Servicer under the Pooling Agreement within 90 days of the time the Servicer receives a notice of termination. Such successor servicer or the Trustee, in its capacity as successor servicer, immediately will assume all of the obligations of the Servicer to make Advances. As compensation therefor, the successor servicer will be entitled to such compensation as the Servicer would have been entitled to under the Pooling Agreement if no such notice of termination had been given.

Notwithstanding the above, (i) if the Trustee is unwilling to act as successor Servicer or (ii) if the Trustee is legally unable so to act, the Trustee may appoint or petition a court of competent jurisdiction to appoint, any established housing and home finance institution, bank or other mortgage loan or home equity loan servicer having a net worth of not less than $50,000,000 and meeting such other standards for a successor servicer as are set forth in the Pooling Agreement. Pending appointment of a successor to the Servicer, unless the Trustee is prohibited by law from so acting, the Trustee will act in such capacity as described in the prior paragraph.

Upon any termination or appointment of a successor to the Servicer pursuant to the Pooling Agreement, the Trustee will give prompt written notice thereof to the certificateholders, the NIMS Insurer and each Rating Agency. No later than 60 days after the occurrence of any event which constitutes or which, with notice or a lapse of time or both, would constitute an event of default by the Servicer for five business days after a responsible officer of the Trustee becomes aware of the occurrence of such an event, the Trustee shall transmit by mail to all Certificateholders and to the NIMS Insurer notice of such occurrence unless such event of default by the Servicer shall have been waived or cured.

All reasonable costs and expenses incurred by the Trustee in connection with the transfer of servicing shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs, and if such predecessor Servicer defaults in its obligation to pay such costs, such costs shall be paid by the successor Servicer or the Trustee (in which case the successor Servicer or the Trustee, as applicable, shall be entitled to reimbursement therefor from the assets of the Trust).

Limitations on Liability and Indemnification of the Trustee

The Pooling Agreement will provide that the Trustee and any director, officer, employee or agent of the Trustee will be indemnified by the Trust and will be held harmless against any loss, liability or expense (not including expenses, disbursements and advances incurred or made by the Trustee including the compensation and the expenses and disbursements of its agents and counsel, in the ordinary course of the Trustee’s performance in accordance with the provisions of the Pooling Agreement) incurred by the Trustee arising out of or in connection with the acceptance or administration of its obligations and duties under the Pooling Agreement, other than any loss, liability or expense (i) that constitutes a specific liability of the Trustee under the Pooling Agreement, (ii) resulting from a breach of the Servicer’s obligations and duties under the Pooling Agreement and the Mortgage Loans for which the Trustee receives indemnification from the Servicer or (iii) incurred by reason of willful misfeasance, bad faith or negligence in the performance of the Trustee’s duties under the Pooling Agreement or as a result of a breach, or by reason of reckless disregard, of the Trustee’s obligations and duties under the Pooling Agreement. The Pooling Agreement will provide that the Trustee may withdraw amounts owing to it under the Pooling Agreement prior to distributions to Certificateholders. Reimbursements to the Trustee by the Trust as described above are subject to annual limits set forth in the Pooling Agreement, and the Trustee will not be responsible to the Certificateholders for any consequences resulting from any failure of the Trustee to incur any expenses, of the kind that would otherwise be by the Trust, in excess of such annual limits.

The Trustee will not be liable under the Pooling Agreement: (i) except for the performance of such duties and obligations as are specifically specified in the Pooling Agreement prior to the occurrence of an event of default and after the curing of such Servicer event of default; (ii) for an error of judgment made in good faith by a responsible officer of the Trustee unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; (iii) for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or power’s conferred upon it by the Pooling Agreement; (iv) for any action taken or omitted by it in good faith in accordance with the direction of the holders of Certificates evidencing at least 51% of the voting rights; (v) for any loss resulting from the investment of funds held in the Collection Account at the direction of the Servicer; (vi) for any willful misconduct or negligence of any agents, custodians, nominees or attorneys appointed by the Trustee to perform any of its duties (as long as such agents, custodians, nominees or attorneys are appointed with due and proper care); or (vii) to expend or risk its own funds or incur any liability in the performance of its duties if it has reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.

The Trustee may conclusively rely upon and will be fully protected in acting or refraining from acting upon any certificates or opinions of counsel furnished to the Trustee under the Pooling Agreement. Any such opinion of counsel will be full and complete authorization and protection in respect of any action taken or omitted to be taken by the Trustee in good faith and in accordance with such opinion of counsel. The Trustee may also request and rely conclusively upon and will be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other document reasonably believed by it to be genuine and to have been signed or presented by the proper party and the manner of obtaining consents and evidencing the authorization of the execution of those documents will be subject to such reasonable regulations as the Trustee may prescribe. The Trustee will not be deemed to have knowledge or notice of any matter, including an event of default, unless actually known to a responsible officer of the Trustee or unless a responsible officer of the Trustee has received written notice of that matter.

Removal of the Trustee

If at any time the Trustee becomes ineligible in accordance with the provisions of the Pooling Agreement and shall fail to resign after written request therefor by the Depositor or the NIMS Insurer or if at any time the Trustee shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Depositor, the Servicer or the NIMS Insurer may remove the Trustee. If the Depositor, the Servicer or the NIMS Insurer removes the Trustee under the authority of the immediately preceding sentence, the Depositor, with the consent of the NIMS Insurer, shall promptly appoint a successor Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee.

The certificateholders entitled to at least 51% of the voting rights (or the NIMS Insurer upon the failure of the Trustee to perform its obligations hereunder) may at any time remove the Trustee by written instrument or instruments delivered to the Servicer, the Depositor and the Trustee; the Depositor shall thereupon use its best efforts to appoint a successor trustee acceptable to the NIMS Insurer.

Upon satisfaction of certain conditions as specified in the Pooling Agreement, the Trustee may resign from its duties under the Pooling Agreement. Any resignation or removal of the trustee and appointment of a successor Trustee will not become effective until acceptance of appointment by the successor trustee.

Voting Rights

At all times 98% of all voting rights will be allocated among the holders of the Class A, Mezzanine Certificates and Class C Certificates in proportion to the then outstanding Certificate Principal Balances of their respective Certificates. At all times 1% of all voting rights will be allocated to the holders of the Class P Certificates and 1% of all voting rights will be allocated to the holders of the Residual Certificates. The voting rights allocated to any class of Certificates will be allocated among all Certificateholders of such class in proportion to the outstanding percentage interests of such holders in such class.

Amendment of the Pooling Agreement

The Pooling Agreement may be amended under the circumstances set forth under “The Pooling Agreement—Amendment” in the prospectus but only with the consent of the NIMS Insurer, if any.

Evidence as to Compliance

The Servicer will deliver to the Trustee, the NIMS Insurer and the Depositor in March of each year, commencing in 2007, an officers’ certificate stating that (i) a review of the activities of the Servicer during the preceding calendar year and of performance under the Pooling Agreement has been made under such officers' supervision and (ii) to the best of such officers' knowledge, based on such review, the Servicer has fulfilled all of its obligations under the Pooling Agreement throughout such calendar year, or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to such officer and the nature and status of such default.

In addition, notwithstanding anything in the prospectus to the contrary, the Pooling Agreement will generally provide that in March of each year, commencing in 2007, each party participating in the servicing function will provide to the Trustee and the Depositor a report on an assessment of compliance with the applicable minimum servicing criteria established in Item 1122(a) of Regulation AB (the “AB Servicing Criteria”). The AB Servicing Criteria include specific criteria relating to the following areas: general servicing considerations, cash collection and administration, investor remittances and reporting, and pool asset administration. Such report will indicate that the AB Servicing Criteria were used to test compliance on a platform level basis and will set out any material instances of noncompliance.

The Pooling Agreement will also provide that each party responsible for the servicing function will deliver along with its report on assessment of compliance, an attestation report from a firm of independent public accountants on the assessment of compliance with the AB Servicing Criteria.

Termination

The Servicer (or if the Servicer elects not to exercise such option, the NIMS Insurer, if any) will have the right to purchase all of the Mortgage Loans and REO Properties in both Loan Groups and thereby effect the early retirement of the Certificates, on any Distribution Date on which the aggregate Principal Balance of such Mortgage Loans and REO Properties in the Trust is equal to or less than 10% of the sum of the aggregate Principal Balance of the Closing Date Mortgage Loans in both Loan Groups as of the Cut-off Date and the amounts deposited in the Pre-Funding Accounts on the Closing Date. The first Distribution Date on which such option could be exercised is referred to herein as the “Optional Termination Date.” In the event that the option is exercised, the repurchase will be made at a price (the “Termination Price”) generally equal to the fair market value of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid interest for each Mortgage Loan at the related Mortgage Rate to but not including the first day of the month in which such repurchase price is paid plus unreimbursed Servicing Advances, Advances, any unpaid Servicing Fees allocable to such Mortgage Loans and REO Properties, any accrued unpaid Net WAC Rate Carryover Amounts and any Swap Termination Payment owed to the Swap Provider. However, this option may only be exercised if (i) the fair market value of the Mortgage Loans and REO Properties is at least equal to the aggregate Principal Balance of the Mortgage Loans and the appraised value of the REO Properties and (ii) the Termination Price is sufficient to pay all interest accrued on, as well as amounts necessary to retire the principal balance of, the notes guaranteed by the NIMS Insurer and any amounts owed to the NIMS Insurer at the time the option is exercised. Notwithstanding the foregoing, if the condition set forth in clause (ii) above is satisfied but the condition set forth in clause (i) above is not satisfied, then the optional termination may nevertheless be exercised upon the payment of a higher Termination Price determined as provided in the Pooling Agreement provided that the payment of such higher Termination Price is not prohibited by any regulatory institution under whose supervision the party exercising the optional termination may be conducting its business at such time. In the event the Servicer or the NIMS Insurer, if any, exercises the optional termination, the portion of the purchase price allocable to the Class A and Mezzanine Certificates will be, to the extent of available funds (distributable in accordance with the priorities described under “Description of the Certificates—Allocation of Available Funds” and “—Overcollateralization Provisions” in this prospectus supplement) equal to:

(i) 100% of the then outstanding Certificate Principal Balance of the Class A and Mezzanine Certificates, plus

(ii) interest for the final Accrual Period on the then outstanding Certificate Principal Balance of the Class A and Mezzanine Certificates at the then applicable Pass-Through Rate for the class, plus

(iii) any previously accrued but unpaid interest thereon to which the holders of the Class A and Mezzanine Certificates are entitled, together with the amount of any Net WAC Rate Carryover Amounts (payable to and from the Net WAC Rate Carryover Reserve Account or the Swap Account), plus

(iv) in the case of the Mezzanine Certificates, any previously unpaid Allocated Realized Loss Amount.

The holders of the Residual Certificates will pledge any amount received in a termination in excess of par to the holders of the Class C Certificates.

Servicing of Delinquent Mortgage Loans

The Servicer will be required to act with respect to delinquent Mortgage Loans in accordance with procedures set forth in the Pooling Agreement. These procedures, as followed with respect to any delinquent Mortgage Loan, may, among other things, result in (i) foreclosing on such Mortgage Loan, (ii) accepting the deed to the related Mortgaged Property in lieu of foreclosure, (iii) granting the borrower under such Mortgage Loan a modification or forbearance or (iv) accepting payment from the borrower under such Mortgage Loan of an amount less than the Principal Balance of such Mortgage Loan in final satisfaction of such Mortgage Loan. These procedures are intended to lead to the alternative that would result in the recovery by the Trust of the highest net present value of proceeds on such Mortgage Loan. However, there can be no assurance that following such procedures will have that result or that following such procedures will lead to the alternative that is in the best interests of the Certificateholders. If the Servicer extends the payment period or accepts a lesser amount than stated in the mortgage note in satisfaction of the mortgage note, your yield may be affected.

Optional Purchase of Defaulted Loans

As to any Mortgage Loan which is delinquent in payment by 90 days or more, the NIMS Insurer, if any, may, at its option and in accordance with the terms of the Pooling Agreement, purchase such Mortgage Loan from the Trust at the Purchase Price for such Mortgage Loan. In addition, if delinquencies on the Mortgage Loans exceed a specified level set forth in the Pooling Agreement, then the Servicer may purchase from the Trust and the Servicer may be directed by a third party to purchase, at the Purchase Price, Mortgage Loans that are delinquent in payment 90 days or more, until such delinquency percentage is reduced to or below such specified level, subject to certain other conditions set forth in the Pooling Agreement, including but not limited to the condition that the Servicer must first purchase the Mortgage Loan that, as of the time of such purchase, has been delinquent for the greatest period before purchasing Mortgage Loans that have been delinquent for lesser periods. Furthermore, the Residual Holder may have the right to direct the Servicer to transfer the servicing of certain mortgage loans delinquent 120 days or more to a special servicer appointed by the Residual Holder as described in the pooling agreement.

DESCRIPTION OF THE CERTIFICATES

General

The Certificates will be issued pursuant to the Pooling Agreement. Set forth below are summaries of the specific terms and provisions pursuant to which the Class A and Mezzanine Certificates will be issued. The following summaries do not purport to be complete and are subject to, and are qualified in their entirety by reference to, the provisions of the Pooling Agreement. When particular provisions or terms used in the Pooling Agreement are referred to, the actual provisions (including definitions of terms) are incorporated by reference.

The Trust will issue (i) the Class I-A-1 Certificates, the Class II-A-1 Certificates, the Class II-A-2 Certificates, the Class II-A-3 Certificates and the Class II-A-4 Certificates (collectively, the “Class A Certificates”), (ii) the Class M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the Class M-5 Certificates, the Class M-6 Certificates, the Class M-7 Certificates, the Class M-8 Certificates, the Class M-9 Certificates, the Class M-10 Certificates and the Class M-11 Certificates (collectively, the “Mezzanine Certificates”), (iii) the Class C Certificates (together with the Mezzanine Certificates, the “Subordinate Certificates”), (iv) the Class P Certificates and (v) the Class R Certificates and the Class R-X Certificates (together, the “Residual Certificates”). The Class A Certificates, the Mezzanine Certificates, the Class C Certificates, the Class P Certificates and the Residual Certificates are collectively referred to herein as the “Certificates.” Only the Class A Certificates and the Mezzanine Certificates (other than the Class M-10 Certificates and the Class M-11 Certificates) are offered hereby (the “Offered Certificates”).

The Offered Certificates will have the Original Certificate Principal Balances specified on the cover hereof, subject to a permitted variance of plus or minus five percent. The Class C Certificates will have an Original Certificate Principal Balance equal to the excess of the aggregate Principal Balance of the Closing Date Mortgage Loans as of the Cut-off Date and the Original Pre-Funded Amounts over the Original Certificate Principal Balances of the Class A Certificates, Mezzanine Certificates and Class P Certificates. The Class P Certificates will have an Original Certificate Principal Balance of $100 and will not bear interest. The Class P Certificates will be entitled to all prepayment charges received in respect of the Mortgage Loans and such amounts will not be available for distribution to the holders of the Class A and Mezzanine Certificates. The Residual Certificates will not have Original Certificate Principal Balances and will not bear interest.

The Class A and Mezzanine Certificates will be issued in book-entry form as described below. The Class A and Mezzanine Certificates will be issued in minimum dollar denominations of $25,000 and integral multiples of $1.00 in excess thereof. The assumed final maturity date (the “Assumed Final Distribution Date”) for the Offered Certificates is the Distribution Date in February 2037. See “Yield, Prepayment and Maturity Considerations-Weighted Average Lives” in this prospectus supplement.

Distributions on the Class A and Mezzanine Certificates will be made by the Trustee on the 25^th day of each month, or if such day is not a Business Day, on the first Business Day thereafter, commencing in November 2006 (each, a “Distribution Date”), to the persons in whose names such Certificates are registered at the close of business on the Record Date. The “Record Date” for any Class A and Mezzanine Certificates issued in book-entry form is the business day immediately preceding such Distribution Date and the “Record Date” for any physical Certificate or any Class A and Mezzanine Certificates that becomes a Definitive Certificate (as defined herein), will be the last business day of the month immediately preceding the month in which the related Distribution Date occurs.

Fees and Expenses of the Trust

The following fees and expenses will be paid from amounts received on the Mortgage Loans prior to distributions to certificateholders:

Fee Payable to:	Frequency of Payment:	Amount of Fee:	How and When Fee Is Payable:
Servicer(1)	Monthly	For each Mortgage Loan, a monthly fee payable to the servicer. The monthly fee is calculated as one-twelfth of the Servicing Fee Rate on the unpaid Principal Balance of the Mortgage Loans at the end of the applicable Due Period.	Withdrawn from amounts on deposit in the Collection Account, before distributions to Certificateholders.
Trustee(2)	Monthly	For each Mortgage Loan, a monthly fee payable to the trustee. The monthly fee is calculated as one-twelfth of the Trustee Fee Rate on the unpaid Principal Balance of the Mortgage Loans as of the first day of the related Due Period.	Withdrawn from amounts on deposit in the Distribution Account, before distributions to Certificateholders.
PMI Insurer	Monthly	For each Mortgage Loan, a monthly fee payable to the PMI Insurer. The monthly fee is calculated as one-twelfth of the PMI Premium Rate on the unpaid Principal Balance of the PMI Mortgage Loans as of the first day of the related Due Period.	Withdrawn from amounts on deposit in the Distribution Account, before distributions to Certificateholders.
Swap Provider	Monthly	Generally, a monthly payment calculated as the positive excess, if any, of (a) one-twelfth of the Strike Rate on the Swap Notional Amount for such Distribution Date multiplied by 250 over (b) one-month LIBOR (as set forth in the Interest Rate Swap Agreement and calculated on an actual/360 basis) on the Swap Notional Amount for such Distribution Date multiplied by 250.	Withdrawn from amounts on deposit in the Distribution Account, before distributions to Certificateholders.

_________________________

⁽¹⁾  See “The Pooling Agreement—Servicing and Other Compensation and Payment of Expenses” in this prospectus supplement for a description of additional compensation that the servicer may receive.

⁽²⁾  The Trustee will also be entitled to any investment income on amounts on deposit in the distribution account.

Book-Entry Certificates

The Class A and Mezzanine Certificates will be book-entry Certificates (for so long as they are registered in the name of the applicable depository or its nominee, the “Book-Entry Certificates”). Persons acquiring beneficial ownership interests in the Book-Entry Certificates (“Certificate Owners”) will hold such Certificates through The Depository Trust Company (“DTC”) in the United States, or upon request through Clearstream Banking Luxembourg, formerly known as Cedelbank SA (“Clearstream”), or the Euroclear System (“Euroclear”) (in Europe) if they are participants of such systems, or indirectly through organizations which are participants in such systems. The Book-Entry Certificates will be issued in one or more certificates which equal the aggregate Certificate Principal Balance of such Certificates and will initially be registered in the name of Cede & Co., the nominee of DTC. Clearstream and Euroclear will hold omnibus positions on behalf of their participants through customers’ securities accounts in Clearstream’s and Euroclear’s names on the books of their respective depositaries which in turn will hold such positions in customers’ securities accounts in the depositaries’ names on the books of DTC. Citibank will act as depositary for Clearstream and JPMorgan Chase Bank will act as depositary for Euroclear (in such capacities, individually the “Relevant Depositary” and collectively the “European Depositaries”). Investors may hold such beneficial interests in the Book-Entry Certificates in minimum denominations of $25,000. Except as described below, no Certificate Owner acquiring a Book-Entry Certificate (each, a “beneficial owner”) will be entitled to receive a physical certificate representing such Certificate (a “Definitive Certificate”). Unless and until Definitive Certificates are issued, it is anticipated that the only “Certificateholder” of the Class A and Mezzanine Certificates will be Cede & Co., as nominee of DTC. Certificate Owners will not be Certificateholders as that term is used in the Pooling Agreement. Certificate Owners are only permitted to exercise their rights indirectly through DTC and participants of DTC (“DTC Participants”).

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

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

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

Because of time zone differences, credits of securities received in Clearstream or Euroclear as a result of a transaction with a DTC Participant will be made during subsequent securities settlement processing and dated the business day following the DTC settlement date. Such credits or any transactions in such securities settled during such processing will be reported to the relevant Euroclear Participants or Clearstream Participants (each as defined below) on such business day. Cash received in Clearstream or Euroclear as a result of sales of securities by or through a Clearstream Participant (as defined below) or Euroclear Participant (as defined below) to a DTC Participant will be received with value on the DTC settlement date but will be available in the relevant Clearstream or Euroclear cash account only as of the business day following settlement in DTC. For information with respect to tax documentation procedures relating to the Certificates, see “Federal Income Tax Consequences—REMICS—Backup Withholding With Respect to REMIC Certificates” and “—Foreign Investors in REMIC Certificates” in the prospectus and “Global Clearance, Settlement and Tax Documentation Procedures—Certain U.S. Federal Income Tax Documentation Requirements” in Annex I hereto.

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

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

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

Clearstream, 67 Bd Grande-Duchesse Charlotte, L-1331 Luxembourg, a Luxembourg limited liability company, was formed in January 2000 through the merger of Cedel International and Deutsche Boerse Clearing, the shareholders of which comprise 93 of the world’s major financial institutions.

Clearstream is registered as a bank in Luxembourg, and as such is subject to regulation by the Institute Monetaire Luxembourgeois, “IML,” the Luxembourg Monetary Authority, which supervises Luxembourg banks.

Clearstream holds securities for its customers (“Clearstream Participants”) and facilitates the clearance and settlement of securities transactions by electronic book-entry transfers between their accounts. Clearstream provides various services, including safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream also deals with domestic securities markets in several countries through established depository and custodial relationships. Clearstream has established an electronic bridge with the Euroclear Operator (as defined below) in Brussels to facilitate settlement of trades between systems. Clearstream currently accepts over 70,000 securities issues on its books.

Clearstream’s customers are world-wide financial institutions including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations. Clearstream’s United States customers are limited to securities brokers and dealers and banks. Currently, Clearstream has approximately 3,000 customers located in over 60 countries, including all major European countries, Canada, and the United States. Indirect access to Clearstream is available to other institutions which clear through or maintain a custodial relationship with an account holder of Clearstream.

Euroclear was created in 1968 to hold securities for its participants (“Euroclear Participants”) and to clear and settle transactions between Euroclear Participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. 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. The Euroclear System is owned by Euroclear plc and operated through a license agreement by the Euroclear Bank SA/NV (the “Euroclear Operator”), a bank incorporated under the laws of the Kingdom of Belgium. All operations are conducted by the Euroclear Operator, and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear Operator. 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.

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

Distributions on the Book-Entry Certificates will be made on each Distribution Date by the Trustee to Cede & Co. DTC will be responsible for crediting the amount of such payments to the accounts of the applicable DTC Participants in accordance with DTC’s normal procedures. Each DTC Participant will be responsible for disbursing such payments to the Certificate Owners of the Book-Entry Certificates that it represents and to each Financial Intermediary for which it acts as agent. Each such Financial Intermediary will be responsible for disbursing funds to the Certificate Owners of the Book-Entry Certificates that it represents.

Under a book-entry format, Certificate Owners of the Book-Entry Certificates may experience some delay in their receipt of payments, since such payments will be forwarded by the Trustee to Cede & Co. Distributions with respect to Certificates held through Clearstream or Euroclear will be credited to the cash accounts of Clearstream Participants or Euroclear Participants in accordance with the relevant system’s rules and procedures, to the extent received by the Relevant Depositary. Such distributions will be subject to tax reporting in accordance with relevant United States tax laws and regulations. See “Federal Income Tax Consequences—REMICS—Backup Withholding With Respect to REMIC Certificates” and “—Foreign Investors in REMIC Certificates” in the prospectus. Because DTC can only act on behalf of Financial Intermediaries, the ability of a Certificate Owner to pledge Book-Entry Certificates to persons or entities that do not participate in the Depository system, or otherwise take actions in respect of such Book-Entry Certificates, may be limited due to the lack of physical certificates for such Book-Entry Certificates. In addition, issuance of the Book-Entry Certificates in book-entry form may reduce the liquidity of such Certificates in the secondary market since certain potential investors may be unwilling to purchase Certificates for which they cannot obtain physical certificates.

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

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

Definitive Certificates will be issued to Certificate Owners of the Book-Entry Certificates, or their nominees, rather than to DTC or its nominee, 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 depository with respect to the Book-Entry Certificates and the Depositor or the Trustee is unable to locate a qualified successor or (b) after the occurrence of a Servicer Event of Termination (as defined in the Pooling Agreement), Certificate Owners having percentage interests aggregating not less than 51% of the Book-Entry Certificates advise the Trustee and DTC through the Financial Intermediaries and the DTC Participants in writing that the continuation of a book-entry system through DTC (or a successor thereto) is no longer in the best interests of Certificate Owners.

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

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

None of the Depositor, the Servicer 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 Certificates held by Cede & Co., as nominee for DTC, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

Allocation of Available Funds

Distributions to holders of the Class A and Mezzanine Certificates will be made on each Distribution Date from Available Funds. With respect to any Distribution Date, “Available Funds” will be equal to the sum of the following amounts with respect to the Mortgage Loans, net of amounts reimbursable therefrom to the Servicer, the Trustee or the Swap Provider (including any Net Swap Payment and any Swap Termination Payment owed to the Swap Provider but excluding any Swap Termination Payment owed to the Swap Provider resulting from a Swap Provider Trigger Event): (i) the aggregate amount of monthly payments on the Mortgage Loans due on the related Due Date and received by the Servicer by the Determination Date, after deduction of the Trustee Fee for such Distribution Date, the Servicing Fee for such Distribution Date, any accrued and unpaid Servicing Fees and Trustee Fees in respect of any prior Distribution Dates, and the PMI Premium, if applicable, for such Distribution Date, (ii) certain unscheduled payments in respect of the Mortgage Loans, including prepayments, Insurance Proceeds, Net Liquidation Proceeds, Subsequent Recoveries and proceeds from repurchases of and substitutions for such Mortgage Loans occurring during the related Prepayment Period, excluding prepayment charges, (iii) payments from the Servicer in connection with Advances and Prepayment Interest Shortfalls for such Distribution Date, (iv) amounts transferred from the Interest Coverage Account, if any and (v) at the end of the Funding Period, any excess amounts transferred from the Pre-funding Accounts. The holders of the Class P Certificates will be entitled to all prepayment charges received on or with respect to the Mortgage Loans and such amounts will not be available for distribution to the holders of the Class A and Mezzanine Certificates.

The Class I-A-1 Certificates represent an interest primarily in the Group I Mortgage Loans, and the Class II-A-1 Certificates, the Class II-A-2 Certificates, the Class II-A-3 Certificates and the Class II-A-4 Certificates represent an interest primarily in the Group II Mortgage Loans. Distributions of interest and principal to the Group I Certificates will be made first from payments relating to the Group I Mortgage Loans. Distributions of interest and principal to the Group II Certificates will be made first from payments relating to the Group II Mortgage Loans.

Interest Distributions

I.On each Distribution Date, the Trustee will withdraw from the Distribution Account that portion of Available Funds for such Distribution Date consisting of the Group I Interest Remittance Amount for such Distribution Date, and make the following disbursements and transfers in the order of priority described below, in each case to the extent of the Group I Interest Remittance Amount available for such Distribution Date:

(i)to the Class I-A-1 Certificates, the Monthly Interest Distributable Amount and the Unpaid Interest Shortfall Amount, if any, for the Class I-A-1 Certificates; and

(ii)to each class of Group II Certificates, on a pro rata basis based on the entitlement of each such class, an amount equal to the excess, if any, of (x) the amount required to be distributed pursuant to clause II(i) below for such Distribution Date over (y) the amount actually distributed pursuant to such clause from the Group II Interest Remittance Amount.

II.On each Distribution Date, the Trustee will withdraw from the Distribution Account that portion of Available Funds for such Distribution Date consisting of the Group II Interest Remittance Amount for such Distribution Date, and make the following disbursements and transfers in the order of priority described below, in each case to the extent of the Group II Interest Remittance Amount available for such Distribution Date.

(i)concurrently, to each class of Group II Certificates, on a pro rata basis based on the entitlement of each such class, the Monthly Interest Distributable Amount and the Unpaid Interest Shortfall Amount, if any, for each such class of Certificates; and

(ii)to the Class I-A-1 Certificates, an amount equal to the excess, if any, of (x) the amount required to be distributed pursuant to clause I(i) above for such Distribution Date over (y) the amount actually distributed pursuant to such clause from the Group I Interest Remittance Amount.

III.On each Distribution Date, the sum of the Group I Interest Remittance Amount and the Group II Interest Remittance Amount, remaining undistributed for such Distribution Date will be distributed, sequentially to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 Certificates, in that order, in an amount equal to the Monthly Interest Distribution Amount for each such class.

On any Distribution Date, any shortfalls resulting from the application of the Relief Act or any state law providing for similar relief and any Prepayment Interest Shortfalls to the extent not covered by Compensating Interest paid by the Servicer will be allocated, first, to the interest accrued on the Class C Certificates, and thereafter, to the Monthly Interest Distributable Amounts with respect to the Class A and Mezzanine Certificates on a pro rata basis based on the respective amounts of interest accrued on such Certificates for such Distribution Date. The holders of the Class A and Mezzanine Certificates will not be entitled to reimbursement for any such interest shortfalls.

Principal Distributions

I.On each Distribution Date (a) prior to the Stepdown Date or (b) on which a Trigger Event is in effect, distributions in respect of principal to the extent of the Group I Principal Distribution Amount will be made in the following amounts and order of priority:

(i)to the Class I-A-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and

(ii)after taking into account the amount distributed to the Group II Certificates pursuant to clause II(i) below on such Distribution Date, to the Group II Certificates (allocated as described below), until the Certificate Principal Balances thereof have been reduced to zero;

II.On each Distribution Date (a) prior to the Stepdown Date or (b) on which a Trigger Event is in effect, distributions in respect of principal to the extent of the Group II Principal Distribution Amount will be made in the following amounts and order of priority:

(i)to the Group II Certificates (allocated as described below), until the Certificate Principal Balances thereof have been reduced to zero; and

(ii)after taking into account the amount distributed to the Class I-A-1 Certificates pursuant to clause I(i) above on such Distribution Date, to the Class I-A-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero.

III.On each Distribution Date (a) prior to the Stepdown Date or (b) on which a Trigger Event is in effect, distributions in respect of principal to the extent of the sum of the Group I Principal Distribution Amount and the Group II Principal Distribution Amount remaining undistributed for such Distribution Date will be made sequentially to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 Certificates, in that order, in each case, until the Certificate Principal Balance of each such class has been reduced to zero.

IV.On each Distribution Date (a) on or after the Stepdown Date and (b) on which a Trigger Event is not in effect, distributions in respect of principal to the extent of the Group I Principal Distribution Amount will be made in the following amounts and order of priority:

(i)to the Class I-A-1 Certificates, the Group I Senior Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero; and

(ii)to the Group II Certificates (allocated as described below), an amount equal to the excess, if any, of (x) the amount required to be distributed pursuant to clause V(i) below for such Distribution Date over (y) the amount actually distributed pursuant to clause V(i) below from the Group II Principal Distribution Amount on such Distribution Date.

V.On each Distribution Date (a) on or after the Stepdown Date and (b) on which a Trigger Event is not in effect, distributions in respect of principal to the extent of the Group II Principal Distribution Amount will be made in the following amounts and order of priority:

(i)to the Group II Certificates (allocated as described below), the Group II Senior Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero; and

(ii)to the Class I-A-1 Certificates, an amount equal to the excess, if any, of (x) the amount required to be distributed pursuant to clause IV(i) above for such Distribution Date over (y) the amount actually distributed pursuant to clause IV(i) above from the Group I Principal Distribution Amount on such Distribution Date.

VI.On each Distribution Date (a) on or after the Stepdown Date and (b) on which a Trigger Event is not in effect, distributions in respect of principal to the extent of the sum of the Group I Principal Distribution Amount and the Group II Principal Distribution Amount remaining undistributed for such Distribution Date will be made in the following amounts and order of priority:

(i)sequentially, to the Class M-1, Class M-2 and Class M-3 Certificates, in that order, the Class M-1/M-2/M-3 Principal Distribution Amount until the Certificate Principal Balances thereof have been reduced to zero;

(ii)to the Class M-4 Certificates, the Class M-4 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero;

(iii)to the Class M-5 Certificates, the Class M-5 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero;

(iv)to the Class M-6 Certificates, the Class M-6 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero;

(v)to the Class M-7 Certificates, the Class M-7 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero;

(vi)to the Class M-8 Certificates, the Class M-8 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero;

(vii)to the Class M-9 Certificates, the Class M-9 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero;

(viii)to the Class M-10 Certificates, the Class M-10 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero; and

(ix)to the Class M-11 Certificates, the Class M-11 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero.

With respect to the Group II Certificates, all principal distributions will be distributed sequentially to the Class II-A-1 Certificates, Class II-A-2 Certificates, Class II-A-3 Certificates and Class II-A-4 Certificates, in that order, until the Certificate Principal Balance of each such class of certificates has been reduced to zero; provided however, that on any Distribution Date on which the aggregate Certificate Principal Balance of the Subordinate Certificates has been reduced to zero, all principal distributions will be distributed to the Group II Certificates pro rata basis based on the Certificate Principal Balance of each such class.

The allocation of distributions in respect of principal to the Class A Certificates on each Distribution Date (a) prior to the Stepdown Date or (b) on which a Trigger Event is in effect, will have the effect of accelerating the amortization of the Class A Certificates while, in the absence of Realized Losses, increasing the respective percentage interest in the aggregate principal balance of the Mortgage Loans evidenced by the Subordinate Certificates. Increasing the respective percentage interest in the Trust of the Subordinate Certificates relative to that of the Class A Certificates is intended to preserve the availability of the subordination provided by the Subordinate Certificates.

Credit Enhancement

The credit enhancement provided for the benefit of the holders of the Class A and Mezzanine Certificates consists of subordination, as described below, excess interest and overcollateralization, as described under “—Allocation of Losses; Subordination” and “—Overcollateralization Provisions” herein, and the PMI Policy as described under “—The Mortgage Insurance Policy” herein. The holders of the Class A and Mezzanine Certificates will also have the benefit of certain proceeds received pursuant to the Interest Rate Swap Agreement, as described under “—Interest Rate Swap Agreement, the Swap Provider and the Supplemental Interest Trust” herein.

The rights of the holders of the Subordinate Certificates to receive distributions will be subordinated, to the extent described herein, to the rights of the holders of the Class A Certificates. This subordination is intended to enhance the likelihood of regular receipt by the holders of the Class A Certificates of the full amount of their scheduled monthly payments of interest and principal and to afford such holders protection against Realized Losses.

The protection afforded to the holders of the Class A Certificates by means of the subordination of the Subordinate Certificates will be accomplished by the preferential right of the holders of the Class A Certificates to receive on any Distribution Date, prior to distribution on the Subordinate Certificates, distributions in respect of interest and principal, subject to funds available for such distributions.

In addition, the rights of the holders of Mezzanine Certificates with lower numerical class designations will be senior to the rights of holders of Mezzanine Certificates with higher numerical class designations, and the rights of the holders of the Mezzanine Certificates to receive distributions in respect of the Mortgage Loans will be senior to the rights of the holders of the Class C Certificates, in each case to the extent described herein. This subordination is intended to enhance the likelihood of regular receipt by the holders of more senior Certificates of distributions in respect of interest and principal and to afford such holders protection against Realized Losses.

Overcollateralization Provisions

The weighted average Adjusted Net Mortgage Rate for the Mortgage Loans is generally expected to be higher than the weighted average of the Pass-Through Rates on the Class A and Mezzanine Certificates. As a result, interest collections on the Mortgage Loans are expected to exceed the amount of interest payable to the holders of Class A and Mezzanine Certificates and the fees and expenses payable by the Trust (including any Net Swap Payment owed to the Swap Provider and any Swap Termination Payment owed to the Swap Provider, other than any Swap Termination Payment resulting from a Swap Provider Trigger Event). The Pooling Agreement requires that, on each Distribution Date, the Net Monthly Excess Cashflow, if any, be applied on such Distribution Date as an accelerated payment of principal on the class or classes of Class A and Mezzanine Certificates then entitled to receive distributions in respect of principal, but only to the limited extent hereafter described.

With respect to any Distribution Date, any Net Monthly Excess Cashflow will be paid as follows:

(i)to the holders of the class or classes of Certificates then entitled to receive distributions in respect of principal, in an amount equal to any Extra Principal Distribution Amount, distributable to such holders as part of the Group I Principal Distribution Amount and/or the Group II Principal Distribution Amount as described under “—Allocation of Available Funds—Principal Distributions” above;

(ii)sequentially , to the holders of theClass M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 Certificates, in that order, in each case, first up to the Unpaid Interest Shortfall Amount for each such class and second up to the Allocated Realized Loss Amount, for each such class;

(iii)to the Net WAC Rate Carryover Reserve Account, the amount of any Net WAC Rate Carryover Amounts on the Class A and Mezzanine Certificates for such Distribution Date;

(iv)to the Swap Provider, any Swap Termination Payments resulting from a Swap Provider Trigger Event;

(v)to the holders of the Class C Certificates as provided in the Pooling Agreement;

(vi)if such Distribution Date follows the Prepayment Period during which occurs the latest date on which a prepayment charge may be required to be paid in respect of any Mortgage Loan, to the holders of the Class P Certificates, in reduction of the Certificate Principal Balance thereof, until the Certificate Principal Balance thereof is reduced to zero; and

(vii)any remaining amounts to the holders of the Residual Certificates as provided in the Pooling Agreement.

On each Distribution Date, after making the distributions of the Available Funds as described above, the Trustee will withdraw from the Net WAC Rate Carryover Reserve Account any amount deposited therein pursuant to subclause (iii) above and will distribute these amounts to the holders of the Class A and Mezzanine Certificates in the order and priority set forth under “—Pass-Through Rates” herein.

On each Distribution Date, the Trustee will withdraw from the Distribution Account all amounts representing prepayment charges in respect of the Mortgage Loans received during the related Prepayment Period and will distribute these amounts to the holders of the Class P Certificates.

In the event that the Overcollateralization Target Amount is permitted to step down on any Distribution Date, the Pooling Agreement provides that a portion of the principal which would otherwise be distributed to the holders of the Class A and Mezzanine Certificates on such Distribution Date will be distributed to the holders of the Class C Certificates pursuant to the priorities set forth above. This has the effect of decelerating the amortization of the Class A and Mezzanine Certificates relative to the amortization of the Mortgage Loans, and of reducing the Overcollateralized Amount. However, if on any Distribution Date a Trigger Event is in effect, the Overcollateralization Target Amount will not be permitted to step down on such Distribution Date.

The PMI Insurer

Mortgage Guaranty Insurance Corporation (the “PMI Insurer”), a wholly-owned subsidiary of MGIC Investment Corporation, is a Wisconsin corporation, founded in 1985, that is a private mortgage insurance company with its administrative offices located in Milwaukee, Wisconsin. As of the date of this prospectus supplement, the PMI Insurer had insurer financial strength ratings of “AA” from S&P, “AA+” from Fitch and “Aa2” from Moody’s. The rating agencies issuing the insurer financial strength rating with respect to the PMI Insurer can withdraw or change its rating at any time.

The PMI Policy

Approximately 16.89% of the Initial Group I Mortgage Loans and approximately 10.98% of the Initial Group II Mortgage Loans (in each case, by aggregate principal balance of the related Loan Group as of the Cut-off Date), are covered by a primary mortgage insurance policy issued by the PMI Insurer (the “PMI Policy,” and the Mortgage Loans covered by such policy, the “PMI Mortgage Loans”).

The PMI Policy does not cover any mortgage loans 60 days or more delinquent in payment as of the Cut-off Date. Each PMI Mortgage Loan is covered for losses up to the policy limits; provided, however, that the PMI Policy will not cover special hazard, bankruptcy or fraud losses or certain other types of losses as provided in the PMI Policy. Claims on an insured mortgage loan generally will reduce uninsured exposure to an amount equal to 60% of the lesser of the appraised value as of the origination date or the purchase price, as the case may be, of the related mortgaged property, subject to conditions, exceptions and exclusions and assuming that any pre-existing primary mortgage insurance policy covering the mortgage loan remains in effect and a full claim settlement is made thereunder.

The PMI Policy is required to remain in force with respect to each PMI Mortgage Loan until: (i) the principal balance of the PMI Mortgage Loan is paid in full; (ii) the principal balance of the PMI Mortgage Loan has amortized down to a level that results in a loan-to-value ratio for the mortgage loan of 55% or less (provided, however, that no coverage of any PMI Mortgage Loan under such PMI Policy is required where prohibited by applicable law); or (iii) any event specified in the PMI Policy occurs that allows for the termination of the PMI Policy by the PMI Insurer or cancellation of the PMI Policy by the insured.

The PMI Policy may not be assigned or transferred without the prior written consent of the PMI Insurer; provided, however, that the PMI Insurer has previously provided written consent to the assignment of coverage on all Mortgage Loans from the Trustee to any successor Trustee, provided that in each case, prompt notice of such assignment is provided to the PMI Insurer.

The PMI Policy generally requires that delinquencies on any PMI Mortgage Loan must be reported to the PMI Insurer within four months of default, that reports regarding the delinquency of the PMI Mortgage Loan must be submitted to the PMI Insurer on a monthly basis thereafter, and that appropriate proceedings to obtain title to the property securing such PMI Mortgage Loan must be commenced within six months of default. As a condition to submitting a claim under the PMI Policy, the insured must have (i) acquired, and tendered to the PMI Insurer, good and merchantable title to the property securing the PMI Mortgage Loan, free and clear of all liens and encumbrances, including, but not limited to, any right of redemption by the mortgagor unless such acquisition of good and merchantable title is excused under the terms of such PMI Policy, and (ii) if the PMI Mortgage Loan is covered by a pre-existing primary mortgage insurance policy, a claim must be submitted and settled under such pre-existing primary mortgage insurance policy within the time frames specified in the PMI Policy.

The claim amount generally includes unpaid principal, accrued interest to the date of such tender to the PMI Insurer by the insured, and certain expenses (less the amount of a full claim settlement under any pre-existing primary mortgage insurance policy covering the PMI Mortgage Loan). When a claim is presented, the PMI Insurer will have the option of either (i) paying the claim amount and taking title to the property securing the PMI Mortgage Loan, (ii) paying the insured a percentage of the claim amount (without deduction for a claim settlement under any pre-existing primary mortgage insurance policy covering the PMI Mortgage Loan) and with the insured retaining title to the property securing such PMI Mortgage Loan, or (iii) if the property securing the PMI Mortgage Loan has been sold to a third party with the prior approval of the PMI Insurer, paying the claim amount reduced by the net sale proceeds as described in the PMI Policy to reflect the actual loss.

Claims generally must be filed within 60 days after the insured has acquired good and merchantable title to the property securing the PMI Mortgage Loan or such property has been sold to a third party with the prior approval of the PMI Insurer. A claim generally must be paid within 60 days after the claim is filed by the insured. No payment for a loss will be made under the PMI Policy unless the property securing the PMI Mortgage Loan is in the same physical condition as when such PMI Mortgage Loan was originally insured, except for reasonable wear and tear, and unless premiums on the standard homeowners’ insurance policy, real estate taxes and foreclosure protection and preservation expenses have been advanced by or on behalf of the insured.

If a claim submitted under the PMI Policy is incomplete, the PMI Insurer is required to provide notification of all information and documentation required to perfect the claim within 20 days of the PMI Insurer's receipt of such incomplete claim. In such case, payment of the claim will be suspended until such information and documentation are provided to the PMI Insurer, provided that the PMI Insurer is not required to pay the claim if it is not perfected within 180 days after its initial filing.

Unless approved in writing by the PMI Insurer, no changes may be made to the terms of the PMI Mortgage Loan, including the borrowed amount, interest rate, term or amortization schedule, except as specifically permitted by the terms of the PMI Mortgage Loan; nor may the lender make any change in the property or other collateral securing the PMI Mortgage Loan, nor may any mortgagor be released under the PMI Mortgage Loan from liability. If a PMI Mortgage Loan is assumed with the insured’s approval, the PMI Insurer’s liability for coverage of the PMI Mortgage Loan under the PMI Policy generally will terminate as of the date of such assumption unless the PMI Insurer approves the assumption in writing. In addition, with respect to any PMI Mortgage Loan covered by the PMI Policy, the applicable servicer must obtain the prior approval of the PMI Insurer in connection with any acceptance of a deed in lieu of foreclosure or of any sale of the property securing the PMI Mortgage Loan.

The PMI Policy excludes coverage of: (i) any claim where the insurer under any pre-existing primary mortgage insurance policy has acquired the property securing the PMI Mortgage Loan; (ii) any claim resulting from a default occurring after lapse or cancellation of coverage; (iii) certain claims resulting from a default existing at the inception of coverage; (iv) certain claims where there is an environmental condition which existed on the property securing the PMI Mortgage Loan (whether or not known by the person or persons submitting an application for coverage of the PMI Mortgage Loan) as of the effective date of coverage; (v) any claim, if the mortgage, deed of trust or other similar instrument did not provide the insured at origination with a first lien on the property securing the PMI Mortgage Loan; (vi) certain claims involving or arising out of any breach by the insured of its obligations under, or its failure to comply with, the terms of the PMI Policy or of its obligations as imposed by operation of law; (vii) certain claims resulting from physical damage to a property securing a PMI Mortgage Loan; (viii) any claim arising from the failure of the borrower under a covered PMI Mortgage Loan to make any balloon payment, if applicable, under such PMI Mortgage Loan; and (ix) any claim submitted in connection with a PMI Mortgage Loan if the PMI Mortgage Loan did not meet the PMI Insurer’s requirements applicable to the origination of the PMI Mortgage Loan.

In issuing the PMI Policy, the PMI Insurer has relied upon certain information and data regarding the PMI Mortgage Loans furnished to it by the Originator. The PMI Policy will not insure against certain losses sustained by reason of a default arising from or involving certain matters, including: (i) misrepresentation made, or knowingly participated in, by the lender, other persons involved in the origination of the PMI Mortgage Loan or the application for insurance, or made by any appraiser or other person providing valuation information regarding the property securing the PMI Mortgage Loan; (ii) negligence or fraud by the applicable servicer of the PMI Mortgage Loan; and (iii) failure to construct a property securing a PMI Mortgage Loan in accordance with specified plans. The PMI Policy permits the PMI Insurer to cancel coverage of a PMI Mortgage Loan under the PMI Policy or deny any claim submitted under the PMI Policy in connection with a PMI Mortgage Loan if the insured fails to furnish the PMI Insurer with copies of all documents in connection with the origination or servicing of a covered PMI Mortgage Loan.

The PMI Policy provides less than 10% of the cash flow used to support the Offered Certificates, and the PMI Insurer is not a significant enhancement provider as described under Regulation AB Item 1114. The PMI Insurer may be replaced in certain circumstances, including if the PMI Policy provides 10% or more of the cash flow used to support the Offered Certificates and the PMI Insurer fails to comply with the reporting requirements as set forth in the PMI Policy.

The preceding description of the PMI Policy is only a brief outline and does not purport to summarize or describe the provisions, terms and conditions of the PMI Policy. For a more complete description of these provisions, terms and conditions, reference is made to the PMI Policy, a copy of which is available upon request from the Trustee.

Allocation of Losses; Subordination

Any Realized Losses on the Mortgage Loans will be allocated on any Distribution Date, first, to the interest accrued on the Class C Certificates, second, to Net Swap Payments received under the Interest Rate Swap Agreement, third, to the Class C Certificates, fourth, to the Class M-11 Certificates, fifth, to the Class M-10 Certificates, sixth, to the Class M-9 Certificates, seventh, to the Class M-8 Certificates, eighth, to the Class M-7 Certificates, ninth, to the Class M-6 Certificates, tenth, to the Class M-5 Certificates, eleventh, to the Class M-4 Certificates, twelfth, to the Class M-3 Certificates, thirteenth, to the Class M-2 Certificates and fourteenth, to the Class M-1 Certificates, until their Certificate Principal Balances are reduced to zero.

The Pooling Agreement does not permit the allocation of Realized Losses to the Class A Certificates or the Class P Certificates. Investors in the Class A Certificates should note that although Realized Losses cannot be allocated to such Certificates, under certain loss scenarios there may not be enough interest and principal on the Mortgage Loans to distribute to the Class A Certificates all interest and principal amounts to which they are then entitled.

Once Realized Losses have been allocated to the Mezzanine Certificates, such amounts with respect to such Certificates will no longer accrue interest nor will such amounts be reinstated thereafter (except to the extent of Subsequent Recoveries as set forth in the Pooling Agreement). However, Allocated Realized Loss Amounts may be paid to the holders of the Mezzanine Certificates from Net Monthly Excess Cashflow, according to the priorities set forth under “—Overcollateralization Provisions” above or from the Swap Account, according to the priorities set forth under “—Interest Rate Swap Agreement, the Swap Provider and the Supplemental Interest Trust” below.

Any allocation of a Realized Loss to a Certificate will be made by reducing the Certificate Principal Balance thereof by the amount so allocated as of the Distribution Date in the month following the calendar month in which such Realized Loss was incurred. Notwithstanding anything to the contrary described herein, in no event will the Certificate Principal Balance of any Certificate be reduced more than once in respect of any particular amount both (i) allocable to such Certificate in respect of Realized Losses and (ii) distributable as principal to the holder of such Certificate from Net Monthly Excess Cashflow.

Definitions

Many of the defined terms listed below may apply to both Loan Groups/Certificate Groups and are sometimes used in this prospectus supplement to refer to a particular Loan Group/Certificate Group by the use of the words “Group I” and “Group II.”

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

An “Allocated Realized Loss Amount” with respect to any class of the Mezzanine Certificates and any Distribution Date is an amount equal to the sum of any Realized Loss allocated to that class of Certificates on the Distribution Date and any Allocated Realized Loss Amount for that class remaining unpaid from the previous Distribution Date as reduced by an amount equal to the increase in the related Certificate Principal Balance due to the receipt of Subsequent Recoveries.

The “Certificate Principal Balance” of any Class A, Mezzanine or Class P Certificate immediately prior to any Distribution Date will be equal to the Certificate Principal Balance thereof on the Closing Date (the “Original Certificate Principal Balance”) reduced by the sum of all amounts actually distributed in respect of principal of such class and Realized Losses allocated thereto on all prior Distribution Dates. The Certificate Principal Balance of any class of Mezzanine Certificates with respect to which there is an unpaid Allocated Realized Loss Amount may be increased by the amount of any Subsequent Recoveries as set forth in the Pooling Agreement. The “Certificate Principal Balance” of the Class C Certificates as of any date of determination is equal to the excess, if any, of (a) the then aggregate Principal Balance of the Mortgage Loans over (b) the then aggregate Certificate Principal Balances of the Class A Certificates, Mezzanine Certificates and Class P Certificates.

The “Class A Principal Distribution Amount” is an amount equal to the sum of (i) the Group I Senior Principal Distribution Amount and (ii) the Group II Senior Principal Distribution Amount.

The “Class M-1/M-2/M-3 Principal Distribution Amount” is an amount, not less than zero, equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A (after taking into account the distribution of the Class A Principal Distribution Amount on such Distribution Date) and (ii) the aggregate Certificate Principal Balance of the Class M-1, Class M-2 and Class M-3 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 78.50% and (ii) the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the positive difference, if any, of the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus the Overcollateralization Floor.

The “Class M-4 Principal Distribution Amount” is an amount, not less than zero, equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date) and (v) the Certificate Principal Balance of the Class M-4 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 82.10% and (ii) the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the positive difference, if any, of the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus the Overcollateralization Floor.

The “Class M-5 Principal Distribution Amount” is an amount, not less than zero, equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date) and (vi) the Certificate Principal Balance of the Class M-5 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 85.40% and (ii) the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the positive difference, if any, of the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus the Overcollateralization Floor.

The “Class M-6 Principal Distribution Amount” is an amount, not less than zero, equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount on such Distribution Date) and (vii) the Certificate Principal Balance of the Class M-6 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 87.80% and (ii) the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the positive difference, if any, of the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus the Overcollateralization Floor.

The “Class M-7 Principal Distribution Amount” is an amount, not less than zero, equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount on such Distribution Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the distribution of the Class M-6 Principal Distribution Amount on such Distribution Date) and (viii) the Certificate Principal Balance of the Class M-7 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 90.30% and (ii) the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the positive difference, if any, of the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus the Overcollateralization Floor.

The “Class M-8 Principal Distribution Amount” is an amount, not less than zero, equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount on such Distribution Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the distribution of the Class M-6 Principal Distribution Amount on such Distribution Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates (after taking into account the distribution of the Class M-7 Principal Distribution Amount on such Distribution Date) and (ix) the Certificate Principal Balance of the Class M-8 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 91.90% and (ii) the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the positive difference, if any, of the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus the Overcollateralization Floor.

The “Class M-9 Principal Distribution Amount” is an amount, not less than zero, equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount on such Distribution Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the distribution of the Class M-6 Principal Distribution Amount on such Distribution Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates (after taking into account the distribution of the Class M-7 Principal Distribution Amount on such Distribution Date), (ix) the Certificate Principal Balance of the Class M-8 Certificates (after taking into account the distribution of the Class M-8 Principal Distribution Amount on such Distribution Date) and (x) the Certificate Principal Balance of the Class M-9 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 94.20% and (ii) the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the positive difference, if any, of the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus the Overcollateralization Floor.

The “Class M-10 Principal Distribution Amount” is an amount, not less than zero, equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount on such Distribution Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the distribution of the Class M-6 Principal Distribution Amount on such Distribution Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates (after taking into account the distribution of the Class M-7 Principal Distribution Amount on such Distribution Date), (ix) the Certificate Principal Balance of the Class M-8 Certificates (after taking into account the distribution of the Class M-8 Principal Distribution Amount on such Distribution Date), (x) the Certificate Principal Balance of the Class M-9 Certificates (after taking into account the distribution of the Class M-9 Principal Distribution Amount on such Distribution Date) and (xi) the Certificate Principal Balance of the Class M-10 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 96.70% and (ii) the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the positive difference, if any, of the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus the Overcollateralization Floor.

The “Class M-11 Principal Distribution Amount” is an amount, not less than zero, equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the distribution of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount on such Distribution Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the distribution of the Class M-6 Principal Distribution Amount on such Distribution Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates (after taking into account the distribution of the Class M-7 Principal Distribution Amount on such Distribution Date), (ix) the Certificate Principal Balance of the Class M-8 Certificates (after taking into account the distribution of the Class M-8 Principal Distribution Amount on such Distribution Date), (x) the Certificate Principal Balance of the Class M-9 Certificates (after taking into account the distribution of the Class M-9 Principal Distribution Amount on such Distribution Date), (xi) the Certificate Principal Balance of the Class M-10 Certificates (after taking into account the distribution of the Class M-10 Principal Distribution Amount on such Distribution Date) and (xi) the Certificate Principal Balance of the Class M-11 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 98.70% and (ii) the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the positive difference, if any, of the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus the Overcollateralization Floor.

A Mortgage Loan is “Delinquent” if any monthly payment due on a Due Date is not made by the close of business on the next scheduled Due Date for such Mortgage Loan.

The “Determination Date” with respect to any Distribution Date will be the 15^th day of the calendar month in which such Distribution Date occurs or, if such 15^th day is not a Business Day, the Business Day immediately preceding such 15^th day.

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

The “Extra Principal Distribution Amount” for any Distribution Date, is the lesser of (x) the Net Monthly Excess Cashflow for such Distribution Date and (y) the Overcollateralization Deficiency Amount for such Distribution Date.

The “Group I Allocation Percentage” for any Distribution Date is the percentage equivalent of a fraction, the numerator of which is (i) the Group I Principal Remittance Amount for such Distribution Date, and the denominator of which is (ii) the Principal Remittance Amount for such Distribution Date.

The “Group I Basic Principal Distribution Amount” means with respect to any Distribution Date the excess of (i) the Group I Principal Remittance Amount for such Distribution Date over (ii) the Overcollateralization Release Amount, if any, for such Distribution Date multiplied by the Group I Allocation Percentage.

The “Group I Interest Remittance Amount” with respect to any Distribution Date is that portion of the Available Funds for such Distribution Date attributable to interest received or advanced with respect to the Group I Mortgage Loans minus a pro rata portion (based on the Certificate Principal Balance of the Group I Certificates over the aggregate Certificate Principal Balance of the Class A Certificates) of the sum of any Net Swap Payment owed to the Swap Provider on that Distribution Date and any Swap Termination Payment or unpaid portion thereof owed to the Swap Provider on that Distribution Date (other than a Swap Termination Payment resulting from a Swap Provider Trigger Event).

The “Group I Overcollateralization Floor” with respect to Group I Certificates is approximately $3,475,303.

The “Group I Principal Distribution Amount” with respect to any Distribution Date is the sum of (i) the Group I Basic Principal Distribution Amount for such Distribution Date and (ii) the Extra Principal Distribution Amount for such Distribution Date multiplied by the Group I Allocation Percentage.

The “Group I Principal Remittance Amount” means with respect to any Distribution Date, the sum of (i) all scheduled payments of principal collected or advanced on the Group I Mortgage Loans by the Servicer that were due during the related Due Period, (ii) the principal portion of all partial and full principal prepayments of the Group I Mortgage Loans applied by the Servicer during such Prepayment Period, (iii) the principal portion of all related Net Liquidation Proceeds, Subsequent Recoveries and Insurance Proceeds received during such Prepayment Period with respect to the Group I Mortgage Loans, (iv) that portion of the Purchase Price, representing principal of any repurchased Group I Mortgage Loan, deposited to the Collection Account during such Prepayment Period, (v) the principal portion of any related Substitution Adjustments deposited in the Collection Account during such Prepayment Period with respect to the Group I Mortgage Loans, (vi) on the Distribution Date on which the Trust is to be terminated in accordance with the Pooling Agreement, that portion of the Termination Price, representing principal with respect to the Group I Mortgage Loans and (vii) on the Distribution Date immediately following the end of the Funding Period, any amounts remaining in the Group I Pre-Funding Account after giving effect to any purchase of Subsequent Group I Mortgage Loans.

The “Group I Senior Principal Distribution Amount” is an amount, not less than zero, equal to the excess of (x) the aggregate Certificate Principal Balance of the Group I Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 55.10% and (ii) the aggregate Principal Balance of the Group I Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the positive difference, if any, of the aggregate Principal Balance of the Group I Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus the Group I Overcollateralization Floor.

The “Group II Allocation Percentage” for any Distribution Date is the percentage equivalent of a fraction, the numerator of which is (i) the Group II Principal Remittance Amount for such Distribution Date, and the denominator of which is (ii) the Principal Remittance Amount for such Distribution Date.

The “Group II Basic Principal Distribution Amount” means with respect to any Distribution Date the excess of (i) the Group II Principal Remittance Amount for such Distribution Date over (ii) the Overcollateralization Release Amount, if any, for such Distribution Date multiplied by the Group II Allocation Percentage.

The “Group II Interest Remittance Amount” with respect to any Distribution Date is that portion of the Available Funds for such Distribution Date attributable to interest received or advanced with respect to the Group II Mortgage Loans minus a pro rata portion (based on the aggregate Certificate Principal Balance of the Group II Certificates over the aggregate Certificate Principal Balance of the Class A Certificates) of the sum of any Net Swap Payment owed to the Swap Provider on that Distribution Date and any Swap Termination Payment or unpaid portion thereof owed to the Swap Provider on that Distribution Date (other than a Swap Termination Payment resulting from a Swap Provider Trigger Event).

The “Group II Overcollateralization Floor” with respect to Group II Certificates is approximately $4,024,697.

The “Group II Principal Distribution Amount” with respect to any Distribution Date is the sum of (i) the Group II Basic Principal Distribution Amount for such Distribution Date and (ii) the Extra Principal Distribution Amount for such Distribution Date multiplied by the Group II Allocation Percentage.

The “Group II Principal Remittance Amount” means with respect to any Distribution Date, the sum of (i) all scheduled payments of principal collected or advanced on the Group II Mortgage Loans by the Servicer that were due during the related Due Period, (ii) the principal portion of all partial and full principal prepayments of the Group II Mortgage Loans applied by the Servicer during such Prepayment Period, (iii) the principal portion of all related Net Liquidation Proceeds, Subsequent Recoveries and Insurance Proceeds received during such Prepayment Period with respect to the Group II Mortgage Loans, (iv) that portion of the Purchase Price, representing principal of any repurchased Group II Mortgage Loan, deposited to the Collection Account during such Prepayment Period, (v) the principal portion of any related Substitution Adjustments deposited in the Collection Account during such Prepayment Period with respect to the Group II Mortgage Loans, (vi) on the Distribution Date on which the Trust is to be terminated in accordance with the Pooling Agreement, that portion of the Termination Price, representing principal with respect to the Group II Mortgage Loans and (vii) on the Distribution Date immediately following the end of the Funding Period, any amounts remaining in the Group II Pre-Funding Account after giving effect to any purchase of Subsequent Group II Mortgage Loans.

The “Group II Senior Principal Distribution Amount” is an amount, not less than zero, equal to the excess of (x) the aggregate Certificate Principal Balance of the Group II Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 55.10% and (ii) the aggregate Principal Balance of the Group II Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the positive difference, if any, of the aggregate Principal Balance of the Group II Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus the Group II Overcollateralization Floor.

“Insurance Proceeds” means the proceeds of any title policy, hazard policy or other insurance policy covering a Mortgage Loan (including the PMI Policy) to the extent such proceeds are not to be applied to the restoration of the related Mortgaged Property or released to the mortgagor in accordance with the procedures that the Servicer would follow in servicing mortgage loans held for its own account, subject to the terms and conditions of the related mortgage note and Mortgage.

The “Monthly Interest Distributable Amount” for any Distribution Date and any class of Class A and Mezzanine Certificates equals the amount of interest accrued during the related Accrual Period at the related Pass-Through Rate on the Certificate Principal Balance of such class immediately prior to such Distribution Date, reduced by any Prepayment Interest Shortfalls allocated to such class and shortfalls resulting from the application of the Relief Act or any state law providing for similar relief (allocated to each Certificate based on its respective entitlements to interest irrespective of any Prepayment Interest Shortfalls or shortfalls resulting from the application of the Relief Act for such Distribution Date).

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

An “Overcollateralization Deficiency Amount” with respect to any Distribution Date equals the amount, if any, by which the Overcollateralization Target Amount exceeds the Overcollateralized Amount on such Distribution Date (after giving effect to distributions in respect of the Group I Basic Principal Distribution Amount and the Group II Basic Principal Distribution Amount on such Distribution Date).

The “Overcollateralization Floor” is approximately $7,500,000.

“Overcollateralization Release Amount” means, with respect to any Distribution Date, the lesser of (x) the Principal Remittance Amount for such Distribution Date and (y) the excess, if any, of (i) the Overcollateralized Amount for such Distribution Date (assuming that 100% of the Principal Remittance Amount is applied as a principal payment on such Distribution Date) over (ii) the Overcollateralization Target Amount for such Distribution Date.

The “Overcollateralization Target Amount” for any Distribution Date (x) prior to the Stepdown Date will be approximately 0.65% of the sum of (i) the aggregate Principal Balance of the Closing Date Mortgage Loans as of the Cut-off Date and (ii) the amounts on deposit in the Pre-Funding Accounts on the Closing Date and (y) on or after the Stepdown Date will be the lesser of the amounts set forth in clause (x) and approximately 1.30% of the aggregate Principal Balance of the Mortgage Loans for the related Distribution Date, subject to a floor equal to 0.50% of the sum of (i) the aggregate Principal Balance of the Closing Date Mortgage Loans as of the Cut-off Date and (ii) amounts on deposit in the Pre-Funding Accounts on the Closing Date; provided however, if a Trigger Event is in effect on such Distribution Date, the Overcollateralization Target Amount will be equal to the Overcollateralization Target Amount for the previous Distribution Date.

Notwithstanding the foregoing, the percentages in the definition of Overcollateralization Target Amount are subject to a variance of plus or minus 5%.

The “Overcollateralized Amount” for any Distribution Date is the amount, equal to (i) the sum of the aggregate Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and any funds on deposit in the Pre-Funding Accounts on the related Determination Date minus (ii) the sum of the aggregate Certificate Principal Balance of the Class A, Mezzanine and Class P Certificates as of such Distribution Date (after giving effect to distributions to be made on such Distribution Date).

The “PMI Premium Rate” for each Distribution Date is equal to 1.00% per annum on the PMI Mortgage Loans.

The “Prepayment Period” for any Distribution Date is the period commencing on the day after the Determination Date in the month preceding the month in which such Distribution Date falls (or, in the case of the first Distribution Date, from October 1, 2006) and ending on the Determination Date of the calendar month in which such Distribution Date falls.

The “Principal Remittance Amount” for any Distribution Date is the sum of the Group I Principal Remittance Amount and the Group II Principal Remittance Amount.

“Realized Loss” means, with respect to any defaulted Mortgage Loan that is finally liquidated (a “Liquidated Mortgage Loan”), the amount of loss realized equal to the portion of the Principal Balance remaining unpaid after application of all liquidation proceeds, insurance proceeds or condemnation proceeds net of amounts reimbursable to the Servicer for related Advances, Servicing Advances and Servicing Fees (such amount, the “Net Liquidation Proceeds”) in respect of such Mortgage Loan. If the Servicer receives Subsequent Recoveries with respect to any Mortgage Loan, the amount of the Realized Loss with respect to that Mortgage Loan will be deemed reduced to the extent such recoveries are included in the Principal Remittance Amount on any Distribution Date.

The “Senior Credit Enhancement Percentage” for any Distribution Date is the percentage obtained by dividing (x) the aggregate Certificate Principal Balance of the Subordinate Certificates by (y) the aggregate Principal Balance of the Mortgage Loans plus any amounts on deposit in the Pre-Funding Accounts, calculated prior to taking into account distributions of principal on the Mortgage Loans and distribution of the Principal Distribution Amount to the Certificateholders then entitled to distributions of principal on such Distribution Date.

The “Stepdown Date” means the earlier to occur of (i) the first Distribution Date after the Distribution Date on which the aggregate Certificate Principal Balance of the Class A Certificates has been reduced to zero and (ii) the later to occur of (x) the Distribution Date occurring in November 2009 and (y) the first Distribution Date on which the Senior Credit Enhancement Percentage (calculated for this purpose only after taking into account distributions of principal on the Mortgage Loans and distribution of the Group I Principal Distribution Amount and the Group II Principal Distribution Amount to the Certificateholders then entitled to distributions of principal on such Distribution Date) is greater than or equal to approximately 44.90%.

The “Strike Rate” for any Distribution Date is 5.085%.

“Subsequent Recoveries” are, in the case of any Distribution Date, unexpected amounts received by the Servicer (net of any related reimbursable expenses) specifically related to a Mortgage Loan as to which a Realized Loss was incurred in connection with a final liquidation of such Mortgage Loan occurring prior to the Prepayment Period for such Distribution Date. It is not expected that there will be any material amount of Subsequent Recoveries.

A “Trigger Event” is in effect with respect to any Distribution Date on or after the Stepdown Date if:

(a)the percentage obtained by dividing (x) the principal amount of Mortgage Loans Delinquent 60 days or more by (y) the aggregate principal balance of the Mortgage Loans, in each case, as of the last day of the previous calendar month, exceeds 35.60% of the Senior Credit Enhancement Percentage; or

(b)the aggregate amount of Realized Losses incurred since the Cut-off Date through the last day of the related Due Period (after reduction for all Subsequent Recoveries received from the Cut-off Date through the last day of the related Due Period) divided by the aggregate principal balance of the Closing Date Mortgage Loans as of the Cut-off Date plus the Original Pre-Funded Amounts exceeds the applicable percentages set forth below with respect to such Distribution Date:

Distribution Date Occurring In	Percentage
November 2008 - October 2009	1.45% for July 2008, plus 1/12 of 1.75% thereafter
November 2009 - October 2010	3.20% for July 2009, plus 1/12 of 1.80% thereafter
November 2010 - October 2011	5.00% for July 2010, plus 1/12 of 1.40% thereafter
November 2011 - October 2012	6.40% for July 2011, plus 1/12 of 0.70% thereafter
November 2012 and thereafter	7.10%

Notwithstanding the foregoing, the percentages in the definition of Trigger Event are subject to a variance of plus or minus 5%.

The “Trustee Fee Rate” for each Distribution Date is equal to 0.0030% per annum.

The “Unpaid Interest Shortfall Amount” means (i) for each class of Class A and Mezzanine Certificates and the first Distribution Date, zero, and (ii) with respect to each class of Class A and Mezzanine Certificates and any Distribution Date after the first Distribution Date, the amount, if any, by which (a) the sum of (1) the Monthly Interest Distributable Amount for such Class for the immediately preceding Distribution Date and (2) the outstanding Unpaid Interest Shortfall Amount, if any, for such class for such preceding Distribution Date exceeds (b) the aggregate amount distributed on such class in respect of interest pursuant to clause (a) of this definition on such preceding Distribution Date, plus interest on the amount of interest due but not paid on the Certificates of such class on such preceding Distribution Date, to the extent permitted by law, at the Pass-Through Rate for such class for the related Accrual Period.

Pass-Through Rates

The “Pass-Through Rate” on any Distribution Date with respect to the Class A and Mezzanine Certificates will equal the lesser of (a) the related Formula Rate and (b) the Net WAC Rate for such Distribution Date. With respect to the Class A and Mezzanine Certificates, interest in respect of any Distribution Date will accrue during the related Accrual Period on the basis of a 360-day year and the actual number of days elapsed.

The “Formula Rate” for the Class A and Mezzanine Certificates is the lesser of (a) the sum of the interbank offered rate for one-month United States dollar deposits in the London market (the “Certificate Index”) as of the related LIBOR Determination Date (as defined herein) plus a related margin (the “Certificate Margin”) and (b) the Maximum Cap Rate.

The Certificate Margin with respect to each of the Class A and Mezzanine Certificates will be the related percentage set forth below.

Class	(1)	(2)
I-A-1	0.140%	0.280%
II-A-1	0.040%	0.080%
II-A-2	0.100%	0.200%
II-A-3	0.140%	0.280%
II-A-4	0.220%	0.440%
M-1	0.230%	0.345%
M-2	0.290%	0.435%
M-3	0.340%	0.510%
M-4	0.400%	0.600%
M-5	0.420%	0.630%
M-6	0.470%	0.705%
M-7	0.850%	1.275%
M-8	1.000%	1.500%
M-9	2.100%	3.150%
M-10	2.500%	3.750%
M-11	2.500%	3.750%

__________

⁽¹⁾For the accrual period for each Distribution Date through and including the Optional Termination Date.

⁽²⁾For each other accrual period.

The “Maximum Cap” will be a per annum rate (subject to adjustment based on the actual number of days elapsed in the related Accrual Period) equal to a fraction, expressed as a percentage, (1) the numerator of which is equal to the product of (I) for each of the first three Distribution Dates, (A) 12 multiplied by (B) the amount of interest which accrued on the Initial Mortgage Loans in the prior calendar month at their Adjusted Net Maximum Mortgage Rates plus the amount withdrawn from an interest coverage account, if any, for such distribution date minus the amount of any Net Swap Payment and Swap Termination Payment (other than any swap termination payment resulting from a swap provider trigger event) made to the Swap Provider plus the amount of any Net Swap Payment and Swap Termination Payment made by the Swap Provider and (II) thereafter, (A) 12 multiplied by (B) the amount of interest which accrued on the Mortgage Loans in the prior calendar month at their Adjusted Net Maximum Mortgage Rates plus the amount withdrawn from an interest coverage account, if any, for such distribution date minus the amount of any Net Swap Payment and Swap Termination Payment (other than any swap termination payment resulting from a swap provider trigger event) made to the Swap Provider plus the amount of any Net Swap Payment and Swap Termination Payment made by the Swap Provider and (2) the denominator of which is equal to the sum of (i) the aggregate principal balance of the Mortgage Loans as of the first day of the month preceding the month in which such Distribution Date occurs and (ii) the amounts on deposit in the Pre-Funding Accounts.

The “Adjusted Net Maximum Mortgage Rate” for any Mortgage Loan for any Distribution Date will be a per annum rate equal to the applicable Maximum Mortgage Rate for such Mortgage Loan (or the Mortgage Rate in the case of any fixed-rate Mortgage Loan) as of the first day of the month preceding the month in which the Distribution Date occurs (or the Cut-off Date with respect to the first Distribution Date) minus the sum of (i) the Trustee Fee Rate, (ii) the Servicing Fee Rate and (iii) the PMI Premium Rate, if applicable.

The “Net WAC Rate” will be a per annum rate (subject to adjustment based on the actual number of days elapsed in the related Accrual Period) equal to a fraction, expressed as a percentage, (1) the numerator of which is equal to the product of (I) for each of the first three Distribution Dates, (A) 12 multiplied by (B) the amount of interest which accrued on the Initial Mortgage Loans in the prior calendar month at their Adjusted Net Mortgage Rates plus the amount withdrawn from an interest coverage account, if any, for such distribution date minus the amount of any Net Swap Payment and Swap Termination Payment (other than any swap termination payment resulting from a swap provider trigger event) made to the Swap Provider and (II) thereafter, (A) 12 multiplied by (B) the amount of interest which accrued on the Mortgage Loans in the prior calendar month at their Adjusted Net Mortgage Rates plus the amount withdrawn from an interest coverage account, if any, for such distribution date minus the amount of any Net Swap Payment and Swap Termination Payment (other than any swap termination payment resulting from a swap provider trigger event) made to the Swap Provider and (2) the denominator of which is equal to the sum of (i) the aggregate principal balance of the Mortgage Loans as of the first day of the month preceding the month in which such Distribution Date occurs and (ii) the amounts on deposit in the Pre-Funding Accounts.

The “Adjusted Net Mortgage Rate” for any Mortgage Loan for any Distribution Date will be a per annum rate equal to the applicable Mortgage Rate for such Mortgage Loan as of the first day of the month preceding the month in which such Distribution Date occurs minus the sum of (i) the Trustee Fee Rate, (ii) the Servicing Fee Rate and (iii) the PMI Premium Rate, if applicable.

The “Net WAC Rate Carryover Amount” for any class of Class A and Mezzanine Certificates and any Distribution Date is an amount equal to the sum of (i) the excess, if any, of (x) the amount of interest such class of Certificates would have accrued for such Distribution Date had the applicable Pass-Through Rate been the related Formula Rate over (y) the amount of interest such class of Certificates accrued for such Distribution Date at the Net WAC Rate and (ii) the unpaid portion of any related Net WAC Rate Carryover Amount from the prior Distribution Date together with interest accrued on such unpaid portion for the most recently ended Accrual Period at the related Formula Rate. Any Net WAC Rate Carryover Amount on the Class A and Mezzanine Certificates will be distributed on such Distribution Date or future Distribution Dates from and to the extent of funds available therefor in accordance with the priorities described above under “—Overcollateralization Provisions” and “—Interest Rate Swap Agreement, the Swap Provider and the Supplemental Interest Trust”.

On the Closing Date, the Trustee will establish an account (the “Net WAC Rate Carryover Reserve Account”) from which distributions in respect of Net WAC Rate Carryover Amounts on the Class A and Mezzanine Certificates will be made. The Net WAC Rate Carryover Reserve Account will be an asset of the Trust but not of any REMIC. On each Distribution Date, to the extent required following the distribution of Available Funds as described under “—Overcollateralization Provisions” above, the Trustee will withdraw from amounts in the Net WAC Rate Carryover Reserve Account to distribute to the Class A and Mezzanine Certificates any Net WAC Rate Carryover Amounts in the following order of priority, in each case to the extent of amounts remaining in the Net WAC Rate Carryover Reserve Account:

(i)concurrently, to each class of Class A Certificates, on a pro rata basis based on the related Net WAC Rate Carryover Amount for each such class; and

(ii)sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 Certificates, in that order, the related Net WAC Rate Carryover Amount.

Interest Coverage Accounts

The Trustee may establish for the benefit of the Certificateholders one or more trust accounts (the “Interest Coverage Accounts”), as required in the Pooling Agreement and on the Closing Date, the Depositor may deliver to the Trustee for deposit in each such account a cash amount as specified in the Pooling Agreement.

Mandatory Principal Distributions on Class A Certificates

The Class A Certificates will receive a principal distribution on the Distribution Date immediately following the end of the Funding Period to the extent of any amounts remaining on deposit in the related Pre-Funding Account on such Distribution Date. Although no assurance can be given, the Depositor anticipates that the aggregate Principal Balance of Subsequent Mortgage Loans sold to the Trust will require the application of substantially all of the Original Pre-Funded Amounts and that there will be no material amount of principal distribution to the holders of the related Class A Certificates from the related Pre-Funding Account. It is unlikely, however, that the Depositor will be able to deliver Subsequent Mortgage Loans with an aggregate Principal Balance identical to the Original Pre-Funded Amounts. Accordingly, a small amount of principal representing the related unused Original Pre-Funded Amount is likely to be distributed on the related Class A Certificates on the Distribution Date immediately following the end of the Funding Period.

Interest Rate Swap Agreement, the Swap Provider and the Supplemental Interest Trust

The Interest Rate Swap Agreement

Wells Fargo Bank, N.A., as the supplemental interest trust trustee (the “Supplemental Interest Trust Trustee”), will enter into an interest rate swap agreement (the “Interest Rate Swap Agreement”) with a swap provider (the “Swap Provider”) for the benefit of the holders of the Class A and Mezzanine Certificates. The Interest Rate Swap Agreement will be held in the supplemental interest trust (the “Supplemental Interest Trust”). The Supplemental Interest Trust Trustee will appoint the Swap Administrator (defined below) pursuant to the Swap Administration Agreement (defined below) to receive and distribute funds in respect of the Interest Rate Swap Agreement on behalf of the Supplemental Interest Trust. For the avoidance of doubt, the Supplemental Interest Trust, the Interest Rate Swap Agreement, the Swap Administration Agreement and the Swap Account will not be assets of any REMIC.

Under the Interest Rate Swap Agreement, on or before each Distribution Date commencing with the Distribution Date in December 2006 and ending with the Distribution Date in August 2012, the Supplemental Interest Trust Trustee (on behalf of the Supplemental Interest Trust) will be obligated to pay to the Swap Provider a fixed amount for that Distribution Date, or the Fixed Swap Payment, equal to the product of (x) the Strike Rate, (y) the product of (i) the Swap Notional Amount (as defined below) for that Distribution Date and (ii) 250 and (z) a fraction, the numerator of which is 30 (or, for the first Distribution Date, the number of days elapsed from and including the effective date (as defined in the Interest Rate Swap Agreement) to but excluding the first Distribution Date, determined on a 30/360 basis) and the denominator of which is 360, and the Swap Provider will be obligated to pay to the Supplemental Interest Trust Trustee (on behalf of the Supplemental Interest Trust) a floating amount for that Distribution Date, or the Floating Swap Payment, equal to the product of (x) One-Month LIBOR as determined pursuant to the Interest Rate Swap Agreement for the related calculation period (as defined in the Interest Rate Swap Agreement), (y) the product of (i) the Swap Notional Amount for that Distribution Date and (ii) 250 and (z) a fraction, the numerator of which is equal to the actual number of days in the related calculation period, and the denominator of which is 360. A net payment, referred to as a Net Swap Payment, will be required to be made on or before each applicable Distribution Date (a) by the Supplemental Interest Trust Trustee to the Swap Provider, if the Fixed Swap Payment for such Distribution Date exceeds the Floating Swap Payment for such Distribution Date, or (b) by the Swap Provider to the Supplemental Interest Trust Trustee, if the Floating Swap Payment exceeds the Fixed Swap Payment for such Distribution Date. For each Distribution Date in respect of which the Supplemental Interest Trust Trustee is required to make a Net Swap Payment to the Swap Provider, the trust will be required to make a payment to the Supplemental Interest Trust Trustee in the same amount prior to distributions to certificateholders.

The Swap Notional Amount for each Distribution Date will equal the lesser of (x) the product of (i) the aggregate certificate principal balance of the outstanding Class A and Mezzanine Certificates immediately prior to such Distribution Date and (ii) 1/250 and (y) the notional amount for such Distribution Date as set forth in Annex III (such lesser amount, the “Swap Notional Amount”).

The Interest Rate Swap Agreement will terminate following the last Distribution Date specified above, unless the Interest Rate Swap Agreement is terminated earlier upon the occurrence of a Swap Event of Default, a Swap Termination Event or a Swap Additional Termination Event, each as defined below.

The respective obligations of the Swap Provider and the Supplemental Interest Trust to pay specified amounts due under the Interest Rate Swap Agreement (other than Swap Termination Payments (as defined below)) will be subject to the following conditions precedent: (1) no Swap Event of Default or event that with the giving of notice or lapse of time or both would become a Swap Event of Default will have occurred and be continuing with respect to the Interest Rate Swap Agreement and (2) no “early termination date” (as defined in the Interest Rate Swap Agreement) has occurred or been effectively designated with respect to the Interest Rate Swap Agreement.

Events of default under the Interest Rate Swap Agreement (each a “Swap Event of Default”) include the following:

·   failure to make a payment due under the Interest Rate Swap Agreement after notice of such failure is received and expiration of a specified grace period,

·   certain insolvency or bankruptcy events, and

·   a merger by the Swap Provider without an assumption of its obligations under the Interest Rate Swap Agreement,

each as further described in the Interest Rate Swap Agreement.

Termination events under the Interest Rate Swap Agreement (each a “Swap Termination Event”) include the following:

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

·   tax event (which generally relates to either party to the Interest Rate Swap Agreement receiving a payment under the Interest Rate Swap Agreement from which an amount has been deducted or withheld for or on account of taxes or paying an additional amount on account of an indemnifiable tax, as defined in the Interest Rate Swap Agreement, in either case as a result of a change in tax law) and

·   tax event upon merger (which generally relates to either party to the Interest Rate Swap Agreement receiving a payment under the Interest Rate Swap Agreement from which an amount has been deducted or withheld for or on account of an indemnifiable tax or paying an additional amount on account of an indemnifiable tax, in either case as a result of a merger or similar transaction),

each as further described in the Interest Rate Swap Agreement.

Additional termination events under the Interest Rate Swap Agreement (each a “Swap Additional Termination Event”), include the following:

·   failure of the Swap Provider to comply with the Swap Downgrade Provisions,

·   failure of the Swap Provider to comply with the Regulation AB provisions of the Interest Rate Swap Agreement,

·   occurrence of an optional termination of the securitization pursuant to the terms of the Pooling Agreement, and

·   amendment of the Pooling Agreement in a manner that may materially adversely affect the Swap Provider without the prior written consent of the Swap Provider,

each as further described in the Interest Rate Swap Agreement.

If the Swap Provider’s credit ratings are withdrawn or reduced below the levels specified in the Interest Rate Swap Agreement, then, unless each Rating Agency has reconfirmed the ratings which were in effect immediately prior to such withdrawal or reduction for all securities the ratings for which are supported by the Interest Rate Swap Agreement, the Swap Provider will be required, at its own expense, either (1) to obtain a substitute swap provider which will assume the obligations of the Swap Provider under the Interest Rate Swap Agreement and which meets all Rating Agency requirements and any third party consent requirements provided therein or in any related documentation, or (2) to establish any other arrangement specified in the Interest Rate Swap Agreement that meets all Rating Agency requirements and any third party consent requirements provided therein or in any related documentation (collectively, the “Swap Downgrade Provisions”).

Upon the occurrence of a Swap Event of Default, the non-defaulting party will have the right to designate an early termination date (an “Early Termination Date”). Upon the occurrence of a Swap Termination Event or a Swap Additional Termination Event, an Early Termination Date may be designated by one of the parties as specified in the Interest Rate Swap Agreement, and will occur only upon notice and, in some circumstances, after any affected party has used reasonable efforts to transfer its rights and obligations under the Interest Rate Swap Agreement to a related entity within a specified period after notice has been given of the Swap Termination Event, all as set forth in the Interest Rate Swap Agreement. The occurrence of an Early Termination Date under the Interest Rate Swap Agreement will constitute a “Swap Early Termination.”

Upon a Swap Early Termination, the Supplemental Interest Trust or the Swap Provider may be liable to make a swap termination payment (the “Swap Termination Payment”) to the other, regardless, if applicable, of which of the parties has caused the termination. The Swap Termination Payment will be based on the value of the Interest Rate Swap Agreement computed in accordance with the procedures set forth in the Interest Rate Swap Agreement.

In the event that the Swap Administrator is required to make a Swap Termination Payment to the Swap Provider, the trust will be required to make a payment to the Swap Administrator in the same amount (to the extent such Swap Termination Payment has not been paid by the Swap Administrator from any upfront payment received pursuant to any replacement interest rate swap agreement that may be entered into by the Supplemental Interest Trust Trustee); in the case of a Swap Termination Payment not triggered by a Swap Provider Trigger Event, the trust will be required to make such payment on the related Distribution Date, and on any subsequent Distribution Dates until paid in full, prior to distributions to certificateholders, and in the case of a Swap Termination Payment triggered by a Swap Provider Trigger Event, the trust’s obligation to make such payment generally will be subordinated to distributions to the holders of the Class A and Mezzanine Certificates to the extent described in the Pooling Agreement.

Upon a Swap Early Termination other than in connection with the optional termination of the trust, the Swap Administrator, pursuant to the Swap Administration Agreement, will use reasonable efforts to replace the Swap Provider as a party under the Interest Rate Swap Agreement, or, if such a replacement is unavailable, to enter a new interest rate swap agreement on substantially similar terms as the Interest Rate Swap Agreement, in either case with a successor swap provider meeting all Rating Agency requirements and any third party consent requirements. If the Swap Administrator receives a Swap Termination Payment from the Swap Provider in connection with such Swap Early Termination, the Swap Administrator will apply such Swap Termination Payment to any upfront payment required to appoint the successor swap provider. If the Swap Administrator is required to pay a Swap Termination Payment to the Swap Provider in connection with such Swap Early Termination, the Swap Administrator will apply any upfront payment received from the successor swap provider to pay such Swap Termination Payment. If the Swap Administrator is unable to appoint a successor swap provider within 30 days of the Swap Early Termination, then the Swap Administrator will deposit any Swap Termination Payment received from the original Swap Provider into a separate, non-interest bearing reserve account and will, on each subsequent Distribution Date, withdraw from the amount then remaining on deposit in such reserve account an amount equal to the Net Swap Payment, if any, that would have been paid to the Swap Administrator by the original Swap Provider calculated in accordance with the terms of the original Interest Rate Swap Agreement, and distribute such amount in accordance with the terms of the Pooling Agreement and the Swap Administration Agreement.

Upon a Swap Early Termination in connection with the optional termination of the trust, if the Swap Administrator is required to make a Swap Termination Payment to the Swap Provider, the party exercising such optional termination of the trust will be required to include in its payment an amount equal to such Swap Termination Payment, as described in this prospectus supplement. If the Swap Administrator receives a Swap Termination Payment from the Swap Provider in connection with such Swap Early Termination, such Swap Termination Payment will be distributed in accordance with the terms of the Pooling Agreement and the Swap Administration Agreement.

A “Swap Provider Trigger Event” will mean: (i) a Swap Event of Default under the Interest Rate Swap Agreement with respect to which the Swap Provider is a Defaulting Party (as defined in the Interest Rate Swap Agreement), (ii) a Swap Termination Event under the Interest Rate Swap Agreement with respect to which the Swap Provider is the sole Affected Party (as defined in the Interest Rate Swap Agreement) or (iii) a Swap Additional Termination Event under the Interest Rate Swap Agreement with respect to which the Swap Provider is the sole Affected Party.

The Swap Provider

Bear Stearns Financial Products Inc. (“BSFP”) is the swap provider. 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. As of the date hereof, BSFP has a ratings classification of “AAA” from Standard & Poor’s and “Aaa” from Moody’s Investors Service.

BSFP has not participated in the preparation of this prospectus supplement and has not reviewed and is not responsible for any information contained herein, other than the information contained in the immediately preceding paragraph.

The “significance percentage” of the Interest Rate Swap Agreement as calculated in accordance with Item 1115 of Regulation AB under the Securities Act of 1933, as amended, is less than 10%. As provided in the Interest Rate Swap Agreement, the Swap Provider may be replaced in certain circumstances, including if the significance percentage of the Interest Rate Swap Agreement is 10% or more.

The Swap Administration Agreement and Swap Account

The Interest Rate Swap Agreement will be administered by Wells Fargo Bank, N.A. as Swap Administrator pursuant to a swap administration agreement (the “Swap Administration Agreement”). Any Net Swap Payments made by the Swap Provider to the Supplemental Interest Trust will be distributed in accordance with the Swap Administration Agreement. Beginning on the Distribution Date in December 2006 and on or prior to the Distribution Date in August 2012, the trustee of the Supplemental Interest Trust will be required to deposit into the Swap Account an amount equal to any remaining Unpaid Interest Shortfall Amounts, Net WAC Rate Carryover Amounts, Allocated Realized Loss Amounts and amounts necessary to maintain the Overcollateralization Target Amount on the Class A and Mezzanine Certificates, up to the Net Swap Payment received by the Supplemental Interest Trust from the Swap Provider. Any excess amounts received by the Supplemental Interest Trust will be paid to Option One Mortgage Corporation or its designee.

On or before each Distribution Date, Net Swap Payments (whether payable to the Swap Provider or to the Supplemental Interest Trust Trustee), any Swap Termination Payment owed to the Swap Provider not resulting from a Swap Provider Trigger Event pursuant to the Swap Agreement and any Swap Termination Payments owed to the Supplemental Interest Trust Trustee will be deposited by the Supplemental Interest Trust Trustee into the Swap Account. On each Distribution Date, the Swap Administrator will withdraw from amounts on deposit in the Swap Account (other than amounts representing Swap Termination Payments received by the Supplemental Interest Trust Trustee) prior to any distribution to any Certificates, the following amounts :

(i)first, to the Swap Provider, any Net Swap Payment owed to the Swap Provider pursuant to the Swap Agreement for such Distribution Date; and

(ii)second, to the Swap Provider, any Swap Termination Payment owed to the Swap Provider not due to a Swap Provider Trigger Event pursuant to the Swap Agreement.

On each Distribution Date, to the extent required, following the distribution of the Net Monthly Excess Cashflow as described in “—Overcollateralization Provisions” in this prospectus supplement and withdrawals from the Net WAC Rate Carryover Reserve Account as described in “—Net WAC Rate Carryover Amounts”, amounts will be withdrawn from the Swap Account by the Swap Administrator and distributed to the Class A and Mezzanine Certificates in the following order of priority:

(i)first, concurrently, to each class of Class A Certificates, the related Monthly Interest Distributable Amount and Unpaid Interest Shortfall Amount remaining undistributed after the distributions of the Group I Interest Remittance Amount and the Group II Interest Remittance Amount, on a pro rata basis based on such respective remaining Monthly Interest Distributable Amount,

(ii)second, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 Certificates, in that order, the related Monthly Interest Distributable Amount and Unpaid Interest Shortfall Amount, to the extent remaining undistributed after the distributions of the Group I Interest Remittance Amount, the Group II Interest Remittance Amount and the Net Monthly Excess Cashflow;

(iii)third, to the holders of the class or classes of Certificates then entitled to receive distributions in respect of principal, in an amount necessary to maintain the Overcollateralization Target Amount after taking into account distributions made pursuant to clause first under “—Overcollateralization Provisions;”

(iv)fourth, sequentially to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 Certificates, in that order, in each case up to the related Allocated Realized Loss Amount related to such Certificates for such Distribution Date remaining undistributed after distribution of the Net Monthly Excess Cashflow;

(v)fifth, concurrently, to each class of Class A Certificates, the related Net WAC Rate Carryover Amount, to the extent remaining undistributed after distributions are made from the Net WAC Rate Carryover Reserve Account, on a pro rata basis based on such respective Net WAC Rate Carryover Amounts remaining; and

(vi)sixth, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 Certificates, in that order, the related Net WAC Rate Carryover Amount, to the extent remaining undistributed after distributions are made from the Net WAC Rate Carryover Reserve Account.

Notwithstanding any of the foregoing, the aggregate amount distributed under clause third and fourth above on such Distribution Date, when added to the cumulative amount distributed under clause third and fourth above on all prior Distribution Dates, will not be permitted to exceed the cumulative amount of Realized Losses incurred on the Mortgage Loans since the Cut-off Date through the last day of the Prepayment Period (reduced by the aggregate amount of Subsequent Recoveries received since the Cut-off date through the last day of the Prepayment Period). Any amounts that would otherwise be distributable from the Supplemental Interest Trust on any Distribution Date under clause third and fourth above, but for the foregoing proviso, will be retained in the Supplemental Interest Trust and will be included in amounts available for distribution from the Supplemental Interest Trust on the next succeeding Distribution Date, subject to the foregoing proviso in the case of amounts to be distributed under clause third and fourth above.

Calculation of One-Month LIBOR

On the second LIBOR Business Day (as defined below) preceding the commencement of each Accrual Period for the Class A and Mezzanine Certificates (each such date, a “LIBOR Determination Date”), the Trustee will determine the Certificate Index for such Accrual Period for the Class A and Mezzanine Certificates on the basis of the London interbank offered rate for one-month United States dollar deposits, as such rates appear on the Telerate Page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination Date. If such rate does not appear on Telerate Page 3750, the rate for that day will be determined on the basis of the offered rates of the Reference Banks (as defined herein) for one-month United States dollar deposits, as of 11:00 a.m. (London time) on such LIBOR Determination Date. The Trustee will request the principal London office of each of the Reference Banks to provide a quotation of its rate. If on such LIBOR Determination Date two or more Reference Banks provide such offered quotations, the Certificate Index for the related Accrual Period will be the arithmetic mean of such offered quotations (rounded upwards if necessary to the nearest whole multiple of 0.0625%). If on such LIBOR Determination Date fewer than two Reference Banks provide such offered quotations, the Certificate Index for the related Accrual Period will be the higher of (x) the Certificate Index as determined on the previous LIBOR Determination Date and (y) the Reserve Interest Rate (as defined herein).

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; “Telerate Page 3750” means the display page currently so designated on the Dow Jones Telerate Capital Markets Report (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices); “Reference Banks” means leading banks selected by the Trustee and engaged in transactions in Eurodollar deposits in the international Eurocurrency market (i) with an established place of business in London, (ii) which have been designated as such by the Trustee and (iii) not controlling, controlled by or under common control with, the Depositor, the Servicer or any successor Servicer or the Originator; and “Reserve Interest Rate” will be the rate per annum that the Trustee determines to be either (i) the arithmetic mean (rounded upwards if necessary to the nearest whole multiple of 0.0625%) of the one-month United States dollar lending rates which New York City banks selected by the Trustee are quoting on the relevant LIBOR Determination Date to the principal London offices of leading banks in the London interbank market or (ii) in the event that the Trustee can determine no such arithmetic mean, the lowest one-month United States dollar lending rate which New York City banks selected by the Trustee are quoting on such LIBOR Determination Date to leading European banks.

The establishment of the Certificate Index on each LIBOR Determination Date by the Trustee and the Trustee’s calculation of the rate of interest applicable to the Class A and Mezzanine Certificates for the related Accrual Period will (in the absence of manifest error) be final and binding.

Reports to Certificateholders

On each Distribution Date, the Trustee will provide and make available to each holder of a Certificate, the NIMS Insurer, if any, and the Rating Agencies a statement (based on information received from the Servicer) setting forth, among other things:

(i)the amount of the distribution made on such Distribution Date to the holders of the certificates allocable to principal and the amount of the distribution made to the holders of the Class P Certificates allocable to Prepayment Charges;

(ii)the amount of the distribution made on such Distribution Date to the holders of the certificates allocable to interest;

(iii)the Net Monthly Excess Cashflow, the Overcollateralized Amount, the Overcollateralization Release Amount, the Overcollateralization Deficiency Amount and the Overcollateralization Target Amount as of such Distribution Date and the Excess Overcollateralized Amount for the Mortgage Pool for such Distribution Date;

(iv)the fees and expenses of the trust accrued and paid on such Distribution Date and to whom such fees and expenses were paid;

(v)the aggregate amount of Advances for the related Due Period (including the general purpose of such Advances);

(vi)the aggregate amount of interest and scheduled principal received or advanced by the Servicer with respect to the related Due Period;

(vii)with respect to each Loan Group, the related group balance at the close of business at the end of the related Due Period;

(viii)the number, aggregate principal balance, weighted average remaining term to maturity and weighted average Mortgage Rate of the Mortgage Loans as of the related Determination Date;

(ix)the number and aggregate unpaid Principal Balance of Mortgage Loans delinquent (a) 30 to 59 days, (b) 60 to 89 days and (c) 90 or more days;

(x)the delinquency percentage;

(xi)the total number and cumulative principal balance of all liquidated Mortgage Loans as of the close of business of the last day of the preceding Prepayment Period, prior to the reduction of each principal balance to zero;

(xii)the total number and cumulative principal balance of all REO Properties as of the close of business of the last day of the preceding Prepayment Period;

(xiii)the aggregate amount of Principal Prepayments in full, the aggregate amount of Principal Prepayments in part and net liquidation proceeds made during the related Prepayment Period;

(xiv)the aggregate amount of Realized Losses incurred during the related Prepayment Period and the cumulative amount of Realized Losses;

(xv)the aggregate amount of extraordinary Trust Fund expenses withdrawn from the Collection Account for such Distribution Date;

(xvi)the Certificate Principal Balance of each class of Certificates, before and after giving effect to the distributions made on such Distribution Date;

(xvii)the Monthly Interest Distributable Amount in respect of each class of Certificates for such Distribution Date and the Unpaid Interest Shortfall Amount, if any, with respect to the Class A Certificates and the Mezzanine Certificates for such Distribution Date;

(xviii)the aggregate amount of any Prepayment Interest Shortfalls for such Distribution Date, to the extent not covered by payments by the Servicer under the Pooling Agreement;

(xix)the Senior Credit Enhancement Percentage for such Distribution Date;

(xx)the Net WAC Rate Carryover Amount for each class of Class A Certificates and each class of Mezzanine Certificates, if any, for such Distribution Date and the amount remaining unpaid after reimbursements therefor on such Distribution Date;

(xxi)the amount of any Net Swap Payments or Swap Termination Payments (a) due from the Trust and (b) due from the Swap Provider;

(xxii)whether the Stepdown Date or a Trigger Event is in effect;

(xxiii)the respective Pass-Through Rates applicable to each class of Class A Certificates, each Class of Mezzanine Certificates and the Class C Certificates for such Distribution Date and the Pass-Through Rate applicable to each class of Class A Certificates and each class of Mezzanine Certificates for the immediately succeeding Distribution Date;

(xxiv)the total cashflows received and the general sources thereof;

(xxv)if applicable, material modifications, extensions or waivers to Mortgage Loan terms, fees, penalties or payments during the preceding calendar month or that have become material over time;

(xxvi)the applicable Record Dates, Accrual Periods and Determination Dates for calculating distributions for such Distribution Date; and

(xxvii)the amount of payments received related to claims under the PMI Policy during the related Prepayment Period (and the number of Mortgage Loans to which such payments related) and (B) the cumulative amount of payments received related to claims under the PMI Policy since the Closing Date (and the number of Mortgage Loans to which such payments related);

(xxviii)the dollar amount of claims made under the PMI Policy that were denied during the Prepayment Period (and the number of Mortgage Loans to which such denials related) and (B) the dollar amount of the cumulative claims made under the PMI Policy that were denied since the Closing Date (and the number of Mortgage Loans to which such denials related);

(xxix)the amount on deposit in the Net WAC Rate Carryover Reserve Account.

In addition, the Trustee will report on Form 10-D any material breaches of representations and warranties regarding the Mortgage Loans to the extent known to the Trustee.

The Trustee will make such information (and, at its option, any additional files containing the same information in an alternative format) available each month to Certificateholders, the NIMS Insurer and the Rating Agencies via the Trustee’s internet website. Parties that are unable to use the above distribution options are entitled to have a paper copy mailed to them via first class mail by calling the customer service desk and indicating such. The Trustee will have the right to change the way statements are distributed in order to make such distribution more convenient and/or more accessible to the above parties and the Trustee will provide timely and adequate notification to all above parties regarding any such changes.

The primary source of information available to investors concerning the Class A Certificates and Mezzanine Certificates will be the monthly reports made available via the trustee’s internet website, which will include information as to the outstanding Certificate Principal Balance of the Class A Certificates and Mezzanine Certificates and the status of the applicable form of credit enhancement. Also, investors may read any Form 10-D, Form 10-K or Form 8-K at the SEC’s Public Reference Room at 100 F Street, N.W., Washington, D.C. 20549. Investors may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also makes any such materials filed electronically available at the following website: http://www.sec.gov.

Any Form 10-D, Form 10-K or Form 8-K will be filed on behalf of the Issuing Entity will be signed by the Depositor.

The Trust’s Annual Reports on Form 10-K, Distribution Reports on Form 10-D and Current Reports on Form 8-K, and any amendments to those reports, which have been prepared and filed by the Trustee, will be made available on the Trustee’s internet website as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission.

In addition, within a reasonable period of time after the end of each calendar year, the Trustee will prepare and deliver to each holder of a Certificate of record during the previous calendar year and the NIMS Insurer, if any, a statement containing information necessary to enable Certificateholders to prepare their tax returns. Such statements will not have been examined and reported upon by an independent public accountant.

YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS

The yields to maturity of the Class A and Mezzanine Certificates will be sensitive to defaults on the Mortgage Loans. If a purchaser of a Class A or Mezzanine Certificate calculates its anticipated yield based on an assumed rate of default and amount of losses that is lower than the default rate and amount of losses actually incurred, its actual yield to maturity may be lower than that so calculated. In general, the earlier a loss occurs, the greater is the effect on an investor’s yield to maturity. There can be no assurance as to the delinquency, foreclosure or loss experience with respect to the Mortgage Loans. Because the Mortgage Loans in the Trust were originated in accordance with the Option One Underwriting Guidelines described herein without regard to whether such Mortgage Loans would be acceptable for purchase by Fannie Mae or Freddie Mac, delinquencies and liquidation proceedings are more likely with these Mortgage Loans than with mortgage loans that are originated in a more traditional manner.

The rate of principal payments, the aggregate amount of distributions and the yields to maturity of the Class A and Mezzanine Certificates will be affected by the rate and timing of payments of principal on the Mortgage Loans. Furthermore, since mortgage loans secured by second liens are not generally viewed by mortgagors as permanent financing and generally carry a high rate of interest, certain of the Mortgage Loans may experience a higher rate of prepayment than traditional mortgage loans. The rate of principal payments on the Mortgage Loans will in turn be affected by the amortization schedules of the Mortgage Loans and by the rate of principal prepayments (including for this purpose prepayments resulting from refinancing, liquidations of the Mortgage Loans due to defaults, casualties or condemnations and repurchases by the Sponsor or Servicer). Because certain of the Mortgage Loans contain prepayment charges, the rate of principal payments may be less than the rate of principal payments for mortgage loans that did not have prepayment charges. The Mortgage Loans are subject to the “due-on-sale” provisions included therein and each adjustable-rate mortgage loan provides that the Mortgage Loan is assumable by a creditworthy purchaser of the related Mortgaged Property. See “The Mortgage Pool” herein.

Prepayments, liquidations and purchases of the Mortgage Loans (including any optional purchase) will result in distributions on the Class A and Mezzanine Certificates of principal amounts which would otherwise be distributed over the remaining terms of the Mortgage Loans. Since the rate of payment of principal on the Mortgage Loans will depend on future events and a variety of other factors, no assurance can be given as to such rate or the rate of principal prepayments. The extent to which the yield to maturity of a class of the Class A and Mezzanine Certificates may vary from the anticipated yield will depend, in the case of the Class A and Mezzanine Certificates, upon the degree to which such class of Certificates is purchased at a discount or premium and in the case of the Class A and Mezzanine Certificates, upon the degree to which the amount or timing of payments thereon is sensitive to prepayments, liquidations and purchases of the Mortgage Loans. Further, an investor should consider the risk that, in the case of any Class A or Mezzanine Certificates purchased at a discount, a slower than anticipated rate of principal payments (including prepayments) on the Mortgage Loans could result in an actual yield to such investor that is lower than the anticipated yield and, in the case of any Class A or Mezzanine Certificates purchased at a premium, a faster than anticipated rate of principal payments on the Mortgage Loans could result in an actual yield to such investor that is lower than the anticipated yield.

The rate of principal payments (including prepayments) on pools of mortgage loans may vary significantly over time and may be influenced by a variety of economic, geographic, social and other factors, including changes in mortgagors’ housing needs, job transfers, unemployment, mortgagors’ net equity in the mortgaged properties and servicing decisions. In general, if prevailing interest rates were to fall significantly below the Mortgage Rates on the Mortgage Loans, such Mortgage Loans could be subject to higher prepayment rates than if prevailing interest rates were to remain at or above the Mortgage Rates on such Mortgage Loans. Conversely, if prevailing interest rates were to rise significantly, the rate of prepayments on such Mortgage Loans would generally be expected to decrease. The Mortgage Loans may be subject to a greater rate of principal prepayments in a low interest rate environment. For example, if prevailing interest rates were to fall, mortgagors with adjustable-rate Mortgage Loans may be inclined to refinance their adjustable-rate Mortgage Loans with a fixed-rate loan to “lock in” a lower interest rate or to refinance their adjustable-rate Mortgage Loans with other more competitive adjustable-rate mortgage loans. The existence of the applicable Periodic Rate Cap and Maximum Rate with respect to the adjustable-rate Mortgage Loans also may affect the likelihood of prepayments resulting from refinancings. No assurances can be given as to the rate of prepayments on the Mortgage Loans in stable or changing interest rate environments. In addition, the delinquency and loss experience of the fixed-rate Mortgage Loans may differ from that on the adjustable-rate Mortgage Loans because the amount of the monthly payments on the adjustable-rate Mortgage Loans are subject to adjustment on each Adjustment Date. In addition, the adjustable-rate Mortgage Loans generally will not have their initial Adjustment Date for two, three, five or fifteen years after the origination thereof. The adjustable-rate Mortgage Loans may be subject to greater rates of prepayments as they approach their initial Adjustment Dates even if market interest rates are only slightly higher or lower than the Mortgage Rates on the adjustable-rate Mortgage Loans as mortgagors seek to avoid changes in their monthly payments.

The interest-only feature of the Interest Only Mortgage Loans may reduce the perceived benefits of refinancing to take advantage of lower market interest rates or to avoid adjustments in the Mortgage Rates. However, as a Mortgage Loan with such a feature nears the end of its interest-only period, the borrower may be more likely to refinance the Mortgage Loan, even if market interest rates are only slightly less than the Mortgage Rate in order to avoid the increase in the monthly payments to amortize the Mortgage Loan over its remaining life.

Except in the circumstances described in this prospectus supplement, principal distributions on the Group I Certificates relate to principal payments on the Group I Mortgage Loans and principal distributions on the Group II Certificates relate to principal payments on the Group II Mortgage Loans.

Approximately 70.02% of the Initial Group I Mortgage Loans and approximately 74.05% of the Initial Group II Mortgage Loans (in each case, by aggregate principal balance of the related Loan Group as of the Cut-off Date) provide for payment by the mortgagor of a prepayment charge in limited circumstances on certain prepayments. The holders of the Class P Certificates will be entitled to all prepayment charges received on the Mortgage Loans, and such amounts will not be available for distribution on the other classes of Certificates. Under certain circumstances, as described in the Pooling Agreement, the Servicer may waive the payment of any otherwise applicable prepayment charge. Investors should conduct their own analysis of the effect, if any, that the prepayment charges, and decisions by the Servicer with respect to the waiver thereof, may have on the prepayment performance of the Mortgage Loans. The Depositor makes no representations as to the effect that the prepayment charges, and decisions by the Servicer with respect to the waiver thereof, may have on the prepayment performance of the Mortgage Loans.

To the extent the Net WAC Rate is the Pass-Through Rate for any class of Class A and Mezzanine Certificates, a shortfall in interest equal to the Net WAC Rate Carryover Amount will occur. Such shortfall will only be distributable from (i) the Net Monthly Excess Cashflow, but only to the extent that the Overcollateralization Target Amount has been maintained or restored and certain other required distributions from the Net Monthly Excess cashflow have been made and (ii) payments received under the Interest Rate Swap Agreement.

Weighted Average Lives

The timing of changes in the rate of principal prepayments on the Mortgage Loans may significantly affect an investor’s actual yield to maturity, even if the average rate of principal prepayments is consistent with such investor’s expectation. In general, the earlier a principal prepayment on the Mortgage Loans occurs, the greater the effect of such principal prepayment on an investor’s yield to maturity. The effect on an investor’s yield of principal prepayments occurring at a rate higher (or lower) than the rate anticipated by the investor during the period immediately following the issuance of the Class A and Mezzanine Certificates may not be offset by a subsequent like decrease (or increase) in the rate of principal prepayments.

The weighted average life of a Class A or Mezzanine Certificate is the average amount of time that will elapse from the Closing Date, until each dollar of principal is repaid to the investors in such Certificate. Because it is expected that there will be prepayments and defaults on the Mortgage Loans, the actual weighted average lives of these Certificates are expected to vary substantially from the weighted average remaining terms to stated maturity of the Mortgage Loans as set forth herein under “The Mortgage Pool.”

The Assumed Final Distribution Date for the Class A and Mezzanine Certificates is as set forth herein under “Description of the Certificates—General” and was determined by taking the latest maturity date of the Mortgage Loans and adding one month. The weighted average lives of the Class A and Mezzanine Certificates are likely to be shorter than would be the case if payments actually made on the Mortgage Loans conformed to the assumptions that were used to determine the Assumed Final Distribution Date, and the final Distribution Date with respect to any class of the Class A and Mezzanine Certificates could occur significantly earlier than the Assumed Final Distribution Date because (i) prepayments are likely to occur, (ii) excess cashflow, if any, will be applied as principal of such Certificates as described herein and (iii) the Servicer or the NIMS Insurer, if any, may cause a termination of the Trust as provided herein.

Prepayments of mortgage loans are commonly measured relative to a prepayment standard or model. The model used in this prospectus supplement (the “Prepayment Assumption”) assumes a prepayment rate for the Fixed-Rate Mortgage Loans of 115% of the Fixed-Rate Prepayment Vector and a prepayment rate for the Adjustable-Rate Mortgage Loans of 100% of the Adjustable-Rate Prepayment Vector. The “Fixed-Rate Prepayment Vector” assumes a constant prepayment rate (“CPR”) of 4.00% per annum of the then unpaid principal balance of such mortgage loans in the first month of the life of such mortgage loans and an additional approximately 1.4545% (precisely 16%/11) per annum in each month thereafter until the 12^th month. Beginning in the 12^th month and in each month thereafter during the life of such mortgage loans, such prepayment vector assumes a CPR of 20.00%. The “Adjustable-Rate Prepayment Vector” assumes (a) a CPR of 2.00% per annum of the then unpaid principal balance of such Mortgage Loans in the first month of the life of such Mortgage Loans and an additional 2.5454% (precisely 28%/11) per annum in each month thereafter until the 12^th month, and then beginning in the 12th month and in each month thereafter until the 23^rd month, a CPR of 30.00% per annum, (b) beginning in the 24^th month and in each month thereafter until the 27^th month, a CPR of 60.00% per annum and (c) beginning in the 28^th month and in each month thereafter during the life of such Mortgage Loans, a CPR of 35.00% per annum. However, the prepayment rate will not exceed 90% CPR per annum in any period for any percentage of the Adjustable-Rate Vector.

CPR is a prepayment assumption that represents a constant assumed rate of prepayment each month relative to the then outstanding principal balance of a pool of mortgage loans for the life of such mortgage loans. The model does not purport to be either an historical description of the prepayment experience of any pool of mortgage loans or a prediction of the anticipated rate of prepayment of any mortgage loans, including the Mortgage Loans to be included in the Trust.

Each of the Prepayment Scenarios in the table below assumes the respective percentages of the related Prepayment Vector described thereunder.

The tables entitled “Percent of Original Certificate Principal Balance Outstanding” were prepared on the basis of the assumptions in the following paragraph and the table set forth below. There are certain differences between the mortgage loan characteristics included in such assumptions and the characteristics of the actual Mortgage Loans. Any such discrepancy may have an effect upon the percentages of Original Certificate Principal Balances outstanding and weighted average lives of the Offered Certificates set forth in those tables. In addition, since the actual Mortgage Loans in the Trust will have characteristics that differ from those assumed in preparing the tables set forth below, the distributions of principal of the Offered Certificates may be made earlier or later than indicated in the table.

The percentages and weighted average lives in the tables entitled “Percent of Original Certificate Principal Balance Outstanding” were determined assuming that (the “Structuring Assumptions”): (i) the Mortgage Loans have the characteristics set forth in Annex II to this prospectus supplement, (ii) the closing date for the Class A and Mezzanine Certificates occurs on October 27, 2006 and the Class A and Mezzanine Certificates are sold to investors on such date, (iii) distributions on the Class A and Mezzanine Certificates are made on the 25^th day of each month regardless of the day on which the Distribution Date actually occurs, commencing in November 2006, in accordance with the allocation of Available Funds set forth above under “Description of the Certificates—Allocation of Available Funds,” (iv) the prepayment rates are the percentages of the related Prepayment Vectors set forth in the “Prepayment Scenarios” table below, (v) prepayments include thirty days’ interest thereon, (vi) the Sponsor is not required to substitute or repurchase any or all of the Mortgage Loans pursuant to the Pooling Agreement and no optional termination is exercised, except with respect to the entries identified by the row captioned “Weighted Average Life (years) to Optional Termination” in the tables below, (vii) the Overcollateralization Target Amount is as set forth herein, (viii) scheduled payments for all Mortgage Loans are received on the first day of each month commencing in November 2006, the principal portion of such payments being computed prior to giving effect to prepayments received in the previous month and there are no losses or delinquencies with respect to such Mortgage Loans, (ix) all related Mortgage Loans prepay at the same rate and all such payments are treated as prepayments in full of individual Mortgage Loans, with no shortfalls in collection of interest, (x) such prepayments are received on the last day of each month commencing in October 2006, (xi) the Certificate Index is at all times equal to 5.3200%, (xii) the Pass-Through Rates for the Class A and Mezzanine Certificates are as set forth herein, (xiii) 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 (a) the assumed level of the Index and (b) the respective Gross Margin (such sum being subject to the applicable Periodic Rate Caps, Minimum Mortgage Rates and Maximum Mortgage Rates), (xiv) with respect to the adjustable-rate Mortgage Loans, Six-Month LIBOR is equal to 5.3640%, (xv) the Servicing Fee Rate is equal 0.30% per annum for the first 10 Due Periods, 0.40% per annum for the 11^th through 30^th Due Periods, 0.65% per annum for all Due Periods thereafter, the Trustee Fee Rate is equal to 0.0030% per annum and the PMI Premium Rate with respect to all of the Mortgage Loans is 0.1372% per annum, (xvi) the Fixed Swap Payment is calculated as described under “Description of the Certificates-Interest Rate Swap Agreement, the Swap Provider and the Supplemental Interest Trust” and no Swap Termination Payment is made and (xvii) no scheduled payments of principal or interest are received for the Additional Mortgage Loans for the first Distribution Date and no scheduled payments of principal or interest are received for the Subsequent Mortgage Loans for the first and second Distribution Dates. Nothing contained in the foregoing assumptions should be construed as a representation that the Mortgage Loans will not experience delinquencies or losses.

Prepayment Scenarios⁽¹⁾

	Scenario I			Scenario II			Scenario III			Scenario IV			Scenario V
Fixed-Rate Mortgage Loans:		85	%		100	%		115	%		125	%		145	%
Adjustable-Rate Mortgage Loans:		70	%		85	%		100	%		120	%		140	%

_________________

⁽¹⁾Percentage of the Fixed-Rate Prepayment Vector or the Adjustable-Rate Prepayment Vector, as applicable.

Percent of Original Certificate Principal Balance Outstanding⁽¹⁾

	Class I-A-1 Prepayment Scenario
Distribution Date	Scenario I			Scenario II			Scenario III			Scenario IV			Scenario V
Initial Percentage		100	%		100	%		100	%		100	%		100	%
October 25, 2007		84			81			77			73			68
October 25, 2008		56			47			39			29			18
October 25, 2009		32			21			12			*			0
October 25, 2010		25			19			12			*			0
October 25, 2011		19			14			9			*			0
October 25, 2012		14			10			6			*			0
October 25, 2013		11			7			4			*			0
October 25, 2014		8			5			3			*			0
October 25, 2015		6			3			2			*			0
October 25, 2016		5			2			1			*			0
October 25, 2017		3			2			1			0			0
October 25, 2018		3			1			*			0			0
October 25, 2019		2			1			0			0			0
October 25, 2020		1			*			0			0			0
October 25, 2021		1			*			0			0			0
October 25, 2022		1			0			0			0			0
October 25, 2023		*			0			0			0			0
October 25, 2024		*			0			0			0			0
October 25, 2025		0			0			0			0			0
October 25, 2026		0			0			0			0			0
October 25, 2027		0			0			0			0			0
October 25, 2028		0			0			0			0			0
October 25, 2029		0			0			0			0			0
October 25, 2030		0			0			0			0			0
October 25, 2031		0			0			0			0			0
October 25, 2032		0			0			0			0			0
October 25, 2033		0			0			0			0			0
October 25, 2034		0			0			0			0			0
October 25, 2035		0			0			0			0			0
October 25, 2036		0			0			0			0			0
Weighted Average Life (years) to Maturity(2)		3.27			2.68			2.21			1.60			1.40
Weighted Average Life (years) to Optional Termination(2)(3)		3.05			2.51			2.07			1.58			1.40

___________________

⁽¹⁾  Rounded to the nearest whole percentage.

⁽²⁾  The weighted average life of any class of Certificates is determined by (i) multiplying the assumed net reduction, if any, in the principal amount on each Distribution Date on such class of Certificates by the number of years from the date of issuance of the Certificates to the related Distribution Date, (ii) summing the results, and (iii) dividing the sum by the aggregate amount of the assumed net reductions in principal amount on such class of Certificates.

⁽³⁾  Assumes an optional purchase of the Mortgage Loans on the earliest Distribution Date on which it is permitted.

*   If applicable, indicates a number that is greater than zero but less than 0.5%.

Percent of Original Certificate Principal Balance Outstanding⁽¹⁾

	Class II-A-1 Prepayment Scenario
Distribution Date	Scenario I			Scenario II			Scenario III			Scenario IV			Scenario V
Initial Percentage		100	%		100	%		100	%		100	%		100	%
October 25, 2007		64			57			49			39			29
October 25, 2008		2			0			0			0			0
October 25, 2009		0			0			0			0			0
October 25, 2010		0			0			0			0			0
October 25, 2011		0			0			0			0			0
October 25, 2012		0			0			0			0			0
October 25, 2013		0			0			0			0			0
October 25, 2014		0			0			0			0			0
October 25, 2015		0			0			0			0			0
October 25, 2016		0			0			0			0			0
October 25, 2017		0			0			0			0			0
October 25, 2018		0			0			0			0			0
October 25, 2019		0			0			0			0			0
October 25, 2020		0			0			0			0			0
October 25, 2021		0			0			0			0			0
October 25, 2022		0			0			0			0			0
October 25, 2023		0			0			0			0			0
October 25, 2024		0			0			0			0			0
October 25, 2025		0			0			0			0			0
October 25, 2026		0			0			0			0			0
October 25, 2027		0			0			0			0			0
October 25, 2028		0			0			0			0			0
October 25, 2029		0			0			0			0			0
October 25, 2030		0			0			0			0			0
October 25, 2031		0			0			0			0			0
October 25, 2032		0			0			0			0			0
October 25, 2033		0			0			0			0			0
October 25, 2034		0			0			0			0			0
October 25, 2035		0			0			0			0			0
October 25, 2036		0			0			0			0			0
Weighted Average Life (years) to Maturity(2)		1.26			1.11			1.00			0.89			0.81
Weighted Average Life (years) to Optional Termination(2)(3)		1.26			1.11			1.00			0.89			0.81

___________________

⁽¹⁾  Rounded to the nearest whole percentage.

⁽²⁾  The weighted average life of any class of Certificates is determined by (i) multiplying the assumed net reduction, if any, in the principal amount on each Distribution Date on such class of Certificates by the number of years from the date of issuance of the Certificates to the related Distribution Date, (ii) summing the results, and (iii) dividing the sum by the aggregate amount of the assumed net reductions in principal amount on such class of Certificates.

⁽³⁾  Assumes an optional purchase of the Mortgage Loans on the earliest Distribution Date on which it is permitted.

*   If applicable, indicates a number that is greater than zero but less than 0.5%.

Percent of Original Certificate Principal Balance Outstanding⁽¹⁾

	Class II-A-2 Prepayment Scenario
Distribution Date	Scenario I			Scenario II			Scenario III			Scenario IV			Scenario V
Initial Percentage		100	%		100	%		100	%		100	%		100	%
October 25, 2007		100			100			100			100			100
October 25, 2008		100			72			42			3			0
October 25, 2009		15			0			0			0			0
October 25, 2010		0			0			0			0			0
October 25, 2011		0			0			0			0			0
October 25, 2012		0			0			0			0			0
October 25, 2013		0			0			0			0			0
October 25, 2014		0			0			0			0			0
October 25, 2015		0			0			0			0			0
October 25, 2016		0			0			0			0			0
October 25, 2017		0			0			0			0			0
October 25, 2018		0			0			0			0			0
October 25, 2019		0			0			0			0			0
October 25, 2020		0			0			0			0			0
October 25, 2021		0			0			0			0			0
October 25, 2022		0			0			0			0			0
October 25, 2023		0			0			0			0			0
October 25, 2024		0			0			0			0			0
October 25, 2025		0			0			0			0			0
October 25, 2026		0			0			0			0			0
October 25, 2027		0			0			0			0			0
October 25, 2028		0			0			0			0			0
October 25, 2029		0			0			0			0			0
October 25, 2030		0			0			0			0			0
October 25, 2031		0			0			0			0			0
October 25, 2032		0			0			0			0			0
October 25, 2033		0			0			0			0			0
October 25, 2034		0			0			0			0			0
October 25, 2035		0			0			0			0			0
October 25, 2036		0			0			0			0			0
Weighted Average Life (years) to Maturity(2)		2.62			2.22			2.00			1.79			1.61
Weighted Average Life (years) to Optional Termination(2)(3)		2.62			2.22			2.00			1.79			1.61

___________________

⁽¹⁾  Rounded to the nearest whole percentage.

⁽²⁾  The weighted average life of any class of Certificates is determined by (i) multiplying the assumed net reduction, if any, in the principal amount on each Distribution Date on such class of Certificates by the number of years from the date of issuance of the Certificates to the related Distribution Date, (ii) summing the results, and (iii) dividing the sum by the aggregate amount of the assumed net reductions in principal amount on such class of Certificates.

⁽³⁾  Assumes an optional purchase of the Mortgage Loans on the earliest Distribution Date on which it is permitted.

*   If applicable, indicates a number that is greater than zero but less than 0.5%.

Percent of Original Certificate Principal Balance Outstanding⁽¹⁾

	Class II-A-3 Prepayment Scenario
Distribution Date	Scenario I			Scenario II			Scenario III			Scenario IV			Scenario V
Initial Percentage		100	%		100	%		100	%		100	%		100	%
October 25, 2007		100			100			100			100			100
October 25, 2008		100			100			100			100			50
October 25, 2009		100			66			17			0			0
October 25, 2010		83			53			17			0			0
October 25, 2011		51			23			2			0			0
October 25, 2012		27			2			0			0			0
October 25, 2013		8			0			0			0			0
October 25, 2014		0			0			0			0			0
October 25, 2015		0			0			0			0			0
October 25, 2016		0			0			0			0			0
October 25, 2017		0			0			0			0			0
October 25, 2018		0			0			0			0			0
October 25, 2019		0			0			0			0			0
October 25, 2020		0			0			0			0			0
October 25, 2021		0			0			0			0			0
October 25, 2022		0			0			0			0			0
October 25, 2023		0			0			0			0			0
October 25, 2024		0			0			0			0			0
October 25, 2025		0			0			0			0			0
October 25, 2026		0			0			0			0			0
October 25, 2027		0			0			0			0			0
October 25, 2028		0			0			0			0			0
October 25, 2029		0			0			0			0			0
October 25, 2030		0			0			0			0			0
October 25, 2031		0			0			0			0			0
October 25, 2032		0			0			0			0			0
October 25, 2033		0			0			0			0			0
October 25, 2034		0			0			0			0			0
October 25, 2035		0			0			0			0			0
October 25, 2036		0			0			0			0			0
Weighted Average Life (years) to Maturity(2)		5.23			4.11			3.00			2.30			2.05
Weighted Average Life (years) to Optional Termination(2)(3)		5.23			4.11			3.00			2.30			2.05

___________________

⁽¹⁾  Rounded to the nearest whole percentage.

⁽²⁾   The weighted average life of any class of Certificates is determined by (i) multiplying the assumed net reduction, if any, in the principal amount on each Distribution Date on such class of Certificates by the number of years from the date of issuance of the Certificates to the related Distribution Date, (ii) summing the results, and (iii) dividing the sum by the aggregate amount of the assumed net reductions in principal amount on such class of Certificates.

⁽³⁾  Assumes an optional purchase of the Mortgage Loans on the earliest Distribution Date on which it is permitted.

*   If applicable, indicates a number that is greater than zero but less than 0.5%.

Percent of Original Certificate Principal Balance Outstanding⁽¹⁾

	Class II-A-4 Prepayment Scenario
Distribution Date	Scenario I			Scenario II			Scenario III			Scenario IV			Scenario V
Initial Percentage		100	%		100	%		100	%		100	%		100	%
October 25, 2007		100			100			100			100			100
October 25, 2008		100			100			100			100			100
October 25, 2009		100			100			100			22			0
October 25, 2010		100			100			100			22			0
October 25, 2011		100			100			100			22			0
October 25, 2012		100			100			69			22			0
October 25, 2013		100			74			46			22			0
October 25, 2014		88			52			30			15			0
October 25, 2015		67			37			20			9			0
October 25, 2016		51			27			14			4			0
October 25, 2017		38			19			9			1			0
October 25, 2018		29			14			5			0			0
October 25, 2019		22			10			1			0			0
October 25, 2020		17			6			0			0			0
October 25, 2021		13			2			0			0			0
October 25, 2022		10			0			0			0			0
October 25, 2023		6			0			0			0			0
October 25, 2024		3			0			0			0			0
October 25, 2025		1			0			0			0			0
October 25, 2026		0			0			0			0			0
October 25, 2027		0			0			0			0			0
October 25, 2028		0			0			0			0			0
October 25, 2029		0			0			0			0			0
October 25, 2030		0			0			0			0			0
October 25, 2031		0			0			0			0			0
October 25, 2032		0			0			0			0			0
October 25, 2033		0			0			0			0			0
October 25, 2034		0			0			0			0			0
October 25, 2035		0			0			0			0			0
October 25, 2036		0			0			0			0			0
Weighted Average Life (years) to Maturity(2)		10.99			8.94			7.45			4.15			2.38
Weighted Average Life (years) to Optional Termination(2)(3)		8.45			6.88			5.73			3.23			2.38

___________________

⁽¹⁾  Rounded to the nearest whole percentage.

⁽²⁾  The weighted average life of any class of Certificates is determined by (i) multiplying the assumed net reduction, if any, in the principal amount on each Distribution Date on such class of Certificates by the number of years from the date of issuance of the Certificates to the related Distribution Date, (ii) summing the results, and (iii) dividing the sum by the aggregate amount of the assumed net reductions in principal amount on such class of Certificates.

⁽³⁾  Assumes an optional purchase of the Mortgage Loans on the earliest Distribution Date on which it is permitted.

*   If applicable, indicates a number that is greater than zero but less than 0.5%.

Percent of Original Certificate Principal Balance Outstanding(1)

	Class II-A-4 Prepayment Scenario
Distribution Date	Scenario I			Scenario II			Scenario III			Scenario IV			Scenario V
Initial Percentage		100	%		100	%		100	%		100	%		100	%
October 25, 2007		100			100			100			100			100
October 25, 2008		100			100			100			100			100
October 25, 2009		100			100			100			22			0
October 25, 2010		100			100			100			22			0
October 25, 2011		100			100			100			22			0
October 25, 2012		100			100			69			22			0
October 25, 2013		100			74			46			22			0
October 25, 2014		88			52			30			15			0
October 25, 2015		67			37			20			9			0
October 25, 2016		51			27			14			4			0
October 25, 2017		38			19			9			1			0
October 25, 2018		29			14			5			0			0
October 25, 2019		22			10			1			0			0
October 25, 2020		17			6			0			0			0
October 25, 2021		13			2			0			0			0
October 25, 2022		10			0			0			0			0
October 25, 2023		6			0			0			0			0
October 25, 2024		3			0			0			0			0
October 25, 2025		1			0			0			0			0
October 25, 2026		0			0			0			0			0
October 25, 2027		0			0			0			0			0
October 25, 2028		0			0			0			0			0
October 25, 2029		0			0			0			0			0
October 25, 2030		0			0			0			0			0
October 25, 2031		0			0			0			0			0
October 25, 2032		0			0			0			0			0
October 25, 2033		0			0			0			0			0
October 25, 2034		0			0			0			0			0
October 25, 2035		0			0			0			0			0
October 25, 2036		0			0			0			0			0
Weighted Average Life (years) to Maturity(2)		10.99			8.94			7.45			4.15			2.38
Weighted Average Life (years) to Optional Termination(2)(3)		8.45			6.88			5.73			3.23			2.38

___________________

⁽¹⁾  Rounded to the nearest whole percentage.

⁽²⁾  The weighted average life of any class of Certificates is determined by (i) multiplying the assumed net reduction, if any, in the principal amount on each Distribution Date on such class of Certificates by the number of years from the date of issuance of the Certificates to the related Distribution Date, (ii) summing the results, and (iii) dividing the sum by the aggregate amount of the assumed net reductions in principal amount on such class of Certificates.

⁽³⁾  Assumes an optional purchase of the Mortgage Loans on the earliest Distribution Date on which it is permitted.

*   If applicable, indicates a number that is greater than zero but less than 0.5%.

Percent of Original Certificate Principal Balance Outstanding⁽¹⁾

	Class M-2 Prepayment Scenario
Distribution Date	Scenario I			Scenario II			Scenario III			Scenario IV			Scenario V
Initial Percentage		100	%		100	%		100	%		100	%		100	%
October 25, 2007		100			100			100			100			100
October 25, 2008		100			100			100			100			100
October 25, 2009		100			100			100			100			100
October 25, 2010		100			98			100			100			99
October 25, 2011		96			59			31			76			37
October 25, 2012		64			32			9			23			4
October 25, 2013		40			12			0			0			0
October 25, 2014		21			0			0			0			0
October 25, 2015		8			0			0			0			0
October 25, 2016		0			0			0			0			0
October 25, 2017		0			0			0			0			0
October 25, 2018		0			0			0			0			0
October 25, 2019		0			0			0			0			0
October 25, 2020		0			0			0			0			0
October 25, 2021		0			0			0			0			0
October 25, 2022		0			0			0			0			0
October 25, 2023		0			0			0			0			0
October 25, 2024		0			0			0			0			0
October 25, 2025		0			0			0			0			0
October 25, 2026		0			0			0			0			0
October 25, 2027		0			0			0			0			0
October 25, 2028		0			0			0			0			0
October 25, 2029		0			0			0			0			0
October 25, 2030		0			0			0			0			0
October 25, 2031		0			0			0			0			0
October 25, 2032		0			0			0			0			0
October 25, 2033		0			0			0			0			0
October 25, 2034		0			0			0			0			0
October 25, 2035		0			0			0			0			0
October 25, 2036		0			0			0			0			0
Weighted Average Life (years) to Maturity(2)		6.81			5.52			4.80			5.54			4.88
Weighted Average Life (years) to Optional Termination(2)(3)		6.73			5.47			4.76			4.66			3.74

___________________

⁽¹⁾  Rounded to the nearest whole percentage.

⁽²⁾  The weighted average life of any class of Certificates is determined by (i) multiplying the assumed net reduction, if any, in the principal amount on each Distribution Date on such class of Certificates by the number of years from the date of issuance of the Certificates to the related Distribution Date, (ii) summing the results, and (iii) dividing the sum by the aggregate amount of the assumed net reductions in principal amount on such class of Certificates.

⁽³⁾  Assumes an optional purchase of the Mortgage Loans on the earliest Distribution Date on which it is permitted.

*   If applicable, indicates a number that is greater than zero but less than 0.5%.

Percent of Original Certificate Principal Balance Outstanding⁽¹⁾

	Class M-3 Prepayment Scenario
Distribution Date	Scenario I			Scenario II			Scenario III			Scenario IV			Scenario V
Initial Percentage		100	%		100	%		100	%		100	%		100	%
October 25, 2007		100			100			100			100			100
October 25, 2008		100			100			100			100			100
October 25, 2009		100			100			100			100			100
October 25, 2010		100			100			100			100			100
October 25, 2011		100			100			100			100			100
October 25, 2012		100			100			100			100			100
October 25, 2013		100			100			82			75			50
October 25, 2014		100			95			54			32			15
October 25, 2015		100			67			36			4			0
October 25, 2016		92			48			16			0			0
October 25, 2017		70			34			2			0			0
October 25, 2018		52			16			0			0			0
October 25, 2019		39			3			0			0			0
October 25, 2020		28			0			0			0			0
October 25, 2021		13			0			0			0			0
October 25, 2022		3			0			0			0			0
October 25, 2023		0			0			0			0			0
October 25, 2024		0			0			0			0			0
October 25, 2025		0			0			0			0			0
October 25, 2026		0			0			0			0			0
October 25, 2027		0			0			0			0			0
October 25, 2028		0			0			0			0			0
October 25, 2029		0			0			0			0			0
October 25, 2030		0			0			0			0			0
October 25, 2031		0			0			0			0			0
October 25, 2032		0			0			0			0			0
October 25, 2033		0			0			0			0			0
October 25, 2034		0			0			0			0			0
October 25, 2035		0			0			0			0			0
October 25, 2036		0			0			0			0			0
Weighted Average Life (years) to Maturity(2)		12.52			10.16			8.45			7.69			7.17
Weighted Average Life (years) to Optional Termination(2)(3)		8.58			6.99			5.83			4.66			3.74

___________________

⁽¹⁾  Rounded to the nearest whole percentage.

⁽²⁾  The weighted average life of any class of Certificates is determined by (i) multiplying the assumed net reduction, if any, in the principal amount on each Distribution Date on such class of Certificates by the number of years from the date of issuance of the Certificates to the related Distribution Date, (ii) summing the results, and (iii) dividing the sum by the aggregate amount of the assumed net reductions in principal amount on such class of Certificates.

⁽³⁾  Assumes an optional purchase of the Mortgage Loans on the earliest Distribution Date on which it is permitted.

*   If applicable, indicates a number that is greater than zero but less than 0.5%.

Percent of Original Certificate Principal Balance Outstanding⁽¹⁾

	Class M-4 Prepayment Scenario
Distribution Date	Scenario I			Scenario II			Scenario III			Scenario IV			Scenario V
Initial Percentage		100	%		100	%		100	%		100	%		100	%
October 25, 2007		100			100			100			100			100
October 25, 2008		100			100			100			100			100
October 25, 2009		100			100			100			100			100
October 25, 2010		72			56			42			28			17
October 25, 2011		55			39			28			17			9
October 25, 2012		41			28			18			10			1
October 25, 2013		31			20			12			6			0
October 25, 2014		24			14			8			0			0
October 25, 2015		18			10			3			0			0
October 25, 2016		13			7			0			0			0
October 25, 2017		10			1			0			0			0
October 25, 2018		8			0			0			0			0
October 25, 2019		6			0			0			0			0
October 25, 2020		0			0			0			0			0
October 25, 2021		0			0			0			0			0
October 25, 2022		0			0			0			0			0
October 25, 2023		0			0			0			0			0
October 25, 2024		0			0			0			0			0
October 25, 2025		0			0			0			0			0
October 25, 2026		0			0			0			0			0
October 25, 2027		0			0			0			0			0
October 25, 2028		0			0			0			0			0
October 25, 2029		0			0			0			0			0
October 25, 2030		0			0			0			0			0
October 25, 2031		0			0			0			0			0
October 25, 2032		0			0			0			0			0
October 25, 2033		0			0			0			0			0
October 25, 2034		0			0			0			0			0
October 25, 2035		0			0			0			0			0
October 25, 2036		0			0			0			0			0
Weighted Average Life (years) to Maturity(2)		6.26			5.21			4.58			4.21			3.52
Weighted Average Life (years) to Optional Termination(2)(3)		5.73			4.78			4.23			3.92			3.28

___________________

⁽¹⁾  Rounded to the nearest whole percentage.

⁽²⁾  The weighted average life of any class of Certificates is determined by (i) multiplying the assumed net reduction, if any, in the principal amount on each Distribution Date on such class of Certificates by the number of years from the date of issuance of the Certificates to the related Distribution Date, (ii) summing the results, and (iii) dividing the sum by the aggregate amount of the assumed net reductions in principal amount on such class of Certificates.

⁽³⁾  Assumes an optional purchase of the Mortgage Loans on the earliest Distribution Date on which it is permitted.

*   If applicable, indicates a number that is greater than zero but less than 0.5%.

Percent of Original Certificate Principal Balance Outstanding⁽¹⁾

	Class M-5 Prepayment Scenario
Distribution Date	Scenario I			Scenario II			Scenario III			Scenario IV			Scenario V
Initial Percentage		100	%		100	%		100	%		100	%		100	%
October 25, 2007		100			100			100			100			100
October 25, 2008		100			100			100			100			100
October 25, 2009		100			100			100			100			36
October 25, 2010		72			56			42			28			17
October 25, 2011		55			39			28			17			9
October 25, 2012		41			28			18			10			0
October 25, 2013		31			20			12			2			0
October 25, 2014		24			14			8			0			0
October 25, 2015		18			10			0			0			0
October 25, 2016		13			7			0			0			0
October 25, 2017		10			0			0			0			0
October 25, 2018		8			0			0			0			0
October 25, 2019		1			0			0			0			0
October 25, 2020		0			0			0			0			0
October 25, 2021		0			0			0			0			0
October 25, 2022		0			0			0			0			0
October 25, 2023		0			0			0			0			0
October 25, 2024		0			0			0			0			0
October 25, 2025		0			0			0			0			0
October 25, 2026		0			0			0			0			0
October 25, 2027		0			0			0			0			0
October 25, 2028		0			0			0			0			0
October 25, 2029		0			0			0			0			0
October 25, 2030		0			0			0			0			0
October 25, 2031		0			0			0			0			0
October 25, 2032		0			0			0			0			0
October 25, 2033		0			0			0			0			0
October 25, 2034		0			0			0			0			0
October 25, 2035		0			0			0			0			0
October 25, 2036		0			0			0			0			0
Weighted Average Life (years) to Maturity(2)		6.22			5.16			4.52			4.10			3.40
Weighted Average Life (years) to Optional Termination(2)(3)		5.73			4.76			4.20			3.83			3.18

___________________

⁽¹⁾  Rounded to the nearest whole percentage.

⁽²⁾  The weighted average life of any class of Certificates is determined by (i) multiplying the assumed net reduction, if any, in the principal amount on each Distribution Date on such class of Certificates by the number of years from the date of issuance of the Certificates to the related Distribution Date, (ii) summing the results, and (iii) dividing the sum by the aggregate amount of the assumed net reductions in principal amount on such class of Certificates.

⁽³⁾  Assumes an optional purchase of the Mortgage Loans on the earliest Distribution Date on which it is permitted.

*   If applicable, indicates a number that is greater than zero but less than 0.5%.

Percent of Original Certificate Principal Balance Outstanding⁽¹⁾

	Class M-6 Prepayment Scenario
Distribution Date	Scenario I			Scenario II			Scenario III			Scenario IV			Scenario V
Initial Percentage		100	%		100	%		100	%		100	%		100	%
October 25, 2007		100			100			100			100			100
October 25, 2008		100			100			100			100			100
October 25, 2009		100			100			100			100			32
October 25, 2010		72			56			42			28			17
October 25, 2011		55			39			28			17			9
October 25, 2012		41			28			18			10			0
October 25, 2013		31			20			12			0			0
October 25, 2014		24			14			6			0			0
October 25, 2015		18			10			0			0			0
October 25, 2016		13			*			0			0			0
October 25, 2017		10			0			0			0			0
October 25, 2018		5			0			0			0			0
October 25, 2019		0			0			0			0			0
October 25, 2020		0			0			0			0			0
October 25, 2021		0			0			0			0			0
October 25, 2022		0			0			0			0			0
October 25, 2023		0			0			0			0			0
October 25, 2024		0			0			0			0			0
October 25, 2025		0			0			0			0			0
October 25, 2026		0			0			0			0			0
October 25, 2027		0			0			0			0			0
October 25, 2028		0			0			0			0			0
October 25, 2029		0			0			0			0			0
October 25, 2030		0			0			0			0			0
October 25, 2031		0			0			0			0			0
October 25, 2032		0			0			0			0			0
October 25, 2033		0			0			0			0			0
October 25, 2034		0			0			0			0			0
October 25, 2035		0			0			0			0			0
October 25, 2036		0			0			0			0			0
Weighted Average Life (years) to Maturity(2)		6.18			5.12			4.46			4.00			3.31
Weighted Average Life (years) to Optional Termination(2)(3)		5.73			4.76			4.17			3.76			3.11

___________________

⁽¹⁾  Rounded to the nearest whole percentage.

⁽²⁾  The weighted average life of any class of Certificates is determined by (i) multiplying the assumed net reduction, if any, in the principal amount on each Distribution Date on such class of Certificates by the number of years from the date of issuance of the Certificates to the related Distribution Date, (ii) summing the results, and (iii) dividing the sum by the aggregate amount of the assumed net reductions in principal amount on such class of Certificates.

⁽³⁾  Assumes an optional purchase of the Mortgage Loans on the earliest Distribution Date on which it is permitted.

*   If applicable, indicates a number that is greater than zero but less than 0.5%.

Percent of Original Certificate Principal Balance Outstanding⁽¹⁾

	Class M-7 Prepayment Scenario
Distribution Date	Scenario I			Scenario II			Scenario III			Scenario IV			Scenario V
Initial Percentage		100	%		100	%		100	%		100	%		100	%
October 25, 2007		100			100			100			100			100
October 25, 2008		100			100			100			100			100
October 25, 2009		100			100			100			100			32
October 25, 2010		72			56			42			28			17
October 25, 2011		55			39			28			17			4
October 25, 2012		41			28			18			8			0
October 25, 2013		31			20			12			0			0
October 25, 2014		24			14			0			0			0
October 25, 2015		18			8			0			0			0
October 25, 2016		13			0			0			0			0
October 25, 2017		9			0			0			0			0
October 25, 2018		0			0			0			0			0
October 25, 2019		0			0			0			0			0
October 25, 2020		0			0			0			0			0
October 25, 2021		0			0			0			0			0
October 25, 2022		0			0			0			0			0
October 25, 2023		0			0			0			0			0
October 25, 2024		0			0			0			0			0
October 25, 2025		0			0			0			0			0
October 25, 2026		0			0			0			0			0
October 25, 2027		0			0			0			0			0
October 25, 2028		0			0			0			0			0
October 25, 2029		0			0			0			0			0
October 25, 2030		0			0			0			0			0
October 25, 2031		0			0			0			0			0
October 25, 2032		0			0			0			0			0
October 25, 2033		0			0			0			0			0
October 25, 2034		0			0			0			0			0
October 25, 2035		0			0			0			0			0
October 25, 2036		0			0			0			0			0
Weighted Average Life (years) to Maturity(2)		6.12			5.07			4.41			3.92			3.24
Weighted Average Life (years) to Optional Termination(2)(3)		5.73			4.76			4.15			3.71			3.06

___________________

⁽¹⁾  Rounded to the nearest whole percentage.

⁽²⁾  The weighted average life of any class of Certificates is determined by (i) multiplying the assumed net reduction, if any, in the principal amount on each Distribution Date on such class of Certificates by the number of years from the date of issuance of the Certificates to the related Distribution Date, (ii) summing the results, and (iii) dividing the sum by the aggregate amount of the assumed net reductions in principal amount on such class of Certificates.

⁽³⁾  Assumes an optional purchase of the Mortgage Loans on the earliest Distribution Date on which it is permitted.

*   If applicable, indicates a number that is greater than zero but less than 0.5%.

Percent of Original Certificate Principal Balance Outstanding⁽¹⁾

	Class M-8 Prepayment Scenario
Distribution Date	Scenario I			Scenario II			Scenario III			Scenario IV			Scenario V
Initial Percentage		100	%		100	%		100	%		100	%		100	%
October 25, 2007		100			100			100			100			100
October 25, 2008		100			100			100			100			100
October 25, 2009		100			100			100			100			32
October 25, 2010		72			56			42			28			17
October 25, 2011		55			39			28			17			0
October 25, 2012		41			28			18			0			0
October 25, 2013		31			20			10			0			0
October 25, 2014		24			14			0			0			0
October 25, 2015		18			0			0			0			0
October 25, 2016		13			0			0			0			0
October 25, 2017		0			0			0			0			0
October 25, 2018		0			0			0			0			0
October 25, 2019		0			0			0			0			0
October 25, 2020		0			0			0			0			0
October 25, 2021		0			0			0			0			0
October 25, 2022		0			0			0			0			0
October 25, 2023		0			0			0			0			0
October 25, 2024		0			0			0			0			0
October 25, 2025		0			0			0			0			0
October 25, 2026		0			0			0			0			0
October 25, 2027		0			0			0			0			0
October 25, 2028		0			0			0			0			0
October 25, 2029		0			0			0			0			0
October 25, 2030		0			0			0			0			0
October 25, 2031		0			0			0			0			0
October 25, 2032		0			0			0			0			0
October 25, 2033		0			0			0			0			0
October 25, 2034		0			0			0			0			0
October 25, 2035		0			0			0			0			0
October 25, 2036		0			0			0			0			0
Weighted Average Life (years) to Maturity(2)		6.04			4.99			4.34			3.84			3.17
Weighted Average Life (years) to Optional Termination(2)(3)		5.73			4.74			4.14			3.67			3.03

___________________

⁽¹⁾  Rounded to the nearest whole percentage.

⁽²⁾  The weighted average life of any class of Certificates is determined by (i) multiplying the assumed net reduction, if any, in the principal amount on each Distribution Date on such class of Certificates by the number of years from the date of issuance of the Certificates to the related Distribution Date, (ii) summing the results, and (iii) dividing the sum by the aggregate amount of the assumed net reductions in principal amount on such class of Certificates.

⁽³⁾  Assumes an optional purchase of the Mortgage Loans on the earliest Distribution Date on which it is permitted.

*   If applicable, indicates a number that is greater than zero but less than 0.5%.

Percent of Original Certificate Principal Balance Outstanding⁽¹⁾

	Class M-9 Prepayment Scenario
Distribution Date	Scenario I			Scenario II			Scenario III			Scenario IV			Scenario V
Initial Percentage		100	%		100	%		100	%		100	%		100	%
October 25, 2007		100			100			100			100			100
October 25, 2008		100			100			100			100			100
October 25, 2009		100			100			100			100			32
October 25, 2010		72			56			42			28			15
October 25, 2011		55			39			28			15			0
October 25, 2012		41			28			18			0			0
October 25, 2013		31			20			0			0			0
October 25, 2014		24			5			0			0			0
October 25, 2015		18			0			0			0			0
October 25, 2016		4			0			0			0			0
October 25, 2017		0			0			0			0			0
October 25, 2018		0			0			0			0			0
October 25, 2019		0			0			0			0			0
October 25, 2020		0			0			0			0			0
October 25, 2021		0			0			0			0			0
October 25, 2022		0			0			0			0			0
October 25, 2023		0			0			0			0			0
October 25, 2024		0			0			0			0			0
October 25, 2025		0			0			0			0			0
October 25, 2026		0			0			0			0			0
October 25, 2027		0			0			0			0			0
October 25, 2028		0			0			0			0			0
October 25, 2029		0			0			0			0			0
October 25, 2030		0			0			0			0			0
October 25, 2031		0			0			0			0			0
October 25, 2032		0			0			0			0			0
October 25, 2033		0			0			0			0			0
October 25, 2034		0			0			0			0			0
October 25, 2035		0			0			0			0			0
October 25, 2036		0			0			0			0			0
Weighted Average Life (years) to Maturity(2)		5.93			4.90			4.26			3.75			3.08
Weighted Average Life (years) to Optional Termination(2)(3)		5.73			4.74			4.13			3.64			2.99

___________________

⁽¹⁾  Rounded to the nearest whole percentage.

⁽²⁾  The weighted average life of any class of Certificates is determined by (i) multiplying the assumed net reduction, if any, in the principal amount on each Distribution Date on such class of Certificates by the number of years from the date of issuance of the Certificates to the related Distribution Date, (ii) summing the results, and (iii) dividing the sum by the aggregate amount of the assumed net reductions in principal amount on such class of Certificates.

⁽³⁾  Assumes an optional purchase of the Mortgage Loans on the earliest Distribution Date on which it is permitted.

*   If applicable, indicates a number that is greater than zero but less than 0.5%.

Yield Sensitivity of the Mezzanine Certificates

If the Certificate Principal Balances of the Class C Certificates and each class of Mezzanine Certificates with a lower payment priority have been reduced to zero, the yield to maturity on the remaining class of Mezzanine Certificates with the lowest payment priority will become extremely sensitive to losses on the Mortgage Loans (and the timing thereof) that are covered by subordination, because the entire amount of any Realized Losses (to the extent not covered by Net Monthly Excess Cashflow), will be allocated to those Certificates. The initial undivided interests in the Trust evidenced by the Class M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the Class M-5 Certificates, the Class M-6 Certificates, the Class M-7 Certificates, the Class M-8 Certificates, the Class M-9 Certificates, the Class M-10 Certificates, the Class M-11 Certificates, and the Class C Certificates are approximately 5.10%, approximately 4.90%, approximately 1.70%, approximately 1.80%, approximately 1.65%, approximately 1.20%, approximately 1.25%, approximately 0.80%, approximately 1.15%, approximately 1.25%, approximately 1.00% and approximately 0.65%, respectively. Investors in the Mezzanine Certificates should fully consider the risk that Realized Losses on the Mortgage Loans could result in the failure of such investors to fully recover their investments. In addition, once Realized Losses have been allocated to a class of Mezzanine Certificates, such amounts with respect to such Certificates will no longer accrue interest and will not be reinstated thereafter (except to the extent of Subsequent Recoveries as set forth in the Pooling Agreement) and no amounts in respect thereof will be distributable to the Holders of those Certificates. However, Allocated Realized Loss Amounts may be paid to the holders of the applicable Mezzanine Certificates from Net Monthly Excess Cashflow in the priorities set forth under “Description of the Certificates—Overcollateralization Provisions” or from Net Swap Payments received from the Swap Provider “Description of the Certificates—Interest Rate Swap Agreement, the Swap Provider and the Supplemental Interest Trust” in this prospectus supplement.

The Mezzanine Certificates will not be entitled to any principal distributions until the Stepdown Date or during any period in which a Trigger Event is in effect, unless the Certificate Principal Balances of the Class A Certificates have been reduced to zero. As a result, the weighted average lives of the Mezzanine Certificates will be longer than would otherwise be the case if distributions of principal were allocated on a pro rata basis among the Class A Certificates and the Mezzanine Certificates. As a result of the longer weighted average lives of the Mezzanine Certificates, the holders of such Certificates have a greater risk of suffering a loss on their investments. Further, because a Trigger Event may be based on delinquencies, it is possible for the Mezzanine Certificates to receive no principal distributions (unless the Certificate Principal Balance of the Class A Certificates has been reduced to zero) on and after the Stepdown Date even if no losses have occurred on the Mortgage Pool. For additional considerations relating to the yield on the Mezzanine Certificates, see “Yield Considerations” and “Maturity and Prepayment Considerations” in the prospectus.

USE OF PROCEEDS

The Depositor will apply the net proceeds of the sale of the Offered Certificates to the purchase of the Mortgage Loans transferred to the Trust and to make deposits into the Interest Coverage Accounts and Pre-Funding Accounts, if any.

FEDERAL INCOME TAX CONSEQUENCES

General

One or more elections will be made to treat designated portions of the Trust (exclusive of the Pre-Funding Accounts, the Net WAC Rate Carryover Reserve Account, the Interest Coverage Accounts, if any, the Swap Account, the Supplemental Interest Trust, the Interest Rate Swap Agreement, any subsequent mortgage loan interest and any Servicer prepayment charge payment amounts, as defined more fully herein or in the Pooling Agreement) as a real estate mortgage investment conduit (a “REMIC”) for federal income tax purposes. Upon the issuance of the Class A and Mezzanine Certificates, Thacher Proffitt & Wood llp, counsel to the Depositor, will deliver its opinion generally to the effect that, assuming compliance with all provisions of the Pooling Agreement, for federal income tax purposes, each REMIC elected by the Trust will qualify as a REMIC under Sections 860A through 860G of the Internal Revenue Code of 1986 (the “Code”).

For federal income tax purposes, (i) the Residual Certificates will consist of components, each of which will represent the sole class of “residual interests” in each REMIC elected by the Trust and (ii) the Class A and Mezzanine Certificates (exclusive of any right of the holders of such Certificates to receive distributions from the Net WAC Rate Carryover Reserve Account or the Swap Account in respect of Net WAC Rate Carryover Amounts or the obligation to make payments to the Swap Account) will represent the “regular interests” in, and which generally will be treated as debt instruments of, a REMIC. See “Federal Income Tax Consequences—REMIC —Classification of REMICs” in the prospectus.

Each class of Class A and Mezzanine Certificates will also represent the rights to receive payments in respect of Net WAC Rate Carryover Amounts, which amounts will not be an entitlement from any REMIC but from the Net WAC Rate Carryover Reserve Account.

Each holder of a Class A or Mezzanine Certificates is deemed to own an undivided beneficial ownership interest in a REMIC regular interest and the right to receive payments from the Net WAC Rate Carryover Reserve Account or the Swap Account in respect of Net WAC Rate Carryover Amounts or the obligation to make payments to the Swap Account. The Net WAC Rate Carryover Reserve Account, the Swap Agreement and the Swap Account are not assets of any REMIC. The REMIC regular interest corresponding to a Class A or Mezzanine Certificate will be entitled to receive interest and principal payments at the times and in the amounts equal to those made on the certificate to which it corresponds, except that (i) the maximum interest rate of that REMIC regular interest will equal the Net WAC Rate computed for this purpose by limiting the Notional Amount of the Interest Rate Swap Agreement to the aggregate principal balance of the Mortgage Loans and (ii) any Swap Termination Payment will be treated as being payable solely from Net Monthly Excess Cashflow. As a result of the foregoing, the amount of distributions on the REMIC regular interest corresponding to a Class A or Mezzanine Certificate may exceed the actual amount of distributions on the Class A or Mezzanine Certificate.

The treatment of amounts received by a holder of a Class A or Mezzanine Certificates under such Certificateholder’s right to receive Net WAC Rate Carryover Amounts will depend on the portion, if any, of such Certificateholder’s purchase price allocable thereto. Under the REMIC Regulations, each holder of a Class A or Mezzanine Certificate must allocate its purchase price for such Certificate among its undivided interest in the regular interest of the related REMIC and the right to receive payments from the Net WAC Rate Carryover Reserve Account and the Swap Account in respect of Net WAC Rate Carryover Amounts in accordance with the relative fair market values of each property right.

Each holder will treat distributions made to the holders of the Class A and Mezzanine Certificates with respect to the Net WAC Rate Carryover Amount, as includible in income based on the regulations relating to notional principal contracts (the “Notional Principal Contract Regulations”). The OID Regulations provide that the Trust’s allocation of the issue price is binding on all holders unless the holder explicitly discloses on its tax return that its allocation is different from the Trust’s allocation. For tax reporting purposes, the Trustee may treat the right to receive payments from the Net WAC Rate Carryover Reserve Account and the Swap Account in respect of Net WAC Rate Carryover Amounts as having more than a de minimis value. Following its receipt of all information necessary to calculate such amounts from an Underwriter, such amounts may be obtained from the Trustee upon request. Under the REMIC Regulations, the Trustee is required to account for the REMIC regular interest, the right to receive payments from the Net WAC Rate Carryover Reserve Account and the Swap Account in respect of Net WAC Rate Carryover Amounts as discrete property rights.

Holders of the Class A or Mezzanine Certificates are advised to consult their own tax advisors regarding the allocation of issue price, timing, character and source of income and deductions resulting from the ownership of such Certificates. Treasury regulations have been promulgated under Section 1275 of the Code generally providing for the integration of a “qualifying debt instrument” with a hedge if the combined cash flows of the components are substantially equivalent to the cash flows on a variable rate debt instrument. However, such regulations specifically disallow integration of debt instruments subject to Section 1272(a)(6) of the Code. Therefore, holders of the Class A or Mezzanine Certificates will be unable to use the integration method provided for under such regulations with respect to those Certificates. In the event that the right to receive Net WAC Rate Carryover Amounts is characterized as a “notional principal contract” for federal income tax purposes, holders of the Class A or Mezzanine Certificates will be entitled to amortize, the separate price paid for the right to receive Net WAC Rate Carryover Amounts under the notional principal contract regulations.

Any payments made to a beneficial owner of a Class A or Mezzanine Certificate in excess of the amounts payable on the corresponding REMIC regular interest will be treated as having been received as a payment on a notional principal contract. To the extent the sum of such periodic payments for any year exceeds that year’s amortized cost of any Net WAC Rate Carryover Amounts, such excess represents net income for that year. Conversely, to the extent that the amount of that year’s amortized cost exceeds the sum of the periodic payments, such excess shall represent a net deduction for that year. In addition, any amounts payable on such REMIC regular interest in excess of the amount of payments on the Class A or Mezzanine Certificate to which it relates will be treated as having been received by the beneficial owners of such Certificates and then paid by such owners to the Swap Account pursuant to the Swap Administration Agreement, and such excess should be treated as a periodic payment on a notional principal contract that is made by the beneficial owner during the applicable taxable year and that is taken into account in determining the beneficial owner’s net income or net deduction with respect to any Net WAC Rate Carryover Amounts for such taxable year. Although not clear, net income or a net deduction with respect to Net WAC Rate Carryover Amounts should be treated as ordinary income or as an ordinary deduction. Holders of the Class A and Mezzanine Certificates are advised to consult their own tax advisors regarding the tax characterization and timing issues relating to a Swap Termination Payment.

Because a beneficial owner of any Net WAC Rate Carryover Amounts will be required to include in income the amount deemed to have been paid by such owner, but may not be able to deduct that amount from income, a beneficial owner of a Class A or Mezzanine Certificate may have income that exceeds cash distributions on the Class A or Mezzanine Certificate, in any period and over the term of the Class A or Mezzanine Certificate. As a result, the Class A or Mezzanine Certificates may not be a suitable investment for any taxpayer whose net deduction with respect to any Net WAC Rate Carryover Amounts would be subject to the limitations described above.

Upon the sale of a Class A or Mezzanine Certificates, the amount of the sale allocated to the selling Certificateholder’s right to receive payments from the Net WAC Rate Carryover Reserve Account and the Swap Account in respect of Net WAC Rate Carryover Amounts would be considered a “termination payment” under the Notional Principal Contract Regulations allocable to the related Certificate, as the case may be. A holder of a Class A or Mezzanine Certificates will have gain or loss from such a termination of the right to receive payments from the Net WAC Rate Carryover Reserve Account and the Swap Account in respect of Net WAC Rate Carryover Amounts, equal to (i) any termination payment it received or is deemed to have received minus (ii) the unamortized portion of any amount paid (or deemed paid) by the Certificateholder upon entering into or acquiring its interest in the right to receive payments from the Net WAC Rate Carryover Reserve Account and the Swap Account in respect of Net WAC Rate Carryover Amounts. Gain or loss realized upon the termination of the right to receive payments from the Net WAC Rate Carryover Reserve Account and the Swap Account in respect of Net WAC Rate Carryover Amounts will generally be treated as capital gain or loss. Moreover, in the case of a bank or thrift institution, Code Section 582(c) would likely not apply to treat such gain or loss as ordinary.

It is possible that the right to receive payments in respect of Net WAC Rate Carryover Amounts, could be treated as a partnership among the holders of all of the Certificates, in which case holders of the Class A or Mezzanine Certificates potentially would be subject to different timing of income and foreign holders of such Certificates could be subject to withholding in respect of any Net WAC Rate Carryover Amounts. Holders of the Class A or Mezzanine Certificates are advised to consult their own tax advisors regarding the allocation of issue price, timing, character and source of income and deductions resulting from the ownership of their Certificates.

For federal income tax reporting purposes, the Offered Certificates may be issued with original issue discount. The prepayment assumption that will be used in determining the rate of accrual of original issue discount, premium and market discount, if any, for the Adjustable-Rate Mortgage Loans for federal income tax purposes assumes a prepayment rate of 100% of the Adjustable-Rate Prepayment Vector as described herein and for the Fixed-Rate Mortgage Loans for federal income tax purposes assumes a prepayment rate of 115% of the Fixed-Rate Prepayment Vector as described herein. No representation is made that the Mortgage Loans will prepay at such rate or at any other rate. See “Federal Income Tax Consequences—REMICs—Taxation of Owners of REMIC Regular Certificates—Original Issue Discount” in the prospectus.

The Internal Revenue Service (the “IRS”) has issued regulations (the “OID Regulations”) under Sections 1271 to 1275 of the Code generally addressing the treatment of debt instruments issued with original issue discount. Purchasers of the Class A and Mezzanine Certificates should be aware that the OID Regulations do not adequately address certain issues relevant to, or are not applicable to, prepayable securities such as the Class A and Mezzanine Certificates. In addition, there is considerable uncertainty concerning the application of the OID Regulations to REMIC Regular Certificates that provide for payments based on an adjustable rate such as the Class A and Mezzanine Certificates. Because of the uncertainty concerning the application of Section 1272(a)(6) of the Code to such Certificates and because the rules of the OID Regulations relating to debt instruments having an adjustable rate of interest are limited in their application in ways that could preclude their application to such Certificates even in the absence of Section 1272(a)(6) of the Code, the IRS could assert that such Certificates should be treated as issued with original issue discount or should be governed by the rules applicable to debt instruments having contingent payments or by some other method not yet set forth in regulations. Prospective purchasers of the Class A and Mezzanine Certificates are advised to consult their tax advisors concerning the tax treatment of such Certificates.

It appears that a reasonable method of reporting original issue discount with respect to the Class A or Mezzanine Certificates, if such Certificates are required to be treated as issued with original issue discount, generally would be to report all income with respect to such Certificates as original issue discount for each period, computing such original issue discount (i) by assuming that the value of the applicable index will remain constant for purposes of determining the original yield to maturity of, and projecting future distributions on such Certificates, thereby treating such Certificates as fixed-rate instruments to which the original issue discount computation rules described in the prospectus can be applied, and (ii) by accounting for any positive or negative variation in the actual value of the applicable index in any period from its assumed value as a current adjustment to original issue discount with respect to such period. See “Federal Income Tax Consequences—REMICs—Taxation of Owners of REMIC Regular Certificates—Original Issue Discount” in the prospectus.

Certain of the Certificates may be treated for federal income tax purposes as having been issued at a premium. Whether any holder of a Certificate will be treated as holding such Certificate with amortizable bond premium will depend on such Certificateholder’s purchase price and the distributions remaining to be made on such Certificate at the time of its acquisition by such Certificateholder. Holders of such Certificates should consult their own tax advisors regarding the possibility of making an election to amortize such premium. See “Federal Income Tax Consequences— REMICs—Taxation of Owners of REMIC Regular Certificates—Premium” in the prospectus.

The REMIC regular interest component of each Class A and Mezzanine Certificate will be treated as assets described in Section 7701(a)(19)(C) of the Code, and as "real estate assets" under Section 856(c)(5)(B) of the Code, generally, in the same proportion that the assets of the Trust, exclusive of the assets not included in any REMIC, would be so treated. In addition, the interest derived from the REMIC regular interest component of each Class A and Mezzanine Certificate will be interest on obligations secured by interests in real property for purposes of section 856(c)(3) of the Code, subject to the same limitation in the preceding sentence. The Notional Principal Contract component of each Regular Certificate will not qualify, however, as an asset described in Section 7701(a)(19)(C) of the Code, as a real estate asset under Section 856(c)(5)(B) of the Code or as a "qualified mortgage" within the meaning of Section 860G(a)(3) of the Code. As a result, the Regular Certificates generally may not be a suitable investment for a REMIC, a real estate investment trust or an entity intending to qualify under Section 7701(a)(19)(C) of the Code. See “Federal Income Tax Consequences—REMICs— Characterization of Investments in REMIC Certificates” in the prospectus.

The holders of the Class A and Mezzanine Certificates will be required to include in income interest on such Certificates in accordance with the accrual method of accounting. As noted above, each holder of a Class A or Mezzanine Certificates will be required to allocate a portion of the purchase price paid for the Certificates to the right to receive payments from the Net WAC Rate Carryover Reserve Account and the Swap Account in respect of Net WAC Rate Carryover Amounts. The value of the right to receive any such Net WAC Rate Carryover Amount is a question of fact which could be subject to differing interpretations. Because the right to receive payments from the Net WAC Rate Carryover Reserve Account and the Swap Account in respect of Net WAC Rate Carryover Amounts is treated as a separate right of Class A and Mezzanine Certificates not distributable by any REMIC elected by the Trust, such right will not be treated as a qualifying asset for any Certificateholder that is a mutual savings bank, domestic building and loan association, real estate investment trust, or real estate mortgage investment conduit and any amounts received from the Net WAC Rate Carryover Reserve Account and the Swap Account will not be qualifying real estate income for real estate investment trusts.

It is not anticipated that any REMIC elected by the Trust will engage in any transactions that would subject it to the prohibited transactions tax as defined in Section 860F(a)(2) of the Code, the contributions tax as defined in Section 860G(d) of the Code or the tax on net income from foreclosure property as defined in Section 860G(c) of the Code. However, in the event that any such tax is imposed on any REMIC elected by the Trust, such tax will be borne (i) by the Trustee, if the Trustee has breached its obligations with respect to REMIC compliance under the Pooling Agreement, (ii) by the Servicer, if the Servicer has breached its obligations with respect to REMIC compliance under the Pooling Agreement and (iii) otherwise by the Trust, with a resulting reduction in amounts otherwise distributable to the holders of the Certificates, including the Class A and Mezzanine Certificates. See “Description of the Securities—General” and “Federal Income Tax Consequences—REMICs—Prohibited Transactions and Other Possible REMIC Taxes” in the prospectus.

The responsibility for filing annual federal information returns and other reports will be borne by the Trustee or the Servicer. See “Federal Income Tax Consequences—REMICs—Reporting and Other Administrative Matters” in the prospectus.

For further information regarding the federal income tax consequences of investing in the Class A and Mezzanine Certificates, see “Federal Income Tax Consequences—REMICs” in the prospectus.

CONSIDERATIONS FOR BENEFIT PLAN INVESTORS

A fiduciary of any employee benefit plan or other plan or arrangement subject to ERISA or Section 4975 of the Code (a “Plan”), or any insurance company, whether through its general or separate accounts, or any other person investing plan assets of a Plan, should carefully review with its legal advisors whether the purchase or holding of an Offered Certificate could give rise to a transaction prohibited or not otherwise permissible under ERISA or Section 4975 of the Code. The Department of Labor granted the Underwriters’ Exemption (described under this section) to the Underwriters as Prohibited Transaction Exemption, or PTE 93-31 at 58 F.R. 28620, as amended on July 21, 1997 by PTE 97-34 at 62 F.R. 39021, as further amended on November 13, 2000 by PTE 2000-58 at 65 F.R. 67765 and as further amended on August 22, 2002 by PTE 2002-41 at 67 F.R. 54487. PTE 2002-41 amended the Underwriters’ Exemption to provide that the trustee maybe an affiliate of the underwriter, notwithstanding the provisions of PTE 2000-58 to the contrary.

The Underwriters’ Exemption contains a number of conditions which must be met for the exemption to apply, including the requirements that the Offered Certificates be rated at least “BBB-” (or its equivalent) by Fitch, Moody’s or S&P at the time of the Plan’s purchase and that the investing Plan must be an “accredited investor” as defined in Rule 501(a)(1) of Regulation D of the Securities and Exchange Commission under the Securities Act. A fiduciary of a Plan contemplating purchasing an Offered Certificate must make its own determination that the conditions set forth in the Underwriters’ Exemption will be satisfied with respect to the Certificates. No Plans or persons investing with plan assets will be permitted to purchase any Offered Certificates prior to the expiration of the Funding Period.

For so long as the holder of an offered certificate also holds an interest in the Supplemental Interest Trust, the holder will be deemed to have acquired and be holding the offered certificate without the right to receive payments from the Supplemental Interest Trust and, separately, the right to receive payments from the Supplemental Interest Trust. The Underwriters’ Exemption is not applicable to the acquisition, holding and transfer of an interest in the Supplemental Interest Trust. In addition, while the Supplemental Interest Trust is in existence, it is possible that not all of the requirements for the Underwriters’ Exemption to apply to the acquisition, holding and transfer of offered certificates will be satisfied. However, if the Underwriters’ Exemption is not available, there may be other exemptions that may apply. Accordingly, after the expiration of the Funding Period, no Plan or other person using assets of a Plan may acquire or hold an offered certificate while the Supplemental Interest Trust is in existence, unless (1) such Plan is an accredited investor within the meaning of the Underwriters’ Exemption and (2) such acquisition or holding is eligible for the exemptive relief available under Department of Labor Prohibited Transaction Class Exemption 84-14 (for transactions by independent “qualified professional asset managers”), 91-38 (for transactions by bank collective investment funds), 90-1 (for transactions by insurance company pooled separate accounts), 95-60 (for transactions by insurance company general accounts) or 96-23 (for transactions effected by “in-house asset managers”). After the expiration of the Funding Period, for so long as the Supplemental Interest Trust is in existence, each beneficial owner of an offered certificate or any interest therein, shall be deemed to have represented, by virtue of its acquisition or holding of the offered certificate, or interest therein, that either (i) it is not a Plan or (ii) (A) it is an accredited investor within the meaning of the Underwriters’ Exemption and (B) the acquisition and holding of such certificate and the separate right to receive payments from the Supplemental Interest Trust are eligible for the exemptive relief available under one of the five prohibited transaction class exemptions enumerated above.

Each beneficial owner of an offered Mezzanine Certificate or any interest therein who acquires such certificate after the termination of the Supplemental Interest Trust and the expiration of the Funding Period will be deemed to have represented, by virtue of its acquisition or holding of that certificate or interest therein, that either (i) it is not a plan investor, (ii) it has acquired and is holding such Mezzanine Certificates in reliance on the Underwriters’ Exemption, and that it understands that there are certain conditions to the availability of the Underwriters’ Exemption, including that the Mezzanine Certificates must be rated, at the time of purchase, not lower than “BBB-” (or its equivalent) by Fitch, Moody’s or S&P or (iii) (1) it is an insurance company, (2) the source of funds used to acquire or hold the certificate or interest therein is an “insurance company general account,” as such term is defined in PTCE 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have been satisfied.

If any Certificate or any interest therein is acquired or held in violation of the conditions described in this section, the next preceding permitted beneficial owner will be treated as the beneficial owner of that Certificate, retroactive to the date of transfer to the purported beneficial owner. Any purported beneficial owner whose acquisition or holding of any such certificate or interest therein was effected in violation of the conditions described in this section will indemnify and hold harmless the Depositor, the Trustee, the Servicer, any subservicer, and the Trust from and against any and all liabilities, claims, costs or expenses incurred by those parties as a result of that acquisition or holding.

Any fiduciary or other investor of Plan assets that proposes to acquire or hold the Offered Certificates on behalf of, or with Plan assets of, any Plan should consult with its counsel with respect to: (i) whether, with respect to the Offered Certificates, the specific and general conditions and the other requirements in the Underwriters’ Exemption or other enumerated class exemptions would be satisfied and (ii) the potential applicability of the general fiduciary responsibility provisions of ERISA and the prohibited transaction provisions of ERISA and Section 4975 of the Internal Revenue Code to the proposed investment. See “Considerations for Benefit Plan Investors” in the prospectus.

The sale of any of the Offered Certificates to a Plan is in no respect a representation by the Depositor or any Underwriter that an investment in the Offered Certificates meets all relevant legal requirements relating to investments by Plans generally or any particular Plan, or that an investment in the Offered Certificates is appropriate for Plans generally or any particular Plan.

LEGAL INVESTMENT CONSIDERATIONS

The Certificates will not constitute “mortgage related securities” for purposes of the Secondary Mortgage Market Enhancement Act of 1984 (“SMMEA”).

The Depositor makes no representations as to the proper characterization of any class of Class A or Mezzanine Certificates for legal investment or other purposes, or as to the ability of particular investors to purchase any class of Class A or Mezzanine Certificates under applicable legal investment restrictions. These uncertainties may adversely affect the liquidity of any class of Class A and Mezzanine Certificates. Accordingly, all institutions whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements or review by regulatory authorities should consult with their legal advisors in determining whether and to what extent any class of Class A or Mezzanine Certificates constitutes a legal investment or is subject to investment, capital or other restrictions. See “Legal Investment” in the prospectus.

METHOD OF DISTRIBUTION

Subject to the terms and conditions set forth in the underwriting agreement, dated October 19, 2006 (the “Underwriting Agreement”), among the Underwriters named below, the Originator and the Depositor, the Depositor has agreed to sell to the Underwriters, and each Underwriter has severally agreed to purchase from the Depositor, the principal amount of the Offered Certificates (the “Underwritten Certificates”) set forth opposite its respective name.

Underwriters	Original Certificate Principal Balance of the Class I-A-1 Certificates ($)		Original Certificate Principal Balance of the Class II-A-1 Certificates ($)		Original Certificate Principal Balance of the Class II-A-2 Certificates ($)		Original Certificate Principal Balance of the Class II-A-3 Certificates ($)		Original Certificate Principal Balance of the Class II-A-4 Certificates ($)		Original Certificate Principal Balance of the Class M-1 Certificates ($)		Original Certificate Principal Balance of the Class M-2 Certificates ($)
Greenwich Capital Markets, Inc.		215,107,600.00		111,301,600.00		65,370,800.00		48,672,800.00		24,347,200.00		30,600,000.00		29,400,000.00
Banc of America Securities LLC		215,107,600.00		111,301,600.00		65,370,800.00		48,672,800.00		24,347,200.00		30,600,000.00		29,400,000.00
Barclays Capital Inc.		26,950,950.00		13,912,700.00		8,171,350.00		6,084,100.00		3,043,400.00		3,825,000.00		3,675,000.00
HSBC Securities (USA) Inc.		26,950,950.00		13,912,700.00		8,171,350.00		6,084,100.00		3,043,400.00		3,825,000.00		3,675,000.00
J.P. Morgan Securities Inc.		26,950,950.00		13,912,700.00		8,171,350.00		6,084,100.00		3,043,400.00		3,825,000.00		3,675,000.00
Lehman Brothers Inc.		26,950,950.00		13,912,700.00		8,171,350.00		6,084,100.00		3,043,400.00		3,825,000.00		3,675,000.00
H&R Block Financial Advisors, Inc.		1,000,000.00		-		-		-		-		-		-

Underwriters	Original Certificate Principal Balance of the Class M-3 Certificates ($)		Original Certificate Principal Balance of the Class M-4 Certificates ($)			Original Certificate Principal Balance of the Class M-5 Certificates ($)		Original Certificate Principal Balance of the Class M-6 Certificates ($)		Original Certificate Principal Balance of the Class M-7 Certificates ($)		Original Certificate Principal Balance of the Class M-8 Certificates ($)		Original Certificate Principal Balance of the Class M-9 Certificates ($)
Greenwich Capital Markets, Inc.		10,200,000.00		10,800,000.00	9,900,000.00				7,200,000.00		7,500,000.00		4,800,000.00		6,900,000.00
Banc of America Securities LLC		10,200,000.00		10,800,000.00	9,900,000.00				7,200,000.00		7,500,000.00		4,800,000.00		6,900,000.00
Barclays Capital Inc.		1,275,000.00		1,350,000.00	1,237,500.00				900,000.00		937,500.00		600,000.00		862,500.00
HSBC Securities (USA) Inc.		1,275,000.00		1,350,000.00	1,237,500.00				900,000.00		937,500.00		600,000.00		862,500.00
J.P. Morgan Securities Inc.		1,275,000.00		1,350,000.00	1,237,500.00				900,000.00		937,500.00		600,000.00		862,500.00
Lehman Brothers Inc.		1,275,000.00		1,350,000.00	1,237,500.00				900,000.00		937,500.00		600,000.00		862,500.00
H&R Block Financial Advisors, Inc.		-	-				-		-		-		-		-

The Depositor has been advised by each Underwriter that it proposes initially to offer the Underwritten Certificates of each class purchased by it to the public in Europe and the United States at the offering price set forth herein and to certain dealers at such price less a selling concession, not in excess of the percentage set forth in the table below of the Certificate Principal Balance of the related class of Underwritten Certificates. The Underwriters may allow and such dealers may reallow a reallowance discount, not in excess of the percentage set forth in the table below of the Certificate Principal Balance of the related class of Underwritten Certificates, to certain other dealers. After the initial public offering, the public offering price, such concessions and such discounts may be changed.

Class of Certificates	Selling Concession	Reallowance Discount
Class I-A-1	0.1200%	0.0800%
Class II-A-1	0.1500%	0.1000%
Class II-A-2	0.1500%	0.1000%
Class II-A-3	0.1500%	0.1000%
Class II-A-4	0.1500%	0.1000%
Class M-1	0.1500%	0.1000%
Class M-2	0.1500%	0.1000%
Class M-3	0.1500%	0.1000%
Class M-4	0.1500%	0.1000%
Class M-5	0.1500%	0.1000%
Class M-6	0.1500%	0.1000%
Class M-7	0.1500%	0.1000%
Class M-8	0.1500%	0.1000%
Class M-9	0.1500%	0.1000%

Until the distribution of the Underwritten Certificates is completed, 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. Such 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 such 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 such transactions or that such transactions, once commenced, will not be discontinued without notice.

The Depositor has been advised by each Underwriter, other than H&R Block Financial Advisors Inc., that such Underwriter intends to make a market in the Underwritten Certificates purchased by it, but no Underwriter has any obligation to do so. There can be no assurance that a secondary market for any of the Underwritten Certificates will develop or, if it does develop, that it will continue. H&R Block Financial Advisors Inc. does not intend to make a secondary market in any class of the Offered Certificates.

The Depositor has agreed to indemnify the Underwriters against, or make contributions to the Underwriters with respect to, certain liabilities, including liabilities under the Act.

The Underwriters or their affiliates have ongoing banking relationships with affiliates of the Depositor and a portion of the proceeds received from the sale of the Offered Certificate will be used by the Depositor to satisfy obligations under financing facilities in place with affiliates of the Underwriters with respect to some of the Mortgage Loans.

LEGAL MATTERS

Certain legal matters with respect to the Class A and Mezzanine Certificates will be passed upon for the Seller, Servicer and the Depositor by Thacher Proffitt & Wood llp, New York, New York. Certain legal matters will be passed upon for the Underwriters by McKee Nelson LLP.

RATINGS

It is a condition to the issuance of the Certificates that the Offered Certificates receive the following ratings from Moody's Investor 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”):

Offered Certificates	Moody's	S&P
I-A-1	Aaa	AAA
II-A-1	Aaa	AAA
II-A-2	Aaa	AAA
II-A-3	Aaa	AAA
II-A-4	Aaa	AAA
M-1	Aa1	AA+
M-2	Aa2	AA
M-3	Aa3	AA-
M-4	A1	A+
M-5	A2	A
M-6	A3	A-
M-7	Baa1	BBB+
M-8	Baa1	BBB
M-9	Baa2	BBB-

A securities rating addresses the likelihood of the receipt by a Certificateholder of distributions on the Mortgage Loans. The rating takes into consideration the characteristics of the Mortgage Loans and the structural, legal and tax aspects associated with the certificates. The ratings on the Offered Certificates do not, however, constitute statements regarding the likelihood or frequency of prepayments on the Mortgage Loans, the payment of the Net WAC Rate Carryover Amount to the Offered Certificates or the possibility that a holder of an Offered Certificate might realize a lower than anticipated yield.

The Depositor has not engaged any rating agency other than the Rating Agencies to provide ratings on the Offered Certificates. However, there can be no assurance as to whether any other rating agency will rate the Offered Certificates, or, if it does, what rating would be assigned by any such other rating agency. Any rating on the Offered Certificates by another rating agency, if assigned at all, may be lower than the ratings assigned to the Offered Certificates by the Rating Agencies.

A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating organization. Each security rating should be evaluated independently of any other security rating. In the event that the ratings initially assigned to any of the Offered Certificates by the Rating Agencies are subsequently lowered for any reason, no person or entity is obligated to provide any additional support or credit enhancement with respect to such Offered Certificates.

INDEX OF DEFINED TERMS

Accrual Period:

Additional Group I Mortgage Loans

Additional Group II Mortgage Loans

Additional Mortgage Loans

Additional Termination Events

Adjustable-Rate Group I Mortgage Loans:

Adjustable-Rate Group II Mortgage Loans:

Adjustable-Rate Prepayment Vector

Adjusted Net Maximum Mortgage Rate

Adjusted Net Mortgage Rate:

Adjustment Date:

Advance:

Advances:

Advancing Person:

Allocated Realized Loss Amount:

Assumed Final Distribution Date:

Available Funds:

Book-Entry Certificates:

Certificate Index:

Certificate Margin:

Certificate Owners:

Certificate Principal Balance:

Certificateholder:

Certificates:

Class A Certificates:

Class A Principal Distribution Amount:

Class M-1/M-2/M-3 Principal Distribution Amount

Class M-10 Principal Distribution Amount

Class M-11 Principal Distribution Amount

Class M-4 Principal Distribution Amount

Class M-5 Principal Distribution Amount

Class M-6 Principal Distribution Amount

Class M-7 Principal Distribution Amount

Class M-8 Principal Distribution Amount

Class M-9 Principal Distribution Amount

Clearstream Participants:

Clearstream:

Closing Date Mortgage Loans

Code:

Collection Account:

Compensating Interest:

CPR

Cut-off Date Principal Balance:

Definitive Certificate:

Delayed First Adjustment Mortgage Loan:

Deleted Mortgage Loans:

Delinquent:

Depositor

Determination Date:

Distribution Account:

Distribution Date:

DTC Participants:

DTC:

Due Date:

Due Period:

Early Termination Date

Euroclear Operator:

Euroclear Participants:

Euroclear:

European Depositaries:

Events of Default

Extra Principal Distribution Amount:

Financial Intermediary:

Fixed-Rate Group I Mortgage Loans:

Fixed-Rate Group II Mortgage Loans:

Fixed-Rate Prepayment Vector

Formula Rate:

Global Securities:

Gross Losses

Gross Margin:

Group I Allocation Percentage:

Group I Basic Principal Distribution Amount:

Group I Interest Remittance Amount:

Group I Mortgage Loans

Group I Mortgage Loans:

Group I Overcollateralization Floor

Group I Principal Distribution Amount:

Group I Principal Remittance Amount

Group I Senior Principal Distribution Amount:

Group II Allocation Percentage

Group II Basic Principal Distribution Amount:

Group II Interest Remittance Amount:

Group II Mortgage Loans:

Group II Overcollateralization Floor

Group II Principal Distribution Amount:

Group II Principal Remittance Amount

Group II Senior Principal Distribution Amount:

H&R Block

High Cost Loans:

Homeownership Act:

Illegality

IML:

Index:

Initial Group I Mortgage Loans

Initial Group II Mortgage Loans

Initial Mortgage Loans

Initial Periodic Rate Cap:

Insurance Proceeds:

Interest Coverage Accounts

Interest Only Mortgage Loans:

Interest Only Period:

Interest Rate Swap Agreement

IRS:

Issuing Entity

LIBOR Business Day:

LIBOR Determination Date:

Liquidated Mortgage Loan:

Loan Group:

Maximum Cap

Maximum Mortgage Rate:

Mezzanine Certificates:

Minimum Mortgage Rate:

Monthly Interest Distributable Amount:

Moody's:

Mortgage Loan Purchase Agreement:

Mortgage Loan Schedule:

Mortgage Loans

Mortgage Pool:

Mortgage Rate:

Mortgage:

Mortgaged Property:

Net Liquidation Proceeds:

Net Losses

Net Monthly Excess Cashflow:

Net WAC Rate

Net WAC Rate Carryover Amount:

Net WAC Rate Carryover Reserve Account:

NIMS Insurer Default:

NIMS Insurer:

Notional Principal Contract Regulations:

Offered Certificates:

OID Regulations:

Option One

Optional Termination Date:

Original Certificate Principal Balance:

Originator

Overcollateralization Deficiency Amount:

Overcollateralization Floor

Overcollateralization Release Amount:

Overcollateralization Target Amount

Overcollateralized Amount

Pass-Through Rate:

Plan:

PMI Premium Rate

Pool Balance:

Pooling Agreement:

Prepayment Assumption

Prepayment Interest Shortfall:

Prepayment Period:

Principal Balance:

Principal Remittance Amount:

Purchase Price:

Qualified Substitute Mortgage Loan:

Realized Loss:

Record Date:

Recoveries

Reference Banks:

Related Documents:

Relevant Depositary:

REMIC:

Reserve Interest Rate:

Residual Certificates:

Rules:

S&P:

Senior Credit Enhancement Percentage

Servicing Advance:

Servicing Fee Rate:

Servicing Fee:

Six-Month LIBOR:

SMMEA:

Sponsor

Stepdown Date:

Strike Rate

Structuring Assumptions:

Subordinate Certificates:

Subsequent Group I Mortgage Loans

Subsequent Group II Mortgage Loans

Subsequent Mortgage Loans

Subsequent Periodic Rate Cap:

Subsequent Recoveries

Substitution Adjustment:

Supplemental Interest Trust

Supplemental Interest Trust Trustee

Swap Downgrade Provisions

Swap Event of Default

Swap Provider

Swap Provider Trigger Event

Swap Termination Event

Swap Termination Payment

Tax Event

Tax Event Upon Merger

Telerate Page 3750:

Termination Events

Termination Price:

Terms and Conditions:

Trigger Event:

Trust:

Trustee Fee Rate

U.S. Person:

Unpaid Interest Shortfall Amount:

ANNEX I

GLOBAL CLEARANCE, SETTLEMENT AND

TAX DOCUMENTATION PROCEDURES

Except in certain limited circumstances, the Offered Certificates will be offered globally (the “Global Securities”) and will be available only in book-entry form. Investors in the Global Securities may hold such Global Securities through DTC, or upon request through Clearstream or Euroclear. The Global Securities will be tradable as home market instruments in both the European and U.S. domestic markets. Initial settlement and all secondary trades will settle in same-day funds.

Secondary market trading between investors holding Global Securities through Clearstream and Euroclear will be conducted in the ordinary way in accordance with their normal rules and operating procedures and in accordance with conventional eurobond practice (i.e., seven calendar day settlement).

Secondary market trading between investors holding Global Securities through DTC will be conducted according to the rules and procedures applicable to U.S. corporate debt obligations.

Secondary cross-market trading between Clearstream or Euroclear and DTC Participants holding Certificates will be effected on a delivery-against-payment basis through the respective Depositaries of Clearstream and Euroclear (in such capacity) and as DTC Participants.

Non-U.S. holders (as described below) of Global Securities will be subject to U.S. withholding taxes unless such holders meet certain requirements and deliver appropriate U.S. tax documents to the securities clearing organizations or their participants.

Initial Settlement

All Global Securities will be held in book-entry form by DTC in the name of Cede & Co. as nominee of DTC. Investors’ interests in the Global Securities will be represented through financial institutions acting on their behalf as direct and indirect Participants in DTC. As a result, Clearstream and Euroclear will hold positions on behalf of their participants through their respective Depositaries, which in turn will hold such positions in accounts as DTC Participants.

Investors electing to hold their Global Securities through DTC will follow the settlement practices applicable to conventional eurobonds, except that there will be no temporary global security and no “lock-up” or restricted period. Investor securities custody accounts will be credited with their holdings against payment in same-day funds on the settlement date.

Investors electing to hold their Global Securities through Clearstream or Euroclear accounts will follow the settlement procedures applicable to conventional eurobonds, except that there will be no temporary global security and no ‘lock-up’ or restricted period. Global Securities will be credited to the securities custody accounts on the settlement date against payment in same-day funds.

Secondary Market Trading

Since the purchaser determines the place of delivery, it is important to establish at the time of the trade where both the purchaser’s and seller’s accounts are located to ensure that settlement can be made on the desired value date.

Trading between DTC Participants. Secondary market trading between DTC Participants will be settled using the procedures applicable to prior mortgage loan asset-backed certificates issues in same-day funds.

Trading between Clearstream and/or Euroclear Participants. Secondary market trading between Clearstream Participants or Euroclear Participants will be settled using the procedures applicable to conventional eurobonds in same-day funds.

Trading between DTC seller and Clearstream or Euroclear purchaser. When Global Securities are to be transferred from the account of a DTC Participant to the account of a Clearstream Participant or a Euroclear Participant, the purchaser will send instructions to Clearstream or Euroclear through a Clearstream Participant or Euroclear Participant at least one business day prior to settlement. Clearstream or Euroclear will instruct the respective Depositary, as the case may be, to receive the Global Securities against payment. Payment will include interest accrued on the Global Securities from and including the last coupon payment date to and excluding the settlement date, on the basis of the actual number of days in such accrual period and a year assumed to consist of 360 days. For transactions settling on the 31st of the month, payment will include interest accrued to and excluding the first day of the following month. Payment will then be made by the respective Depositary of the DTC Participant’s account against delivery of the Global Securities. After settlement has been completed, the Global Securities will be credited to the respective clearing system and by the clearing system, in accordance with its usual procedures, to the Clearstream Participant’s or Euroclear Participant’s account. The securities credit will appear the next day (European time) and the cash debt will be back-valued to, and the interest on the Global Securities will accrue from, the value date (which would be the preceding day when settlement occurred in New York). If settlement is not completed on the intended value date (i.e., the trade fails), the Clearstream or Euroclear cash debt will be valued instead as of the actual settlement date.

Clearstream Participants and Euroclear Participants will need to make available to the respective clearing systems the funds necessary to process same-day funds settlement. The most direct means of doing so is to preposition funds for settlement, either from cash on hand or existing lines of credit, as they would for any settlement occurring within Clearstream or Euroclear. Under this approach, they may take on credit exposure to Clearstream or Euroclear until the Global Securities are credited to their accounts one day later.

As an alternative, if Clearstream or Euroclear has extended a line of credit to them, Clearstream Participants or Euroclear Participants can elect not to preposition funds and allow that credit line to be drawn upon the finance settlement. Under this procedure, Clearstream Participants or Euroclear Participants purchasing Global Securities would incur overdraft charges for one day, assuming they cleared the overdraft when the Global Securities were credited to their accounts. However, interest on the Global Securities would accrue from the value date. Therefore, in many cases the investment income on the Global Securities earned during that one-day period may substantially reduce or offset the amount of such overdraft charges, although this result will depend on each Clearstream Participant’s or Euroclear Participant’s particular cost of funds.

Since the settlement is taking place during New York business hours, DTC Participants can employ their usual procedures for sending Global Securities to the respective European Depositary for the benefit of Clearstream Participants or Euroclear Participants. The sale proceeds will be available to the DTC seller on the settlement date. Thus, to the DTC Participants a cross-market transaction will settle no differently than a trade between two DTC Participants.

Trading between Clearstream or Euroclear Seller and DTC Purchaser. Due to time zone differences in their favor, Clearstream Participants and Euroclear Participants may employ their customary procedures for transactions in which Global Securities are to be transferred by the respective clearing system, through the respective Depositary, to a DTC Participant. The seller will send instructions to Clearstream or Euroclear through a Clearstream Participant or Euroclear Participant at least one business day prior to settlement. In these cases Clearstream or Euroclear will instruct the respective Depositary, as appropriate, to deliver the Global Securities to the DTC Participant’s account against payment. Payment will include interest accrued on the Global Securities from and including the last coupon payment to and excluding the settlement date on the basis of the actual number of days in such accrual period and a year assumed to consist of 360 days. For transactions settling on the 31st of the month, payment will include interest accrued to and excluding the first day of the following month. The payment will then be reflected in the account of the Clearstream Participant or Euroclear Participant the following day, and receipt of the cash proceeds in the Clearstream Participant’s or Euroclear Participant’s account would be back-valued to the value date (which would be the preceding day, when settlement occurred in New York). Should the Clearstream Participant or Euroclear Participant have a line of credit with its respective clearing system and elect to be in debt in anticipation of receipt of the sale proceeds in its account, the back-valuation will extinguish any overdraft incurred over that one-day period. If settlement is not completed on the intended value date (i.e., the trade fails), receipt of the cash proceeds in the Clearstream Participant’s or Euroclear Participant’s account would instead be valued as of the actual settlement date.

Finally, day traders that use Clearstream or Euroclear and that purchase Global Securities from DTC Participants for delivery to Clearstream Participants or Euroclear Participants should note that these trades would automatically fail on the sale side unless affirmative action were taken. At least three techniques should be readily available to eliminate this potential problem

(a) borrowing through Clearstream or Euroclear for one day (until the purchase side of the day trade is reflected in their Clearstream or Euroclear accounts) in accordance with the clearing system’s customary procedures;

(b) borrowing the Global Securities in the U.S. from a DTC Participant no later than one day prior to settlement, which would give the Global Securities sufficient time to be reflected in their Clearstream or Euroclear account in order to settle the sale side of the trade; or

(c) staggering the value dates for the buy and sell sides of the trade so that the value date for the purchase from the DTC Participant is at least one day prior to the value date for the sale to the Clearstream Participant or Euroclear Participant.

Certain U.S. Federal Income Tax Documentation Requirements

A beneficial owner of Global Securities holding securities through Clearstream or Euroclear (or through DTC if the holder has an address outside the U.S.) will be subject to the 30% U.S. withholding tax that generally applies to payments of interest (including original issue discount) on registered debt issued by U.S. Persons, unless (i) each clearing system, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business in the chain of intermediaries between such beneficial owner and the U.S. entity required to withhold tax complies with applicable certification requirements and (ii) such beneficial owner takes one of the following steps to obtain an exemption or reduced tax rate

Exemption for non-U.S. Persons (Form W-8BEN). 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 Owner for United States Tax Withholding). If the information shown on Form W-8BEN changes, a new Form W-8BEN must be filed within 30 days of such change.

Exemption for non-U.S. Persons with effectively connected income (Form W-8ECI). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S. branch, for which the interest income is effectively connected with its conduct of a trade or business in the United States, can obtain an exemption from the withholding tax by filing Form W-8ECI (Certificate of Foreign Person’s Claim for Exemption from Withholding on Income Effectively Connected with the Conduct of a Trade or Business in the United States).

Exemption or reduced rate for non-U.S. Persons resident in treaty countries (Form W-8BEN). Non-U.S. Persons that are Certificate Owners residing in a country that has a tax treaty with the United States can obtain an exemption or reduced tax rate (depending on the treaty terms) by filing Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding). Form W-8BEN may be filed by the Certificate Owners or his agent.

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). Form W-8BEN and Form W-8ECI are effective until the third succeeding calendar year from the date such form is signed.

The term “U.S. Person” means (i) a citizen or resident of the United States, (ii) a corporation, partnership or other entity treated as a corporation or partnership for United States federal income tax purposes organized in or under the laws of the United States or any state thereof or the District of Columbia (unless, in the case of a partnership, Treasury regulations provide otherwise) or (iii) an estate the income of which is includible in gross income for United States tax purposes, regardless of its source, or (iv) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have authority to control all substantial decisions of the trust. Notwithstanding the preceding sentence, to the extent provided in Treasury regulations, certain trusts in existence on August 20, 1996, and treated as United States persons prior to such date, that elect to continue to be treated as United States persons will also be a U.S. Person. This summary does not deal with all aspects of U.S. Federal income tax withholding that may be relevant to foreign holders of the Global Securities. Investors are advised to consult their own tax advisors for specific tax advice concerning their holding and disposing of the Global Securities.

ANNEX II

ASSUMED MORTGAGE LOAN CHARACTERISTICS

Group	Aggregate Principal Balance ($)	Gross Mortgage Rate (%)	Original Term to Maturity (mos.)	Remaining Term to Maturity (mos.)	Original Amortization Term (mos.)	Gross Margin (%)	Maximum Mortgage Rate (%)	Minimum Mortgage Rate (%)	Months until Mortgage Rate Rest	Initial Periodic Rate Cap (%)	Periodic Rate Cap (%)	Original Interest Only Term (mos.)
Initial Group I Fixed-Rate Mortgage Loans
1	18,454.61	12.00000	180	175	180	N/A	N/A	N/A	N/A	N/A	N/A	0
1	52,599.28	10.36200	240	237	240	N/A	N/A	N/A	N/A	N/A	N/A	0
1	32,691.06	12.90000	240	237	240	N/A	N/A	N/A	N/A	N/A	N/A	0
1	74,726.46	12.75000	360	356	360	N/A	N/A	N/A	N/A	N/A	N/A	0
1	40,890.98	12.90000	360	357	360	N/A	N/A	N/A	N/A	N/A	N/A	0
1	658,433.02	11.48993	360	357	360	N/A	N/A	N/A	N/A	N/A	N/A	0
1	18,694.43	11.82500	360	359	360	N/A	N/A	N/A	N/A	N/A	N/A	0
1	4,218,921.75	10.56329	360	357	360	N/A	N/A	N/A	N/A	N/A	N/A	0
1	22,855.44	11.55000	240	239	240	N/A	N/A	N/A	N/A	N/A	N/A	0
1	31,493.87	11.30000	360	358	360	N/A	N/A	N/A	N/A	N/A	N/A	0
1	273,611.49	11.04223	360	357	360	N/A	N/A	N/A	N/A	N/A	N/A	0
1	71,655.97	10.84501	360	358	360	N/A	N/A	N/A	N/A	N/A	N/A	0
1	88,559.08	11.40171	360	358	360	N/A	N/A	N/A	N/A	N/A	N/A	0
Initial Group II Fixed-Rate Mortgage Loans
2	41,260.82	13.80000	240	237	240	N/A	N/A	N/A	N/A	N/A	N/A	0
2	55,926.38	12.16762	240	237	240	N/A	N/A	N/A	N/A	N/A	N/A	0
2	735,831.61	13.13998	360	357	360	N/A	N/A	N/A	N/A	N/A	N/A	0
2	162,137.19	13.90664	360	356	360	N/A	N/A	N/A	N/A	N/A	N/A	0
2	11,246,652.31	13.49459	360	357	360	N/A	N/A	N/A	N/A	N/A	N/A	0
2	50,117.75	13.92762	360	357	360	N/A	N/A	N/A	N/A	N/A	N/A	0
2	1,008,808.20	13.69763	360	357	360	N/A	N/A	N/A	N/A	N/A	N/A	0
2	20,878,312.47	12.39501	360	357	360	N/A	N/A	N/A	N/A	N/A	N/A	0
2	153,609.42	10.87500	360	357	360	N/A	N/A	N/A	N/A	N/A	N/A	0
2	1,624,499.98	11.28702	360	357