S-3/A

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 2, 2012 REGISTRATION NOS. 333-179292 and 333-179292-01

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

AMENDMENT NO. 1 to

FORM S-3

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

SEQUOIA MORTGAGE FUNDING CORPORATION	SEQUOIA RESIDENTIAL FUNDING, INC.
(EXACT NAME OF CO-REGISTRANT AS SPECIFIED IN ITS	(EXACT NAME OF CO-REGISTRANT AS SPECIFIED IN ITS
CHARTER)	CHARTER)

DELAWARE	91-1771827	DELAWARE	35-2170972
(STATE OF INCORPORATION)	(I.R.S. EMPLOYER	(STATE OF INCORPORATION)	(I.R.S. EMPLOYER
	IDENTIFICATION NUMBER)		IDENTIFICATION NUMBER)

ONE BELVEDERE PLACE

MILL VALLEY, CALIFORNIA 94941

(415) 389-7373

(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF

CO-REGISTRANT’S PRINCIPAL EXECUTIVE OFFICES)

JOHN H. ISBRANDTSEN

ONE BELVEDERE PLACE, SUITE 300

MILL VALLEY, CALIFORNIA 94941

(415) 389-7373

(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE OF

AGENT FOR SERVICE)

COPIES TO:

PHILLIP R. POLLOCK, ESQ.

WEINTRAUB GENSHLEA CHEDIAK TOBIN & TOBIN LAW CORPORATION

475 SANSOME STREET, SUITE 1800

SAN FRANCISCO, CALIFORNIA 94111

(415) 433-1400

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:

From time to time after the effective date of this Registration Statement as determined by market conditions.

If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ¨

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: R

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon the filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

¨	Large accelerated filer	¨	Accelerated filer
x	Non-accelerated filer (Do not check if a smaller reporting company)	¨	Smaller reporting company

CALCULATION OF REGISTRATION FEE

TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED	AMOUNT TO BE REGISTERED		PROPOSED MAXIMUM AGGREGATE PRICE PER UNIT			PROPOSED MAXIMUM AGGREGATE OFFERING PRICE		AMOUNT OF REGISTRATION FEE(1)(2)
Asset Backed Securities	$	5,000,000		100	%	$	5,000,000	$	573

(1) Calculated pursuant to Rule 457(o) under the Securities act of 1933.

(2) Previously paid.

________________

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

EXPLANATORY NOTE

This Registration Statement includes (i) an illustrative form of prospectus supplement for use in an offering of Collateralized Mortgage-Backed or Asset-Backed Bonds which are treated as debt instruments for tax purposes collateralized primarily by a pool of mortgage loans, with various forms of credit enhancement provided (“Version 1”), (ii) an illustrative form of prospectus supplement for use in an offering of Mortgage Pass-Through or Asset-Backed Certificates representing interests in a REMIC consisting primarily of a pool of mortgage loans, with various forms of credit enhancement provided (“Version 2”) and (iii) a base prospectus.

Version 1

The information in this prospectus supplement is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus supplement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, [____________], 201[_]

Prospectus Supplement

(To Prospectus dated [______________], 201[_])

$[_______] (Approximate)

[LOGO] Sequoia Mortgage Trust

[Collateralized-] [Mortgage-] [Asset-] Backed Bonds

[LOGO] RWT Holdings, Inc. [Sponsor and Seller]

[LOGO] Redwood Residential Acquisition Corporation [Seller]

[LOGO] [Depositor]

[LOGO] [Issuing Entity]

  Consider carefully the risk factors beginning on page S-[__] of this prospectus supplement and on page [__] of the prospectus.   For a list of capitalized terms used in this prospectus supplement, see the index of defined terms on page [__] of the prospectus.   The bonds are redeemable only under circumstances described in this prospectus supplement.   The bonds represent obligations of the issuing entity only and do not represent an interest in or obligation of the trustee, the depositor or any of their affiliates.   This prospectus supplement may be used to offer and sell bonds only if accompanied by the prospectus. The Issuing Entity will issue:   ·     [___] class(es) of Senior Class [___] Bonds; and ·     [___] class(es) of Subordinated Class [___] Bonds.   The Bonds:   ·      Will be collateralized by primarily year [fixed adjustable] rate, mortgage loans secured by first liens on one- to four-family residential properties; ·      The classes of bonds offered by this prospectus supplement are listed, together with their initial class principal amounts and interest rates, under “Summary of Terms—The Offered Bonds” on page S-[__] of this prospectus supplement. This prospectus supplement and the accompanying prospectus relate only to the offering of bonds listed in the table on page S-[__] and not to the ownership certificate that will be issued by the issuing entity as described in this prospectus supplement; ·      Pay all holders of bonds the amounts of principal and interest due thereon on the [_____] day of each month, or if such day is not a business day, the next succeeding business day, commencing on [_________], 201[_]; and ·      Will have various forms of credit enhancement of the types described in this prospectus supplement, including [excess interest,] [overcollateralization,] [subordination,] [a bond insurance policy,] [and] [interest rate swap agreements]. [Forms of credit enhancement to be described as applicable.]

[The senior bonds will be unconditionally and irrevocably guaranteed as to payment of insured payments, as defined in this prospectus supplement, pursuant to the terms of the financial guaranty insurance policy to be issued:

[INSURER] [LOGO]]

On or about [______________], delivery of the bonds offered by this prospectus supplement will be made through the book-entry facilities of the Depository Trust Company, Clearstream Banking Luxembourg and the Euroclear System.

The bonds offered by this prospectus supplement will be purchased by the underwriter(s) from the issuing entity, and are being offered by the underwriter(s) from time to time for sale to the public in negotiated transactions or otherwise at varying prices determined at the time of sale. The underwriter(s) have the right to reject any order. Proceeds to the issuing entity from the sale of these bonds will be approximately [__]% of their initial total class principal amount before deducting expenses.

[UNDERWRITER(S)] [LOGO]

Bonds of each series will be characterized for federal income tax purposes as debt instruments.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus supplement or the accompanying prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

Important Notice About Information Presented in this Prospectus Supplement
and the Accompanying Prospectus

We provide information to you about the bonds offered by this prospectus supplement in two separate documents that progressively provide more detail: (1) the accompanying prospectus, which provides general information, some of which may not apply to your bonds and (2) this prospectus supplement, which describes the specific terms of your bonds.

The information presented in this prospectus supplement is intended to enhance the general terms of the accompanying prospectus.

We include cross-references in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find further related discussions. The following table of contents and the table of contents included in the accompanying prospectus provide the pages on which these captions are located.

Dealers will deliver a prospectus supplement and prospectus when acting as underwriters of the bonds and with respect to their unsold allotments and subscriptions. In addition, all dealers selling the bonds will be required to deliver a prospectus supplement and prospectus for ninety days following the date of this prospectus supplement

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

For European Investors Only

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), the underwriter has represented and agreed that with respect 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 bonds to the public in that Relevant Member State prior to the publication of a prospectus in relation to the bonds 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 bonds 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;

S-i

(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 issuing entity of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of bonds to the public” in relation to any bonds 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 bonds to be offered so as to enable an investor to decide to purchase or subscribe the bonds, 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.

S-ii

TABLE OF CONTENTS

	Page No.
THE OFFERED BONDS	1
SUMMARY OF TERMS	2
Sponsor	2
Seller	2
Depositor	2
Issuing Entity	2
Bond Trustee	2
Owner Trustee	2
Issuing Entity Administrator	3
Master Servicer	3
Servicer	3
Originator	3
Custodian	3
Cut-Off Date	3
Closing Date	3
The Bonds	3
Payments of Interest	4
Payments of Principal	4
Priority of Payments	4
Limited Recourse	5
Credit Enhancement	5
Maturity Date	6
Fees and Expenses	6
The Mortgage Loans	6
[Pre-funding Feature	7
Mortgage Loan Representations and Warranties	8
Mortgage Loan Servicing	8
Optional Redemption of the Bonds	8
Acceleration of Maturity at Events of Default	8
Tax Status	8
ERISA Considerations	9
Legal Investment	9
Bond Rating	9
RISK FACTORS	10
The Current Turbulence in the Financial Markets and Economy May Adversely Affect the Performance and Market Value of Your Securities and These Conditions May Not Improve in the Near Future	10
Downgrade of Long-term Ratings of Eurozone Nations May Adversely Affect the Market Value of the Securities	10
Recent Trends in the Residential Mortgage Market May Adversely Affect the Performance and Market Value of Your Securities	11
Financial Regulatory Legislative Reform and Related Regulations Could Have a Significant Impact	12
Potential Changes in Ratings Present Risks	13
Pre-offering Review of the Mortgage Loans Underlying the Securities May Not Reveal Aspects of the Mortgage Loans Which Could Lead to Losses	13
[Risks Related to Mortgage Loans with Interest-Only Payments	14
[Special Default Risk of Second Lien Mortgage Loans	14
[Risks Related to Simultaneous Second Liens and Other Borrower Debt	14
Geographic Concentration of Mortgage Loans	14
Mortgage Loan Interest Rates May Limit Interest Rates on the Bonds	15
Potential Inadequacy of Credit Enhancement	15
Unpredictability and Effect of Prepayments	17
Delay in Receipt of Liquidation Proceeds; Liquidation Proceeds May Be Less Than Mortgage Balance	18
Risks Associated With New Laws Relating to Mortgage Loan Servicing	18

S-iii

Violation of Various Federal, State and Local Laws May Result in Losses on the Mortgage Loans	18
Mortgage Loan Modification Programs and Future Legislative Action May Adversely Affect the Performance and Market Value of Your Securities	19
Special Assessments and Energy Efficiency Liens May Take Priority Over the Mortgage Lien	19
Helping Families Save Their Homes Act	20
Risks Associated With Potential New Laws Relating to Mortgage Loan Origination or Ownership	20
Predatory Lending Laws/High Cost Loans	20
Bankruptcy or Insolvency Proceedings Could Delay or Reduce Payments on the Bonds	21
[Issuing Entity Could Become a Taxable Entity	21
DESCRIPTION OF THE MORTGAGE POOL	21
General	22
[Insert Description of any Loan Exceptions]
[The Fixed Rate Mortgage Loans	22
[Adjustable Mortgage Rates	23
[The Indices	23
[Primary Mortgage Insurance	23
Certain Characteristics of the Mortgage Loans	24
[Delinquency and Loss Information for the Pool Assets	24
[Conveyance of Subsequent Mortgage Loans	24
STATIC POOL INFORMATION	26
ADDITIONAL INFORMATION	26
THE ISSUING ENTITY	27
General	27
The Owner Trustee	27
The Ownership Certificate	27
DESCRIPTION OF THE BONDS	28
General	28
Book-Entry Bonds	28
Payments on Mortgage Loans; Accounts	29
Payments	29
Interest	30
Principal	31
Priority of Payments and Allocation of Shortfalls	32
Stated Maturity	33
Structuring Assumptions	33
Optional Purchase of Defaulted Loans	34
Weighted Average Lives of the Bonds	34
Decrement Tables	35
PERCENT OF INITIAL CLASS PRINCIPAL AMOUNTS OUTSTANDING	35
Redemption at the Option of the Residual Holder	35
Acceleration of Maturity at Events of Default under the Indenture	35
Controlling Class Under the Indenture	37
Credit Enhancement	37
Subordination	37
The Bond Insurance Policy	37
The Insurer	37
The Issuing Entity Administrator	37
The Bond Trustee	38
The Issuing Entity	38
The Custodian	38
FEES AND EXPENSES OF THE ISSUING ENTITY	40
MATERIAL LEGAL PROCEEDINGS	41
THE SPONSOR AND THE SELLER	43
THE DEPOSITOR	44
AFFILIATIONS AND RELATED TRANSACTIONS	44

S-iv

THE ORIGINATOR(S)	44
THE MASTER SERVICER AND THE SERVICER	45
Master Servicer	45
Servicer	45
Delinquency and Foreclosure Experience.	45
ADMINISTRATION OF THE ISSUING ENTITY	47
Servicing and Administrative Responsibilities	47
Issuing Entity Accounts	50
Example of Payments	51
THE AGREEMENTS	52
General	52
Assignment of the Mortgage Loans	52
Mortgage Loan Servicing	53
Administration	56
Reports to Bondholders	57
Voting Rights	57
Termination of the Issuing Entity	57
YIELD, PREPAYMENT AND WEIGHTED AVERAGE LIFE	57
General	57
Overcollateralization	60
Subordination of the Subordinate Bonds	60
Weighted Average Life	60
USE OF PROCEEDS	63
MATERIAL FEDERAL INCOME TAX CONSEQUENCES	63
Tax Classification of the Issuing Entity and of the Bonds	63
Tax Consequences to Holders of the Bonds	63
ERISA MATTERS	64
General	64
Purchases of the Offered Bonds	64
METHOD OF DISTRIBUTION	65
LEGAL MATTERS	65
RATINGS	65
INDEX OF DEFINED TERMS	I-1
ANNEX A – CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS	A-1
ANNEX B–GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES	B-1

S-v

THE OFFERED BONDS

The bonds consist of the classes of bonds listed in the table below, together with the Class [___], Class [__], and Class [__]. Only the classes of bonds listed in the tables below are offered by this prospectus supplement.

Class Initial Class Principal Amount⁽¹⁾ Initial Interest Rate⁽²⁾ Interest Rate Formula Principal Type Interest Type

(1)	These balances are approximate and are subject to an increase or decrease of up to 5%, as described in this prospectus supplement.
(2)	Reflects the interest rate as of the closing date.
(3)	An annual rate equal to the weighted average of the net mortgage rates of the mortgage loans during the applicable period, as described in this Prospectus Supplement.
(4)	The designation “N/R” means that the specified rating agency will not rate the bonds of that class.

The offered bonds will also have the following characteristics:

Class Record Date⁽¹⁾ Delay/Accrual Period⁽²⁾ Interest Accrual Convention Final Scheduled Payment Date⁽³⁾ Expected Final Payment Date⁽⁴⁾ Minimum Denomination or Percentage Interest⁽⁵⁾ Incremental Denomination CUSIP Number

S-1

SUMMARY OF TERMS

· This summary highlights selected information from this prospectus supplement 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 offering of the bonds, you should carefully read this entire prospectus supplement and the accompanying prospectus.

· While the summary contains an overview of certain calculations, cash flow priorities and other information to aid your understanding, you should read carefully the full description of these calculations, cash flow priorities and other information in this prospectus supplement and the accompanying prospectus before making any investment decision.

· Whenever we refer to a percentage of some or all of the mortgage loans in the trust fund, that percentage has been calculated on the basis of the total stated principal balance of those mortgage loans as of [_______, ____] unless we specify otherwise.  We explain in this prospectus supplement how the stated principal balance of a mortgage loan is determined.  Whenever we refer in this Summary of Terms or in the Risk Factors section to the total stated principal balance of any mortgage loans, we mean the total of their stated principal balances determined by that method, unless we specify otherwise.

Sponsor

[RWT Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of Redwood Trust, Inc. (“Redwood Trust”) (the “Sponsor”)]

Seller

[RWT Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of Redwood Trust, Inc.] or [Redwood Residential Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of RWT Holdings, Inc.], has previously acquired the mortgage loans, directly or indirectly from the originators. On the closing date, [_______________________], as seller (the “Seller”), will sell all of its interest in the mortgage loans to the depositor.

Depositor

[Sequoia Mortgage Funding Corporation] [or] [Sequoia Residential Funding, Inc.], a Delaware special purpose corporation and indirect wholly-owned subsidiary of Redwood Trust, Inc. (the “Depositor”). On the closing date, [Sequoia Mortgage Funding Corporation] [or] Sequoia Residential Funding, Inc.] will assign all of its interest in the mortgage loans to the issuing entity. The depositor’s address is One Belvedere Place, Suite [320] [or] [330], Mill Valley, California 94941, and its telephone number is (415) 389-7373.

Issuing Entity

[Sequoia Mortgage Loan Trust [______________]], [a statutory trust established under the laws of the State of Delaware] [or] [a common law trust formed under the laws of the State of New York] (the “Issuing Entity”).

Bond Trustee

[_______________________], a banking corporation organized under the laws of [_____________] (the “Bond Trustee”).

Owner Trustee

[_______________________], a banking corporation organized under the laws of the state of Delaware (the “Owner Trustee”).

S-2

Issuing Entity Administrator

[_______________________] (the “Issuing Entity Administrator”), will perform certain administrative duties with respect to the bonds, on behalf of the bond trustee including acting as authentication agent, calculation agent, paying agent, bond registrar and the party responsible for preparing distribution statements and tax information for bondholders and preparing tax filings for the issuing entity.

Master Servicer

[_______________________] (the “Master Servicer”) will act as master servicer for the mortgage loans.

Servicer

[_______________________] (the “Servicer”) will be servicer of the mortgage loans. [All Servicers that service 10% or more of the pool assets will be identified.]

Originator

[_______________________] (the “Originator”) originated the mortgage loans, directly or through its correspondents. [All Originators of 10% or more of the pool assets will be identified.]

Custodian

[_______________________] (the “Custodian”) will maintain custody of the mortgage files relating to the mortgage loans, on behalf of the issuing entity.

Cut-Off Date

[____________, 200__] (the “Cut-Off Date”).

Closing Date

On or about [___________, 200__] (the “Closing Date”).

The Bonds

The classes of Sequoia Mortgage Trust [_______] Bonds, Series [_____], issued with the initial approximate characteristics set forth under “The Offered Bonds” in the table on page S-1.

The Offered Bonds [other than _______] will be issued in book-entry form, and will be issued in minimum denominations in principal amount of $[________] and integral multiples of $[_______] in excess thereof.

The bonds will represent obligations of the issuing entity and will be secured by collateral consisting of [describe assets of the issuing entity].

The issuing entity will also issue an ownership certificate which will not be entitled to monthly payments of principal and interest, but rather solely to any excess cashflow remaining after all payments on the bonds and certain other fees and expenses of the issuing entity have been made on the related payment date.

The ownership certificate and the Class [_______] Bonds are not offered by this prospectus supplement. The Offered Bonds will have an approximate total initial principal amount of $[_______]. Any difference between the total principal amount of the Offered Bonds on the date they are issued and the approximate total principal amount of the Offered Bonds as reflected in this prospectus supplement will not exceed [________]%.

Principal and interest on the bonds will be paid on the [25]th day of each month, beginning in [_______]. However, if the [25]th day is not a business day, payments will be made on the next business day after the [25]th day of the month.

S-3

The rights of holders of the Class [____] Bonds to receive payments of principal and interest will be subordinate to the rights of the holders of bonds having a higher priority of payment, as described in “—Enhancement of Likelihood of Payment on the Bonds—Subordination of Payments” below. We refer to the Class [____] Bonds as “subordinate” bonds, and we refer to the Class [____] Bonds as “senior” bonds.

Payments of Interest

On each payment date, to the extent of available funds, each class of bonds will, subject to the limitations described herein, be entitled to receive accrued and unpaid interest determined on the basis of the outstanding class principal amount of such class immediately prior to such payment date, the applicable bond interest rate and the related accrual period.

Interest will accrue on each class of bonds at the applicable annual rates described as follows: [the least of (1) the applicable annual rate as described in the table on page S-[__], (2) [___]% annually and (3) the available funds rate].

[If the option to purchase the mortgage loans is not exercised by the holder of the ownership certificate on the first payment date following the month in which the total principal balance of the mortgage loans declines to less than [_____]% of their initial total principal balance as described under “—Optional Purchase of the Mortgage Loans” below, then with respect to the next payment date and each payment date thereafter, the interest rate calculation described in the paragraph above will be increased for each class of bonds, by substituting in clause (1) the applicable annual rate as described in the table on page S-[_____], subject in each case to the limitations described above.] [To be provided as applicable.]

[We refer you to “—Optional Purchase of the Mortgage Loans” below.]

The available funds rate is a limitation generally based on the amount of interest collections received from the mortgage loans during the applicable collection period, net of certain fees and expenses of the issuing entity.

For a complete description of the available funds rate and the priority of payment of interest, see “Description of the Bonds—Payments of Interest” in this prospectus supplement.

Payments of Principal

The amount of principal payable on each class of bonds will be determined by (1) funds received on the mortgage loans that are available to make payments of principal on the bonds, (2) formulas that allocate portions of principal payments received on the mortgage loans among different classes of bonds and (3) the application of excess interest to pay principal on the bonds, as described in this prospectus supplement.

Funds received on the mortgage loans may consist of monthly scheduled payments as well as unscheduled payments resulting from prepayments by borrowers, liquidation of defaulted mortgage loans, or purchases of mortgage loans under the circumstances described in this prospectus supplement.

The manner of allocating payments of principal on the mortgage loans will differ, as described in this prospectus supplement, [depending upon whether a payment date occurs before the stepdown date described in this prospectus supplement or on or after that date, and] depending upon whether the delinquency and loss performance of the mortgage loans is worse than certain levels set by the rating agencies.

We refer you to “Description of the Bonds—Payments of Principal” in this prospectus supplement.

Priority of Payments

On each payment date, available funds in respect of the mortgage loans will be distributed in the following order of priority: [Description of flow of funds, payment priorities and allocations to be provided for each series of bonds.] [To the extent helpful to the understanding of the securities, a graphic illustration of the flow of funds, payment priorities and allocations will be included.]

Any realized losses on the mortgage loans not covered by any credit enhancement feature will be allocated first to the Investor Certificate, second to the subordinated bonds and third, in the event the insurer defaults on its obligations under the bond insurance policy, to the senior bonds.

S-4

We refer you to “Description of the Bonds — Priority of Payments and Allocation of Shortfalls” in this prospectus supplement for more information.

Limited Recourse

The only source of cash available to make interest and principal payments on the bonds will be the assets of the issuing entity pledged to secure the bonds. The issuing entity will have no source of cash other than collections and recoveries on the mortgage loans through insurance or otherwise [and any payments received under the interest rate [cap] [swap] agreement[s] described below]. No other entity will be required or expected to make any payments on the bonds.

Credit Enhancement

The payment structure of this securitization includes excess interest, overcollateralization, subordination [as well as a bond insurance policy] [and interest rate swap agreements] to enhance the likelihood that holders of more senior classes of bonds will receive regular payments of interest and principal.

The Class [______] Bonds are more likely to experience losses than the Class [______] Bonds and the senior bonds; the Class [______] Bonds are more likely to experience losses than the senior bonds.

Excess Interest. The mortgage loans owned by the issuing entity will bear interest each month that, in the aggregate, is expected to exceed the amount needed to pay monthly interest on the bonds and certain fees and expenses of the issuing entity. This “excess interest” received from the mortgage loans each month will be available to absorb realized losses on the mortgage loans and to achieve and maintain overcollateralization at the required levels.

Overcollateralization. On the closing date, the total principal balance of the mortgage loans is expected to approximately equal the total principal amount of the bonds. Thereafter, to the extent described in this prospectus supplement, commencing with the first payment date, any interest received on the mortgage loans in excess of the amount needed to pay interest on the bonds and certain fees and expenses of the issuing entity (referred to in this prospectus supplement as “excess interest”) will be used to reduce the total principal amount of the bonds until the total principal balance of the mortgage loans exceeds the total principal amount of the bonds by an amount set by the rating agencies. We call this condition “overcollateralization.” We cannot, however, assure you that sufficient excess interest will be generated by the mortgage loans in the mortgage pool to achieve and maintain the required level of overcollateralization set by the rating agencies.

Subordination. The subordinated bonds and the investor certificate will provide credit enhancement for the senior bonds. The investor certificate will provide credit enhancement for the subordinated bonds.

The rights of holders of the subordinated bonds and the investor certificate to receive payments with respect to the mortgage loans will be subordinated to such rights of the holders of the senior bonds, and the rights of the holder of the investor certificate will be further subordinated to such rights as the holders of the subordinated bonds.

Bond Insurance Policy. [___________] will issue a financial guaranty insurance policy pursuant to which it will irrevocably and unconditionally guarantee payment of the insured payment if the bond trustee determines that available funds for a payment date are less than the senior bond interest payment amount and the senior bond principal payment amount. The insurer’s claims paying ability is rated [________] by [_______________].

Interest Rate Swap Agreements. On or before the closing date, the issuing entity will enter into [____] interest rate [cap] [swap] agreements[s] with [___], as [cap] [swap] counterparty. [On each payment date, the issuing entity will be obligated to make fixed payments under each interest rate swap agreement at a rate of [____]% (for [___]-year hybrid mortgage loans), [___] (for [___]-year hybrid mortgage loans) and [____]% (for [___]-year hybrid mortgage loans), and the swap counterparty will be obligated to make floating payments at LIBOR (as determined pursuant to the related interest rate swap agreement), in each case calculated on a notional amount equal to the lesser of (i) the outstanding aggregate principal balance of the [____]-year hybrid mortgage loans, [____]-year hybrid mortgage loans or [____]-year hybrid mortgage loans, as applicable, or (ii) the applicable scheduled notional amount for the related payment date, and adjusted to a monthly basis. To the extent that a fixed payment exceeds a floating payment on any payment date, amounts otherwise available to bondholders will be applied to make a net payment to the swap counterparty, and to the extent that a floating payment exceeds a fixed payment on any payment date, the swap counterparty will owe a net payment to the issuing entity. Any net amounts received by the issuing entity under the interest rate swap agreement will be applied to pay interest shortfalls and basis risk shortfalls and achieve and maintain overcollateralization as described in this prospectus supplement.] [Under the cap agreement[s], the cap counterparty will be required to make monthly payments to the issuing entity for certain specified periods if one-month LIBOR moves above certain specified rates.] The interest rate [cap] [swap] agreement[s] will provide only temporary, limited protection against upward movements in one-month LIBOR, and, to the extent described in this prospectus supplement, may diminish the amount of basis risk shortfalls experienced by the bonds during the periods the interest rate [cap] [swap] agreement[s] are in effect as specified in the [related] interest rate [cap] [swap] agreement.]

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[Third party providers of credit support for 10% or more of the pool assets to be provided as applicable.]

[Other forms of credit enhancement to be identified and described as applicable for each transaction.]

Maturity Date

The maturity date for the bonds will occur on the payment date in [_______]. As to each class, the actual final payment date may be earlier, and could be substantially earlier, than that class’s final maturity date.

Fees and Expenses

Before payments are made on the bonds, and by funds from interest collections, the servicer will be paid a monthly fee, depending on the characteristics of the mortgage loans as described in this prospectus supplement, calculated as [___]% annually, or [____]% annually until the first adjustment date and [___]% annually thereafter, on the principal balances of the related mortgage loans, as described in this prospectus supplement. Such servicer fee will be deducted by the servicer prior to remittance of funds to the trustee for distribution to securityholders.

In addition, the applicable percentage rate described above will increase by an annual percentage ranging from [____]% annually to [___]% annually with respect to each mortgage loan covered by a lender-paid loan-level primary mortgage insurance policy. The servicer will pay the fees related to the lender-paid loan-level primary mortgage insurance policies on behalf of the issuing entity.

The bond trustee, the owner trustee and the custodian will each be paid a fixed annual fee from investment earnings on funds held in the collection account. The master servicer will receive as compensation the investment income on funds held in the collection account after payment of the fees of the bond trustee, the owner trustee and the custodian. The issuing entity administrator will not receive any additional compensation with respect to the performance of its duties on behalf of the issuing entity.

The servicer, the master servicer, the bond trustee, the owner trustee, the issuing entity administrator and the custodian will also be entitled to reimbursement of certain expenses from the issuing entity before payments are made on the bonds.

The Mortgage Loans

Statistical Information. The statistical information on the mortgage loans presented herein is based on the principal balance of such mortgage loans as of the cut-off date. Such information does not take into account defaults, delinquencies and prepayments that may have occurred with respect to the mortgage loans since such date. As a result, the statistical distribution of the characteristics in the final mortgage pool as of the closing date will vary from the statistical distribution of such characteristics as presented in this prospectus supplement, although such variance will not be material.

General. On the closing date, the assets of the issuing entity will consist primarily of [___ pool[s] of] [described mortgage loans] with a total principal balance as of [_____], of approximately $[_____]. The mortgage loans will be secured by mortgages, deeds of trust or other security instruments, all of which are referred to in this prospectus supplement as mortgages. [Describe any second lien mortgage loans.]

The mortgage loans have interest rates that adjust at the intervals and based on the indices described in this prospectus supplement. Approximately [_____]% of the mortgage loans have original terms to maturity of [___] years, approximately [___]% of the mortgage loans have original terms to maturity of [____] years, and approximately [___]% of the mortgage loans have original terms to maturity of [____] years.

The mortgage loans will not be insured or guaranteed by any government agency.

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The Depositor expects that the mortgage loans will have the following approximate characteristics as of the cut-off date:

Mortgage Pool Summary

	Range or Total	Weighted Average	Total Percentage
Number of Mortgage Loans
Total Principal Balance
Principal Balances
Mortgage Rates
Original Terms to Maturity (in months)
Remaining Terms to Maturity (in months)
Original Loan-to Value Ratios
Number of One-Year LIBOR Mortgage Loans
Number of One-Year CMT Mortgage Loans
Number of Interest Only Mortgage Loans
Geographic Concentration in Excess of 10.00% of the Total Scheduled Principal Balance:
·California
Maximum Single Zip Code Concentration
Credit Scores
Number of Mortgage Loans with Prepayment Penalties at Origination
Gross Margins
Maximum Mortgage Rates
Minimum Mortgage Rates
Months to Next Mortgage Rate Adjustment
Initial Caps
Periodic Caps

 *     The weighted average is based only on the mortgage loans having credit scores.

[Pre-funding Feature

On the closing date, the securities administrator will deposit up to approximately $[________] of the net proceeds from the issuance of the bonds, which represents approximately [_____]% of the mortgage loans as of the cut-off date, into a separate pre-funding account established for the mortgage pool, to acquire additional mortgage loans for the mortgage pool. During the pre-funding period (i.e., from the closing date to[_________]) amounts on deposit in the pre-funding account may be withdrawn by the securities administrator from time to time to purchase from the depositor additional mortgage loans meeting the same criteria applicable to the mortgage pool described in this prospectus supplement, provided certain other conditions are satisfied at the time of purchase. The seller has identified additional mortgage loans that are expected to have the characteristics described under “Conveyance of Subsequent Mortgage Loans.” Funds on deposit in the pre-funding account may only be applied to acquire additional mortgage loans for the mortgage pool.

If funds in the pre-funding account are not completely used for that purpose during the pre-funding period, the remaining funds in the pre-funding account will be paid as a principal prepayment to related bondholders in accordance with the principal payment priority provisions described in this prospectus supplement. This payment will be made on the [__________] payment date. The depositor anticipates that substantially all of the funds in the pre-funding account will be used to purchase additional mortgage loans prior to the close of the pre-funding period.

At the closing date, the depositor will also deposit approximately $[_______] in a capitalized interest account for use by the securities administrator as needed during the pre-funding period to ensure that all required interest payments are made on the bonds.

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See “DESCRIPTION OF THE MORTGAGE POOL; Conveyance of Subsequent Mortgage Loans” in this prospectus supplement and “THE ISSUING ENTITIES AND THE ISSUING ENTITY ASSETS—The Loans” and “THE ISSUING ENTITIES AND THE ISSUING ENTITY ASSETS—Pre-Funding” in the prospectus for a general description of the characteristics of the initial and subsequent mortgage loans.]

Mortgage Loan Representations and Warranties

The seller has made or assigned certain representations and warranties concerning the mortgage loans to the depositor under the mortgage loan purchase agreement (the “Mortgage Loan Purchase Agreement”). The depositor’s rights to these representations and warranties will be assigned to the issuing entity under the sale and servicing agreement and pledged by the issuing entity to the bond trustee under the indenture for the benefit of bondholders.

Following the discovery of a breach of any representation or warranty that materially and adversely affects the value of a mortgage loan, or receipt of notice of that breach, the seller [or originator] will be required to (1) cure that breach, (2) repurchase the affected mortgage loan from the issuing entity or (3) in certain circumstances, substitute another mortgage loan.

In order to substitute a new mortgage loan for a mortgage loan that has been removed from the trust because of a breach of a representation or warranty, (a) substitution must generally take place within [two] years from the closing date and (b) a mortgage loan that is materially similar to the deleted mortgage loan must be available for substitution.

Mortgage Loan Servicing

The mortgage loans will be master serviced by [______]. The master servicer will oversee the servicing of the mortgage loans by the servicer under the servicing agreements, but will not be ultimately responsible for the servicing of the mortgage loans, except as provided in the sale and servicing agreement and described in this prospectus supplement.

The mortgage loans will be serviced by [_________________] under the applicable servicing agreement.

If the servicer is removed due to default or otherwise, a successor servicer acceptable to the master servicer and the rating agencies will assume responsibility for the servicing of the mortgage loans, as described in this prospectus supplement.

Optional Redemption of the Bonds

The bonds may be redeemed at a redemption price equal to 100% of the unpaid principal amount of such bonds, plus accrued and unpaid interest thereon at the applicable bond interest rate. The bonds are not otherwise subject to redemption or call at the option of the issuing entity nor are they subject to special redemption.

Acceleration of Maturity at Events of Default

If an Event of Default occurs and is continuing with respect to the Bonds, then and in every such case the Trustee or the Holders of Bonds representing more than 50% of the aggregate Class Principal Amount of the Bonds of the Controlling Class may declare all the Bonds to be immediately due and payable, by a notice in writing to the Issuer (and to the Trustee if given by Bondholders), and upon any such declaration such Bonds shall become immediately due and payable in an amount as defined in the Indenture.

At any time after such a declaration of acceleration of maturity of the Bonds has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee, the Holders of Bonds representing more than 50% of the aggregate Class Principal Amount of the Controlling Class, by written notice to the Issuer and the Trustee, may rescind and annul such declaration and its consequences under certain circumstances as set forth in the Indenture. No such rescission shall affect any subsequent Default or impair any right consequent thereon.

Tax Status

For federal income tax purposes the Bonds will be characterized as debt. Each holder of a Bond, by its acceptance of a Bond, will agree to treat the Bonds as debt. The issuing entity [will not][may] be classified as a taxable mortgage pool [but even if so classified, will not be subject to federal income tax as a corporation as long as all of the securities classified as equity interests in the issuing entity for federal income tax purposes are held by an entity that qualifies as a “real estate investment trust,” or are held directly or indirectly through one or more wholly owned “qualified REIT subsidiaries”].

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We refer you to “Risk Factors — Issuing Entity Could Become a Taxable Entity” in this prospectus supplement and “Material Federal Income Tax Consequences” in this prospectus supplement and the accompanying prospectus for additional information concerning the application of federal income tax laws to the bonds.

ERISA Considerations

A fiduciary of any employee benefit plan (the “Plan”) subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or section 4975 of the Internal Revenue Code of 1986, as amended (the “Code“), should carefully review with its legal advisors whether the purchase or holding of Class A Bonds could give rise to a transaction prohibited or not otherwise permissible under applicable law.

Legal Investment

The Class [________] Bonds will [not] constitute “mortgage related securities“ under the Secondary Mortgage Market Enhancement Act of 1984 (“SMMEA”).

There may be other restrictions on the ability of certain types of investors to purchase the bonds that prospective investors should also consider:

Bond Rating

Each class of offered bonds is expected to receive a credit rating from one or more nationally recognized statistical rating organizations (“NRSROs”).

These ratings are not recommendations to buy, sell or hold these bonds. A rating may be changed or withdrawn at any time by the assigning rating agency.

The ratings do not address the possibility that, as a result of principal prepayments, the yield on your bonds may be lower than anticipated.

The ratings do not address the payment of any basis risk shortfalls with respect to the offered bonds.

We refer you to “RATINGS” in this prospectus supplement for a more complete discussion of the bond ratings.

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RISK FACTORS

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the offered bonds. You should also consider the risk factors described in the accompanying prospectus. All statistical information referred to in this section is based on the mortgage pool as constituted on the cut-off date.

The Current Turbulence in the Financial Markets and Economy May Adversely Affect the Performance and Market Value of Your Securities and These Conditions May Not Improve in the Near Future

Market and economic conditions during the past several years have caused significant disruption in the credit markets. Continued concerns about the availability and cost of credit, the U.S. mortgage market, declining real estate markets in the U.S., economic conditions in the U.S. and Europe and the systemic impact of inflation or deflation, energy costs and geopolitical issues have contributed to increased market volatility and diminished expectations for the U.S. economy. Increased market uncertainty and instability in both U.S. and international capital and credit markets, combined with declines in business and consumer confidence and increased unemployment, have contributed to volatility in domestic and international markets.

As a result of these market conditions, the cost and availability of credit has been and may continue to be adversely affected by illiquid credit markets and wider credit spreads. Concern about the stability of the markets and the strength of counterparties has led many lenders and institutional investors to reduce, and in some cases cease, lending to borrowers. Continued turbulence in the U.S. and international markets and economies may negatively affect the U.S. housing market and in the credit performance and market value of residential mortgage loans.

There is particular uncertainty about the prospects for growth in the U.S. economy. A number of factors influence the potential uncertainty, including, but not limited to, high current unemployment, rising government debt levels, prospective Federal Reserve policy shifts, the withdrawal of government interventions into the financial markets, changing U.S. consumer spending patterns, and changing expectations for inflation and deflation. Income growth and unemployment levels affect borrowers’ ability to repay mortgage loans, and there is risk that economic activity could be weaker than anticipated as the country begins to exit the recent serious recession.

In addition, the difficult economic environment and rate of unemployment and other factors (which may or may not affect real property values) may affect the mortgagors’ timely payment of scheduled payments of principal and interest on the mortgage loans and, accordingly, the actual rates of delinquencies, foreclosures and losses with respect to the mortgage loans. Excessive home building or historically high foreclosure rates resulting in an oversupply of housing in a particular area may increase the amount of losses incurred on defaulted mortgage loans.

These factors and general market conditions could adversely affect the performance and market value of your securities. There can be no assurance that governmental or other actions will improve these conditions in the near future.

Downgrade of Long-term Ratings of Eurozone Nations May Adversely Affect the Market Value of the Securities

In response to the economic situation facing the European Economic and Monetary Union, or Eurozone, based on factors including tightening credit conditions, higher risk premiums on Eurozone sovereigns and disagreement among European policy makers as to how best to address the declining market confidence with respect to the Eurozone, on January 13, 2012, Standard & Poor’s, a division of the McGraw-Hill Companies, Inc. (“S&P”), downgraded the long-term credit ratings on nine members of the Eurozone, including Austria, Cyprus, France, Italy, Malta, Portugal, Slovakia, Slovenia and Spain. The outlooks on the ratings on Austria, Belgium, Cyprus, Estonia, France, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Spain are negative. In addition, S&P lowered the long-term issuer credit rating on the European Financial Stability Facility from ‘AAA’ to ‘AA+’. It is not yet clear how these downgrades and outlooks will impact the market price or the marketability of the offered securities, and no assurance can be given that these ratings actions will not have an adverse effect on the value of the securities.

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Recent Trends in the Residential Mortgage Market May Adversely Affect the Performance and Market Value of Your Securities

Since late 2006, delinquencies, defaults and foreclosures on residential mortgage loans have increased, and they may continue to increase in the future. These increases have not been limited to “subprime” mortgage loans, which are made to borrowers with impaired credit, but have also affected “Alt A” mortgage loans, which are made to borrowers often with limited documentation, and “prime” mortgage loans, which are made to borrowers with better credit who frequently provide full documentation. In addition to higher delinquency, default and foreclosure rates, loss severities on all types of residential mortgage loans have increased due to declines in residential real estate values, resulting in reduced home equity. Nationwide home price appreciation rates generally have been negative since late 2007, and this trend may continue for an indefinite period of time. Higher loan-to-value ratios generally result in lower recoveries on foreclosure, and an increase in loss severities above those that would have been realized had property values remained the same or continued to appreciate.

Another factor that may have contributed to, and may in the future result in, higher delinquency rates is the increase in monthly payments on adjustable rate mortgage loans. Borrowers with adjustable rate mortgage loans are exposed to increased monthly payments when the related mortgage interest rate adjusts upward from the initial fixed rate to the rate computed in accordance with the applicable index and margin. Mortgage loans that provide for the payment of interest, but not principal, for a certain period may also result in higher delinquency rates when, following the interest-only period, the monthly payment with respect to each of these mortgage loans is increased in order to amortize the principal balance of the mortgage loan over the remaining term and to pay interest at the applicable mortgage interest rate.

Current market conditions may impair borrowers’ ability to refinance or sell their residential properties, which may also contribute to higher delinquency and default rates. In response to increased delinquencies and losses with respect to mortgage loans, many mortgage loan originators recently have implemented more restrictive underwriting criteria for mortgage loans, which will likely result in reduced availability of refinancing alternatives for borrowers. These risks would be exacerbated to the extent that prevailing mortgage interest rates increase from current levels. Home price depreciation experienced to date, and any further price depreciation, may also leave borrowers with insufficient equity in their homes to enable them to refinance. Borrowers who intend to sell their homes on or before the maturity of their mortgage loans may find that they cannot sell their property for an amount equal to or greater than the unpaid principal balance of their mortgage loans.  While some mortgage loan originators and servicers have created or otherwise are participating in modification programs in order to assist borrowers with refinancing or otherwise meeting their payment obligations, not all borrowers will qualify for or will take advantage of these opportunities.

In response to these circumstances, federal, state and local authorities have enacted and continue to propose new legislation, rules and regulations relating to the origination, servicing and treatment of mortgage loans in default or in bankruptcy. These initiatives could result in delayed or reduced collections from mortgagors, limitations on the foreclosure process and generally increased servicing costs. Certain of these initiatives could also permit the servicer to take actions, such as with respect to the modification of mortgage loans, that might adversely affect the securities, without any remedy or compensation to the holders of the securities.

The conservatorships of Fannie Mae and Freddie Mac in September 2008 have impacted both the real estate market and the value of real estate assets generally. While Fannie Mae and Freddie Mac currently act as the primary sources of liquidity in the residential mortgage markets, both by purchasing mortgage loans for their own portfolios and by guaranteeing mortgage-backed securities, their long-term role is uncertain as the Obama administration has proposed reducing and eventually eliminating their role in the residential mortgage markets. A reduction in the ability of mortgage loan originators to access Fannie Mae and Freddie Mac to sell their mortgage loans may adversely affect the financial condition of mortgage loan originators. In addition, any decline in the value of securities issued by Fannie Mae and Freddie Mac may affect the value of residential mortgage-backed securities in general.

These adverse changes in market and credit conditions have had, and may continue to have, the effect of depressing the market values of residential mortgage-backed securities generally, and substantially reducing the liquidity of residential mortgage-backed securities generally. These developments may adversely affect the performance, marketability and overall market value of your securities.

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Financial Regulatory Legislative Reform and Related Regulations Could Have a Significant Impact

In response to the financial crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which President Obama signed into law on July 21, 2010. The Dodd-Frank Act requires the creation of new federal regulatory agencies, and grants additional authorities and responsibilities to existing regulatory agencies to identify and address emerging systemic risks posed by the activities of financial services firms. The Dodd-Frank Act also provides for enhanced regulation of derivatives and mortgage-backed securities offerings, restrictions on executive compensation and enhanced oversight of credit rating agencies. Additionally, the Dodd-Frank Act establishes the Bureau of Consumer Financial Protection (the “BCFP”) within the Federal Reserve System, a new consumer protection regulator tasked with regulating consumer financial services and products. The Dodd-Frank Act also limits the ability of federal laws to preempt state and local consumer laws.

The impact of the Dodd-Frank Act will depend significantly upon the content and implementation of the rules and regulations issued on its mandate. It is not yet clear how the Dodd-Frank Act and its associated rules and regulations will impact the mortgage-backed securities market and residential mortgage lending generally, and the issuing entity, investors in the securities offered thereby, the sponsor, the depositor, the servicers and their respective businesses and assets specifically. No assurance can be given that the new regulations will not have an adverse impact on these entities or the value of the securities offered thereby.

The BCFP is charged with issuing regulations to implement amendments to the TILA made by the Dodd-Frank Act. These regulations will expand the existing “ability to pay” requirements under TILA, establish new minimum underwriting standards and impose new limits on prepayment penalties.

In March 2011, the SEC issued a release soliciting public comment on proposed rules that, if adopted, would require, among other things, that the sponsor or an affiliate of the sponsor retain at least 5% of the credit risk of a non-exempt securitization, and in general prohibit the transfer or hedging, and restrict the pledge, of the retained credit risk. In April 2010, the SEC proposed rules, some of which were re-proposed in July 2011, that, if adopted, would further revise substantially Regulation AB and other rules regarding the offering process, disclosure and reporting for publicly-issued asset-backed securities. Among other things, the proposed changes would require (i) enhanced disclosure of loan level information at the time of securitization and on an ongoing basis, (ii) that the transaction agreements provide for review of the underlying assets by an independent credit risk manager if certain trigger events occur and (iii) periodic assessments of an asset-backed security issuer’s continued ability to conduct shelf offerings. We cannot predict what effect the proposed rules will have, if adopted, on the marketability of asset-backed securities such as the securities. In addition, if the proposed rules are adopted, your securities, which may not be subject to all of the requirements included in the proposed rules, may be less marketable than those that are offered in compliance with the proposed rules.

In addition, other regulatory agencies, including the FDIC, recently have proposed or adopted financial reform regulations. It is not clear whether or when any proposed regulations will be adopted, what the final form of any such regulations will be, how they will be implemented, or if the depositor, the servicers or any successor servicer will be affected. No assurance can be given that any proposed regulations will not have an adverse impact on the issuing entity, sponsor, depositor, the servicers or any successor servicer or on the value of the securities.

Prospective investors should independently assess and determine whether they are directly or indirectly subject to Article 122a of the Banking Consolidation Directive (Directive 2006/48/EC (as amended)) (“Article 122a”) as implemented by the Member States of the European Union. Any prospective investor that is subject to Article 122a should independently assess and determine their ability to comply with the initial and ongoing obligations imposed by Article 122a and the regulatory capital treatment that is required with respect to the purchase of an offered security and what impact any such regulatory capital treatment may have on the liquidity or market value of the offered securities, in particular in the event that the minimum risk retention requirement or other obligations imposed by Article 122a are found to be not in compliance. Although the sponsor or one or more affiliates will purchase the Class [___] Securities at the closing, the sponsor is under no obligation to satisfy the minimum 5% net economic interest with respect to the offered securities in one of the forms prescribed by Article 122a, there is no obligation on the part of the sponsor to maintain any level of risk retention in a manner that would comply with Article 122a, and none of the sponsor or affiliates of the sponsor make any representation or assurance to retain any such level of risk retention after the closing date. Investors who are subject to Article 122a should consider carefully investing in the offered securities as a failure to comply with one or more of the requirements set out in Article 122a will result in the imposition of a penal capital charge in respect of the offered securities acquired by the relevant investor.

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Potential Changes in Ratings Present Risks

Since mid-2007, the mortgage market has encountered difficulties which continue and which may adversely affect the performance or market value of your securities. Residential mortgage-backed securities backed by mortgage loans originated in relatively recent years, particularly since 2005, have generally been the focus of attention due to a higher and earlier than expected rate of delinquencies, defaults and foreclosures. Many residential mortgage-backed securities, in particular those that were issued between 2005 and 2007, have been subject to rating agency downgrades. These downgrades have included downgrades of “AAA”-rated securities. There may be further downgrades of residential mortgage-backed securities in the future. In addition, the rating agency rating the securities may change its ratings criteria after issuance and any changes in ratings criteria may adversely affect the ratings assigned to the securities. There can be no assurance that the assigning rating agency will not downgrade the securities or that any other rating agency will not assign ratings to the securities that are lower than those assigned by the rating agency requested to assign ratings to the securities.

None of the sponsor, the depositor, the trustee, the master servicer, the securities administrator, the underwriters or any other person will have any obligation to cause any rating of any of the offered securities to be maintained. Changes affecting the mortgage loans, the parties to the pooling and servicing agreement or other persons may have an adverse effect on the ratings of the offered securities, and thus their market value. Any such adverse changes do not by themselves constitute a default under the servicing agreements or the pooling and servicing agreement.

Pre-offering Review of the Mortgage Loans Underlying the Securities May Not Reveal Aspects of the Mortgage Loans Which Could Lead to Losses

The sponsor has undertaken certain limited loan review procedures with respect to various aspects of certain mortgage loans underlying the securities, including a review of the underwriting of certain of the mortgage loans conducted by each originator and verification of certain aspects of the mortgage loans. In conducting these review procedures, the sponsor relied on information and resources available to it (which were limited and which, in most cases, were not independently verified) and on one or more third party agents. These review procedures were intended to discover certain material discrepancies and possible material defects in the mortgage loans reviewed. However, these procedures did not constitute a re-underwriting of the loans, and were not designed or intended to discover every possible discrepancy or defect. In addition, the sponsor engaged a third party to conduct procedures designed to verify the sponsor’s data regarding characteristics of the mortgage loans, which data were used to generate the numerical information about the mortgage pools included in this prospectus supplement. In addition, the review included the recalculation by a third party of numerical disclosures regarding the mortgage loans selected by the sponsor and appearing in this prospectus supplement. There can be no assurance that any review process conducted uncovered relevant facts that could be determinative of how the reviewed mortgage loans will perform. Investors should note that the sponsor undertook this limited loan file review with respect to a portion of the mortgage loans and did not undertake any loan file review for the remaining mortgage loans.

Furthermore, to the extent that the limited review conducted by the sponsor did reveal factors that could affect how the mortgage loans will perform, the sponsor may have incorrectly assessed the potential severity of those factors. For example, in cases where a third party reviewed an original appraisal and determined that it did not support the original appraised value, the third party reviewed a Limited Desktop Appraisal Analysis or similar appraisal product, such as a field review, to determine whether the original appraisal was correct. The review of the analyses by the sponsor and the seller may, erroneously, not have indicated a defect in the original appraisal, which could result in an increased risk that payments on these mortgage loans may not be received or recovered. Investors are encouraged to make their own determination as the extent to which they place reliance on the limited loan review procedures of the sponsor.

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[Risks Related to Mortgage Loans with Interest-Only Payments

Approximately [___] of the mortgage loans to be included in the trust provide for payment of interest at the related mortgage interest rate, but no payment of principal, for a period of [___] years following the origination of the mortgage loan. Following the interest-only period, the monthly payment with respect to each of these mortgage loans will be increased to an amount sufficient to amortize the principal balance of the mortgage loan over the remaining term and to pay interest at the applicable mortgage interest rate.

The interest-only mortgage loans may present special default and prepayment risks, particularly for bonds purchased at a discount.

We refer you to “Yield, Prepayment and Weighted Average Life— General” in this prospectus supplement and “Risk Factors — Risks Related to Mortgage Loans with Interest-Only Payments” and “— Changes in U.S. Economic Conditions May Adversely Affect the Performance of Mortgage Loans, Particularly Adjustable Rate Loans of Various Types” in the accompanying prospectus.]

[Special Default Risk of Second Lien Mortgage Loans

Approximately [___]% of the mortgage loans are secured by second liens on the related mortgaged properties. These second lien mortgage loans are subordinate to the rights of the mortgagee under the related first mortgages and may present special risks upon default of any second lien mortgage loans.

We refer you to “Risk Factors — Special Default Risk of Second Lien Mortgage Loans” and “— Risks Related to Simultaneous Second Liens and Other Borrower Debt” in the accompanying prospectus.]

[Risks Related to Simultaneous Second Liens and Other Borrower Debt

Approximately [____]% of the mortgage loans in the trust are first lien mortgage loans with respect to which, at the time of origination, the originator or other lender also originated second lien mortgage loans that may not be included in the trust. The weighted average indicative combined loan-to-value ratio, which is the ratio of the total outstanding principal balance of a first lien mortgage loan and the related simultaneous second lien mortgage loan to the value of the related mortgaged property, of these mortgage loans is [___]%. In addition, other borrowers whose first lien loans are included in the trust may have obtained secondary mortgage financing following origination of the first lien loans. In addition, borrowers may increase their aggregate indebtedness substantially by assuming consumer debt of various types. Consequently, investors should consider that borrowers who have less equity in their homes, or who have substantial mortgage and consumer indebtedness, may be more likely to default and may be more likely to submit to foreclosure proceedings.

We refer you to “Risk Factors — Risks Related to Simultaneous Second Liens and Other Borrower Debt” in the accompanying prospectus.]

Geographic Concentration of Mortgage Loans

Approximately [____]% of the mortgage loans to be included in the trust are secured by properties located in [____] and approximately [____]% of the mortgage loans to be included in the trust are secured by properties located in [_______]. The rate of delinquencies, defaults and losses on the mortgage loans may be higher than if fewer of the mortgage loans were concentrated in those states because adverse economic conditions and natural disasters will have a disproportionate impact on the mortgage loans in general.

We refer you to “Yield, Prepayment and Weighted Average Life” in this prospectus supplement and “Risk Factors — Geographic Concentration of the Mortgage Loans” in the accompanying prospectus.  For additional information regarding the geographic concentration of the mortgage loans to be included in the mortgage pool, see the applicable table(s) in Annex A of this prospectus supplement.

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Mortgage Loan Interest Rates May Limit Interest Rates on the Bonds

The bonds will accrue interest at [describe interest rate], but those interest rates are subject to certain limitations, generally based on the weighted average interest rates of the mortgage loans in the trust or as otherwise described below, net of certain allocable fees and expenses of the issuing entity and any payments owed on derivative instruments. The mortgage loans to be included in the trust will have interest rates that either are fixed or adjust based on a variable index, as described in this prospectus supplement.

Any adjustable rate mortgage loans in the trust may also have periodic maximum and minimum limitations on adjustments to their interest rates, and may have the first adjustment to their interest rates a number of years after their first payment dates. In addition, adjustable rate mortgage loans generally have lifetime maximum interest rates. As a result, your variable rate bonds may accrue less interest than they would accrue if their interest rates were solely based on the specified index plus the specified margin.

A variety of factors could limit the interest rates and adversely affect the yields to maturity on the variable rate securities. Some of these factors are described below.

The interest rates for your bonds adjust [monthly] based on the [___ index], while the interest rates on the mortgage loans to be included in the trust adjust [monthly][semi-annually] [based on a different index or not adjust at all]. Consequently, the limits on the interest rates on these bonds may prevent increases in the interest rates for extended periods in a rising interest rate environment.

The interest rates on adjustable rate mortgage loans may respond to economic and market factors that differ from those that affect the [____ index] applicable to your variable rate bonds. It is possible that the interest rates on any adjustable rate mortgage loans may decline while the interest rates on the bonds are stable or rising. It is also possible that the interest rates on any adjustable rate mortgage loans and the interest rates on the bonds may both decline or increase during the same period, but that the interest rates on your bonds may decline or may increase more slowly or rapidly.

To the extent that fixed rate or adjustable rate mortgage loans are subject to default or prepayment, the interest rates on the bonds may be reduced as a result of the net funds cap limitations described in this prospectus supplement.

We refer you to “Description of the Bonds — Payments of Interest” and “— Credit Enhancement — Overcollateralization” in this prospectus supplement. For a general description of the interest rates of the related mortgage loans, we refer you to “Description of the Mortgage Pool” in this prospectus supplement..

Potential Inadequacy of Credit Enhancement

[The bonds are not insured by any surety bond.] The credit enhancement features of subordination and loss allocation, excess interest, overcollateralization and limited cross-collateralization, [together with any primary mortgage insurance and financial guaranty insurance policies], are intended to enhance the likelihood that holders of more senior classes of bonds will receive regular payments of interest and principal, but are limited in nature and may be insufficient to cover all losses on the related mortgage loans.

Subordination and Allocation of Losses. If the applicable subordination is insufficient to absorb losses, then holders of subordinate bonds[, particularly the Class [_____ Bonds,] will likely incur losses and may never receive all of their principal payments. You should consider that:

· if you buy a Class [____] Bond and losses on the related mortgage loans exceed the total principal amount of the class of bonds subordinate to your bonds (if any), plus, if applicable to the trust and as specified in this prospectus supplement, any excess interest and any overcollateralization that has been created, the principal amount of your bonds will be reduced proportionately with the principal amounts of the other bonds of your class by the amount of that excess; and

· after the total principal amount of the subordinate bonds has been reduced to zero, losses on the mortgage loans may reduce the principal amounts (or notional amounts) of the senior bonds.

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Losses on the related mortgage loans will reduce the loss protection provided by the subordinate bonds to the senior bonds and will increase the likelihood that the senior bonds will not receive all of their expected principal payments.

If overcollateralization is maintained at the required amount and the related mortgage loans generate interest in excess of the amount needed to pay interest and principal on your bonds, the fees and expenses of the issuing entity and any payments owed to a derivatives counterparty, then excess interest may be used to pay you and the other bondholders the amount of any reduction in the aggregate principal balance of the mortgage loans caused by application of losses. These payments will generally be made in order of seniority. We cannot assure you, however, that any excess interest will be generated and, in any event, unless otherwise specified in this prospectus supplement, no interest will be paid to you on the amount by which the principal amount of your bonds was reduced because of the application of losses.

Overcollateralization. In order to create and maintain overcollateralization, it will be necessary that the mortgage loans generate more interest than is needed to pay interest on the bonds, as well as any fees and expenses of the issuing entity and any payments owed to a derivative counterparty. If the bonds have the benefit of excess interest and/or overcollateralization, we expect that the mortgage loans will generate more interest than is needed to pay those amounts, at least during certain periods, because the weighted average of the interest rates on the mortgage loans is expected to be higher than the weighted average of the interest rates on the bonds plus the weighted average aggregate expense rate. Any remaining interest generated by the mortgage loans will be used to absorb losses on the mortgage loans and to maintain overcollateralization. In addition, on the closing date, the total scheduled principal balance of the mortgage loans may exceed the total principal amount of the bonds. This excess is referred to as “overcollateralization” and will be available to absorb losses. We cannot assure you, however, that the mortgage loans will generate enough excess interest to maintain this overcollateralization level as set by the applicable rating agencies. In addition, there may be no amounts available from any interest rate derivative agreement described in this prospectus supplement to cover shortfalls.  The following factors will affect the amount of excess interest that the related mortgage loans will generate:

Every time a mortgage loan is prepaid in whole or in part, total excess interest after the date of prepayment will be reduced because that mortgage loan will no longer be outstanding and generating interest or, in the case of a partial prepayment, will be generating less interest. The effect of this reduction on your bonds will be influenced by the amount of prepaid loans and the characteristics of the prepaid loans. Prepayment of a disproportionately high number of high interest rate mortgage loans would have a greater negative effect on future excess interest.

If the rates of delinquencies, defaults or losses on the mortgage loans turn out to be higher than expected, excess interest available for overcollateralization or to absorb losses will be reduced. Every time a mortgage loan is liquidated or charged off, excess interest will be reduced because that mortgage loan will no longer be outstanding and generating interest.

[Limited Cross-Support. The trust contains [two or more] separate mortgage pools, as specified in this prospectus supplement. Principal payments on the senior bonds will depend, for the most part, on collections on the mortgage loans in the related pool.  However, as specified in this prospectus supplement, the senior bonds have the benefit of credit enhancement in the form of subordination from one or more of the other pools. That means that even if the rate of losses on mortgage loans in the pool related to your class of senior bonds is low, losses in an unrelated pool may reduce the loss protection for your bonds.]

[Interest Rate Derivative Agreements. Any amounts received under any interest rate cap or swap agreement will generally be applied as described in this prospectus supplement to pay interest shortfalls and, if applicable, to maintain overcollateralization and cover losses. However, we cannot assure you that any amounts will be received under that interest rate derivative agreement, or that any such amounts that are received will be sufficient to maintain any required overcollateralization or to cover interest shortfalls and losses on the mortgage loans.]

[Primary Mortgage Insurance. Approximately [___]% of the mortgage loans are first lien mortgage loans which have original loan-to-value ratios greater than 80%. Approximately [___]% and [___]% of those mortgage loans are covered by existing borrower- or lender- paid primary mortgage insurance policies. The existing borrower- or lender- paid primary mortgage insurance policies will generally have the effect of reducing the original loan-to-value ratios of those covered mortgage loans to the [___]% to [___]%.]   

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[In addition, one or more loan-level primary mortgage insurance policies may be acquired on behalf of the issuing entity from primary mortgage insurance providers, providing the initial insurance coverage specified in this prospectus supplement for those first lien mortgage loans with original loan-to-value ratios greater than 80%. ]

These loan-level primary mortgage insurance policies will generally have the effect of reducing the original loan-to-value ratios of those covered mortgage loans to the percentage specified in this prospectus supplement.

However, these policies will only cover first lien mortgage loans and will be subject to various other limitations and exclusions. In addition, borrower-paid primary mortgage insurance may be subject to cancellation by the related borrower. As a result, coverage may be rescinded or denied on some mortgage loans. Primary mortgage insurance providers will generally curtail the insured payments on a foreclosed mortgage loan if the related servicer does not foreclose that mortgage loan within a limited time period determined by the insurance provider. In addition, because the amount of coverage under these policies depends on the loan-to-value ratio of the related mortgaged property at the inception of these policies, a decline in the value of the related mortgaged property will not result in increased coverage, and the trust may still suffer a loss on a covered mortgage loan. Accordingly, these primary mortgage insurance policies will provide only limited protection against losses on the mortgage loans.]

Unpredictability and Effect of Prepayments

The rate of prepayments on the mortgage loans will be sensitive to prevailing interest rates. Generally, if prevailing interest rates decline, mortgage loan prepayments may increase due to the availability of refinancing at lower interest rates. If prevailing interest rates rise, prepayments on the mortgage loans may decrease.

Borrowers may prepay their mortgage loans in whole or in part at any time; however, some or all of the mortgage loans to be included in the trust may require the payment of a prepayment premium in connection with any voluntary prepayments in full, and certain voluntary prepayments in part, made during periods ranging from the periods specified in this prospectus supplement. These prepayment premiums may discourage borrowers from prepaying their mortgage loans during the applicable period. [or Borrowers may prepay their mortgage loans in whole or in part at any time without penalty.]

Prepayments on the mortgage loans may occur as a result of solicitations of the borrowers by mortgage loan originators, including the seller and its affiliates, the servicer or servicers, as applicable, and any master servicer. In addition, the availability of newer mortgage products with more flexible payment terms or that require lower monthly payments, such as “option ARMs,” may result in an increase in the number of borrowers who prepay their mortgage loans to take advantage of new products.

The timing of prepayments of principal may also be affected by liquidations of or insurance payments on the mortgage loans. In addition, the sponsor, as the seller of the mortgage loans to the depositor, or such other seller as specified in this prospectus supplement, may be required to purchase mortgage loans from the trust in the event that certain breaches of representations and warranties made with respect to the mortgage loans are not cured. These purchases will have the same effect on bondholders as prepayments of mortgage loans.

A prepayment of a mortgage loan will usually result in a payment of principal on the bonds:

· If you purchase bonds at a discount, especially any principal-only bonds, and principal prepayments on the related mortgage loans are received at a rate slower than you anticipate, then your yield may be lower than you anticipate.

· If you purchase bonds at a premium, especially any interest-only bonds, and principal prepayments on the related mortgage loans are received at a rate faster than you anticipate, then your yield may be lower than you anticipate.

The prepayment experience of the mortgage loans to be included in the trust may differ significantly from that of other first and second lien residential mortgage loans.

We refer you to “Yield, Prepayment and Weighted Average Life” in this prospectus supplement and “Yield, and Prepayment Considerations” in the accompanying prospectus for a description of factors that may influence the rate and timing of prepayments on the mortgage loans.

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Delay in Receipt of Liquidation Proceeds; Liquidation Proceeds May Be Less Than Mortgage Balance

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

Risks Associated With New Laws Relating to Mortgage Loan Servicing

Numerous laws, regulations and rules related to the servicing of mortgage loans, including efforts to delay or suspend foreclosure actions for a specified period, have been proposed recently by federal, state and local governmental authorities. A number of these laws have been enacted, including in California. These laws, regulations and rules will result in delays in the foreclosure process, and may lead to reduced payments by borrowers or increased reimbursable servicing expenses. You bear the risk that these regulatory developments will adversely impact your securities, whether due to delayed or reduced distributions or reduced market value.

Violation of Various Federal, State and Local 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 lenders.  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 mortgage loans.

Mortgage loans are also subject to various federal laws, including:

· the federal Truth-in-Lending Act and Regulation Z promulgated thereunder, which require certain disclosures to borrowers regarding the terms of their 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 borrower’s credit experience.

Violations of certain provisions of these federal laws may limit the ability of the servicers to collect all or part of the principal of or interest on the related mortgage loans and in addition could subject the trust to damages and administrative enforcement.

The seller of the mortgage loans made or assigned the representation in the mortgage loan sale agreement described in this prospectus supplement that each mortgage loan was originated in compliance with applicable federal, state and local laws and regulations.  In the event of a breach of this representation, the seller [or originator] will be obligated to cure the breach or repurchase or replace the affected mortgage loan in the manner described in this prospectus supplement and under “The Agreements— _______]” in this prospectus supplement.

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Mortgage Loan Modification Programs and Future Legislative Action May Adversely Affect the Performance and Market Value of Your Securities

To limit losses on delinquent mortgage loans, in accordance with the servicing agreements, the servicers may use loss mitigation techniques, including forbearance agreements and other modification agreements and pre-foreclosure sales. Modifications of mortgage loans in an attempt to maximize the ultimate proceeds of such mortgage loans may have the effect of, among other things, reducing or otherwise changing the mortgage interest rate, forgiving payments of principal, interest or prepayment charges, extending the final maturity date, capitalizing or deferring delinquent interest and other amounts owed under the mortgage loans, deferring principal payments, with or without interest, or any combination of these or other modifications. Since all of the classes of offered securities receive interest based on the weighted average net mortgage interest rate of the mortgage loans in the related mortgage pool or are subject to a limitation on interest equal to that rate, modifications to mortgage interest rates of the related mortgage loans will reduce interest payable on the related offered securities. In addition, while the U.S. Congress has failed to pass legislation to enhance the power of bankruptcy courts to reduce the principal amount of, or the interest rate on, a mortgage loan of an individual who is a debtor in bankruptcy secured by a primary residence, it is possible that such legislation could be enacted in the future.

A modification may result in reduced interest collections available for distribution to the related securities, reduced distributions of principal or the allocation of a realized loss to the most subordinate class of securities outstanding. Modifications that are designed to maximize collections to the issuing entity in the aggregate may adversely affect a particular class of securities. The servicers are required to consider the interests of all classes of securities as a whole when making servicing decisions. If a servicer reduces the interest rate, extends the payment period or accepts a lesser amount than stated in the mortgage note in satisfaction of the mortgage note, or charges off or sells the mortgage loan, amounts available to make payments on the related securities will be reduced. The actual final distribution date for any class might be later, and could be significantly later, than the final scheduled distribution date if the related servicer extends the maturity date of a mortgage loan beyond the final scheduled distribution date for the securities.

During the third quarter of 2008 and the first quarter of 2009, the federal government, through the Federal Housing Administration and the Federal Deposit Insurance Corporation, commenced implementation of programs designed to provide homeowners with assistance in avoiding residential mortgage loan foreclosures. In addition, certain mortgage lenders and servicers have voluntarily, or as part of settlements with law enforcement authorities, established loan modification programs relating to the mortgages they hold or service. In January 2009, the President announced his “Homeowner Affordability and Stability Plan,” which is focused on reducing foreclosures. These programs may involve, among other things, the modification of mortgage loans to reduce the principal amount of the loans or the rate of interest payable on the loans, or to extend the payment terms of the loans. In addition, members of the U.S. Congress have indicated support for additional legislative relief for homeowners, including a proposed amendment of the bankruptcy laws to permit the modification of mortgage loans in bankruptcy proceedings. These loan modification programs, as well as future law enforcement and legislative or regulatory actions, including amendments to the bankruptcy laws that result in the modification of outstanding mortgage loans, may adversely affect the performance and market value of your securities.

It is not yet certain whether the servicers or any successor servicer will modify the terms of any mortgage loans, what form any modified terms may take, how or when modifications may be implemented, or how the securities may be impacted by such modifications. No assurances can be given that the implementation of loan modifications or the failure to implement loan modifications will not adversely impact the securities.

Special Assessments and Energy Efficiency Liens May Take Priority Over the Mortgage Lien

Mortgaged properties securing the mortgage loans may be subject to the lien of special property taxes and/or special assessments. These liens are superior to the liens securing the mortgage loans, irrespective of the date of the mortgage. In some instances, individual borrowers may be able to elect to enter into contracts with governmental agencies for Property Assessed Clean Energy (PACE) or similar assessments that are intended to secure the payment of energy and water efficiency and distributed energy generation improvements that are permanently affixed to their properties, possibly without notice to or the consent of the mortgagee. These assessments also have lien priority over the mortgages securing mortgage loans. No assurance can be given that any mortgaged property so assessed will increase in value to the extent of the assessment lien. Additional indebtedness secured by the assessment lien would reduce the amount of the value of the mortgaged property available to satisfy the affected mortgage loan.

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Helping Families Save Their Homes Act

The Helping Families Save Their Homes Act of 2009, Public Law 111-22, 123 Stat. 1632, effective as of May 20, 2009, amends the Truth in Lending Act to require purchasers or assignees of mortgage loans secured by a borrower’s principal dwelling to mail or deliver notice to borrowers of the sale or transfer of their mortgage loan no later than 30 days after a sale or transfer. The sale of the mortgage loans from the depositor to the issuing entity will require that these notices be mailed or delivered reflecting the ownership of the mortgage loans by the issuing entity. Failure to comply with these notice requirements may result in civil claims for compensatory and punitive damages against the issuing entity. Any judgment against, or settlement by, the issuing entity relating to these violations would reduce the funds otherwise available for distribution to investors, and may result in shortfalls or losses on your securities. The servicing agreements will require the servicers to deliver the required notices to borrowers.

Risks Associated With Potential New Laws Relating to Mortgage Loan Origination or Ownership

The U.S. Congress and various state and local legislatures are considering or have adopted legislation, which, among other things, would permit limited assignee liability for certain violations in the mortgage loan origination process. We cannot predict whether or in what form the U.S. Congress or various state and local legislatures may enact such legislation or how such legislation might impact your securities. We are also unable to predict how changes by federal, state or local authorities to regulations currently in effect relating to assignee liability may affect your securities.

Predatory Lending Laws/High Cost Loans

Various federal, state and local laws have been enacted that are designed to discourage predatory lending practices. The federal Home Ownership and Equity Protection Act of 1994, commonly known as HOEPA, prohibits inclusion of certain provisions in mortgage loans that have mortgage rates or origination costs in excess of prescribed levels, and requires that borrowers be given certain disclosures prior to the origination of mortgage loans. Some states have enacted, or may enact, similar laws or regulations, which in some cases impose restrictions and requirements greater than those in HOEPA.

In addition, under the anti-predatory lending laws of some states, the origination of certain mortgage loans (including loans that are not classified as “high cost” loans under applicable law) must satisfy a net tangible benefits test with respect to the related borrower. 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 related originator reasonably believed that the test was satisfied.

Failure to comply with these laws, to the extent applicable to any of the mortgage loans, could subject the trust, as an assignee of the related mortgage loans, to monetary penalties and could result in the borrowers rescinding the affected 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 have included numerous participants within the secondary mortgage market, including some securitization trusts. The cost of defending such cases, including legal fees incurred by the securitization trust, are typically paid out of collections on trust assets and hence reduce the amounts otherwise distributable to trust securityholders.

The seller will represent that the trust does not include any mortgage loans that are subject to HOEPA or that would be classified as “high cost” loans under any similar state or local predatory or abusive lending law. There may be mortgage loans in the trust that are subject to the state or local requirement that the loan provide a net tangible benefit (however denominated) to the borrower; the seller will represent that these mortgage loans are in compliance with applicable requirements. If it is determined that the trust includes loans subject to HOEPA or otherwise classified as high cost loans, or which do not comply with applicable net tangible benefit requirements, the seller will be required to repurchase the affected loans and to pay any liabilities incurred by the trust due to any violations of these laws. If the loans are found to have been originated in violation of predatory or abusive lending laws and the seller does not repurchase the affected loans and pay any related liabilities, bondholders could incur losses.

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Bankruptcy or Insolvency Proceedings Could Delay or Reduce Payments on the Bonds

Each transfer of a mortgage loan to the sponsor [or other seller as described herein], from the seller to the depositor and, in connection with the issuance of any asset-backed securities, from the depositor to the trust, will be intended to be an absolute and unconditional sale of that mortgage loan and will be reflected as such in the applicable documents. However, in the event of the bankruptcy or insolvency of a prior owner of a mortgage loan, a trustee in bankruptcy or a receiver or creditor of the insolvent party could attempt to recharacterize the sale of that mortgage loan by the insolvent party as a borrowing secured by a pledge of the mortgage loan. Such an attempt, even if unsuccessful, could result in delays in payments on the bonds. If such an attempt were successful, it is possible that the affected mortgage loans could be sold in order to liquidate the assets of the insolvent entity.  In the case of the bankruptcy or insolvency of the applicable seller, there can be no assurance that the proceeds of such a liquidation would be sufficient to repay the bonds in full.

One or more of the transferors may be banks that are subject to regulation by the FDIC. The FDIC recently has indicated that it may treat as property of a bank in receivership or conservatorship (i) any property that is shown as an asset on the financial statements of a bank, or (ii) any property that the bank previously transferred if the bank retains a continuing economic interest in the transferred assets. The FDIC has indicated that it may assert these positions notwithstanding that the assets have been sold as a matter of law. The depositor will take certain steps to try to prevent any of the mortgage loans from being shown as assets on the financial statements of any transferor that is a bank and to try in certain cases to prevent a transferor that is a bank from purchasing securities. The depositor, however, can provide no assurances that its efforts will be successful, nor can it provide any assurance that a court will not accept the FDIC’s position. As a result, should a transferor that is a bank become the subject of a receivership or conservatorship, should the mortgage loans be shown as assets on its financial statements or should it own any securities, and should the FDIC’s position prevail, then the issuing entity may not own all the mortgage loans and there may be delays in payment or losses on the securities. There may also be delays in payments while these issues are being resolved by the FDIC or a court.

[Issuing Entity Could Become a Taxable Entity

For federal income tax purposes, the issuing entity may be a taxable mortgage pool. However, as long as all of the securities classified as equity interests in the issuing entity for federal income tax purposes are held by an entity that qualifies as a “real estate investment trust,” or are held directly or indirectly through one or more wholly owned “qualified REIT subsidiaries,” the taxable mortgage pool will not be subject to federal income tax as a corporation. If any holder of a class of securities characterized as equity in the issuing entity for federal income tax purposes were to fail to qualify as a real estate investment trust or a qualified REIT subsidiary, the issuing entity could become subject to federal income tax as though it were a corporation. Any tax imposed on the issuing entity would reduce cashflow that would be available to make payments on the bonds and could cause losses which would adversely affect the bonds, and in particular, the subordinated bonds (We refer you to “Material Federal Income Tax Consequences” in this prospectus supplement)].

DESCRIPTION OF THE MORTGAGE POOL

Wherever reference is made herein to a percentage of some or all of the Mortgage Loans, that percentage (unless otherwise specified) is determined on the basis of the total scheduled principal balance of such Mortgage Loans as of the cut-off date. [As indicated at “Description of the Bonds — General,” subsequent to the Closing Date, but no later than [_________], the Trust may from time to time acquire subsequent mortgage loans from the Depositor. The procedures and selection criteria for acquiring subsequent mortgage loans are set forth at “— Conveyance of Subsequent Mortgage Loans” below. The discussion that follows in this Prospectus Supplement will apply to subsequent mortgage loans only where specific reference is made to “Subsequent Mortgage Loans” or “Mortgage Loans.”]

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General

On the Closing Date, the Trust is expected to include approximately [________] [describe Mortgage Loans] Mortgage Loans, [______] of which have original terms to maturity from the first due date of the monthly payment of not more than [_______] years, and which have a total scheduled principal balance (after giving effect to monthly payments due on the cut-off date) of approximately $[_______]. Approximately [_______]% of the Mortgage Loans are first lien mortgage loans and approximately [_______]% of the Mortgage Loans are second lien mortgage loans. Approximately [______]% of the Mortgage Loans have original terms to maturity from the due date of the first monthly payment of 20 years, approximately [_______]% of the Mortgage Loans have original terms to maturity from the due date of the first monthly payment of 25 years, and approximately [_____]% of the Mortgage Loans have original terms to maturity from the due date of the first monthly payment of 30 years.  

The underwriting guidelines generally applied by the Originator in originating the Mortgage Loans are described under “Underwriting Standards” below. The Mortgage Loans will be acquired by the Depositor from the Seller and the Depositor will, in turn, convey the Mortgage Loans to the Trust. We refer you to “The Mortgage Loan Purchase Agreement and the Sale and Servicing Agreement—Sale of the of Mortgage Loans.”

The Mortgage Loans are [_______] rate Mortgage Loans. Interest on the Mortgage Loans accrues on the basis of [______].

Pursuant to its terms, each Mortgage Loan[, other than a loan secured by a condominium unit,] is required to be covered by a standard hazard insurance policy in an amount generally equal to the lower of the unpaid principal amount thereof or the replacement value of the improvements on the related Mortgaged Loan.  Generally, a condominium association is responsible for maintaining hazard insurance covering the entire building.

[[______] of the Mortgage Loans provide for monthly payments of interest, but not principal, for a period of up to ten years following origination, after which the monthly payments will be increased to amounts sufficient to pay interest and to amortize the principal balances over the remaining terms. Approximately [______]% of the Mortgage Loans provide for monthly payments of interest, but not principal, for periods shorter than ten years. If the monthly payment at the end of the interest only period is substantially higher than the interest only payment, that loan may be subject to an increased risk of default.]  [To be provided as applicable.]

[Approximately [______]% of the Mortgage Loans are partially insured by the FHA (the “FHA Mortgage Loans”) or are partially guaranteed by the VA (the “VA Mortgage Loans”). The benefits of the FHA insurance and VA guaranty as to each of these Mortgage Loans are limited as described herein. [Some] [None] of the FHA Mortgage Loans and the VA Mortgage Loans will be serviced on a full recourse basis.]

[As of the cut-off date, approximately [_____]% of the first lien mortgage loans have original Loan-to-Value Ratios in excess of 80%. Approximately [_____]% of these Mortgage Loans are not covered by existing borrower- or lender-paid loan-level primary mortgage insurance policies. In addition, approximately [____]% of the second lien mortgage loans have original combined loan-to-value ratios in excess of 80% and approximately [______]% of the first lien mortgage loans have original Indicative combined loan-to-value ratios in excess of 80%.] [To be provided as applicable.]

[Approximately [_____]%,[_____]%,[_____]%% and v% of the mortgage loans are secured by mortgaged properties located in the states of [_____]%, respectively.]

[Disclose if any state or geographic region has a 10% or greater concentration.]

The Seller will represent and warrant that no Mortgage Loan is a “high cost” or “covered” loan under federal, state or local predatory lending laws.

[The Fixed Rate Mortgage Loans

The “Fixed Rate Mortgage Loans” consist of approximately [_____] fixed rate Mortgage Loans, with an aggregate principal balance as of the cut-off date of approximately $[_____]. The Fixed Rate Mortgage Loans had individual principal balances at origination of at least $[_____] but not more than $[_____], with an average principal balance at origination of approximately $[_____]. Approximately[_____]% of the Fixed Rate Mortgage Loans have terms to maturity from the date of origination of not more than thirty years. The Fixed Rate Mortgage Loans have a weighted average remaining term to calculated maturity of approximately [_____] months as of the cut-off date. Approximately [_____]% of the Fixed Rate Mortgage Loans are balloon Mortgage Loans. Approximately [____]% of the Fixed Rate Mortgage Loans have been modified.]

[To be provided as applicable.]

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[Adjustable Mortgage Rates

As of the cut-off date, [________ ]% of the Mortgage Loans will provide for semi-annual adjustment of the related Mortgage Rate based on the six-month LIBOR index and [______]% of the Mortgage Loans will provide for monthly adjustment of the related Mortgage Rate based on the one-month LIBOR index, each as described under “—The Indices” below. With respect to each Mortgage Loan, there will be corresponding adjustments to the monthly payment amount, in each case on each Adjustment Date applicable thereto; provided that the first such adjustment for all of the Mortgage Loans will occur, in the case of approximately [_______]% of the Mortgage Loans, after an initial period of approximately six months following origination, in the case of approximately [_______]% of the Mortgage Loans, after an initial period of approximately three years following origination, in the case of approximately [_____]% of the Mortgage Loans, after an initial period of approximately five years following origination and, in the case of approximately _______ [_____]% of the Mortgage Loans, after an initial period of approximately seven years following origination. On each Adjustment Date for a Mortgage Loan, the Mortgage Rate will be adjusted to equal the sum, rounded generally to the next highest or nearest multiple of 1/8%, of the related Index and the related Gross Margin (the “Gross Margin”), provided that the Mortgage Rate on each such Mortgage Loan will not increase or decrease by more than the related Periodic Cap (ranging from [____]% to [____]%) as specified in the related mortgage note on any related Adjustment Date and will not exceed the related Maximum Rate (the “Maximum Rate”) over the life of such Mortgage Loan or be less than the Minimum Rate. Effective with the first monthly payment due on each Mortgage Loan after each related Adjustment Date after the interest-only period, if any, has concluded, 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 Caps and Maximum Rates, the Mortgage Rate on each such Mortgage Loan, as adjusted on any related Adjustment Date, may be less than the sum of the related Index and the related Gross Margin, rounded as described herein. We refer you to “—The Indices” below.

The Mortgage Loans do not permit the related borrower to convert the adjustable Mortgage Rate to a fixed Mortgage Rate.]

[To be provided as applicable.]  [May vary in accordance with structure of transaction.]

[The Indices

As indicated above, the index applicable to the determination of the Mortgage Rates for the Mortgage Loans will be either the one-month LIBOR index or the six-month LIBOR index as most recently available as of the first business day of the month preceding the month of such Adjustment Date. In the event that the one-month LIBOR index or the six-month LIBOR index becomes unavailable or otherwise unpublished, the Servicer will select a comparable alternative index over which it has no direct control and which is readily verifiable. For One-Month LIBOR Loans, the one-month LIBOR index is determined as of the date that occurs twenty-five (25) days before each Adjustment Date. For the Six-Month LIBOR Loans (including all hybrid loans), the six-month LIBOR index is determined as of the first Business Day of the month immediately preceding the month in which the Adjustment Date occurs.] [Discussion of any other index described in the prospectus and applicable to the Mortgage Loans to be provided, if applicable. We refer you to “The Trusts and the Trust Assets — The Mortgage Loans — General” in the prospectus.]

[To be provided as applicable.]

[Primary Mortgage Insurance

Approximately [____]% of the Mortgage Loans are 80+ loan-to-value loans. We refer you to “Description of the Mortgage Pool[s] — General.” Approximately[___]% and [_____]% of the 80+ loan-to-value loans are covered by existing borrower-paid loan-level primary mortgage insurance policies and lender-paid loan-level primary mortgage insurance policies, respectively. Approximately [____]% of the 80+ loan-to-value loans are not covered by existing borrower- or lender-paid loan-level primary mortgage insurance policies.

These primary mortgage insurance policies provide limited protection against losses on defaulted 80+ loan-to-value loans and such protection is subject to various limitations and exclusions including, for example, losses resulting from fraud. As a result, coverage may be denied or limited on some 80+ lTV Loans. In addition, because 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 Mortgage Loan covered by a primary mortgage insurance policy. The providers of the primary mortgage insurance policies may also affect the timing and conduct of foreclosure proceedings and other servicing decisions regarding defaulted Mortgage Loans covered by the related primary mortgage insurance policy. The Servicer is responsible for paying the premiums under the LPMI Policies. We refer you to “Insurance — Primary Mortgage Insurance Policies” in the prospectus.]

[To be provided as applicable.]

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Certain Characteristics of the Mortgage Loans

The Mortgage Loans are expected to have the approximate aggregate characteristics as of the cut-off date, including data regarding how many Mortgage Loans have been modified by each category of modification pursuant to loan modification programs, as set forth in Annex A attached to this prospectus supplement and incorporated by reference herein.  Prior to the issuance of the Bonds, Mortgage Loans may be removed from the Mortgage Pool[s] as a result of incomplete documentation or otherwise, if the Depositor deems such removal necessary or appropriate.

[Delinquency and Loss Information for the Pool Assets

Delinquency and loss information for the mortgage pool, including statistical information regarding delinquencies and losses, will be included.]

[Table of delinquency and loss information of securitized mortgage pool through charge-off.]

[Conveyance of Subsequent Mortgage Loans

On the Closing Date, approximately $[_____] will be deposited by the Issuing Entity Administrator into an eligible account. During the period from the Closing Date to [_______], the Depositor is expected to purchase from time to time subsequent mortgage loans from the Seller and, in turn, sell all such subsequent mortgage loans to the Trust for inclusion in the Mortgage Pool. The purchase price for each subsequent mortgage loan will equal its scheduled principal balance as of the date of origination (reduced by principal payments due or paid prior to the purchase date, if any) and will be paid by the Issuing Entity Administrator from the related pre-funding amount.

As of the cut-off date, the mortgage loans expected to be conveyed as the subsequent mortgage loans by the Seller are expected to have the following characteristics:

Number of Subsequent Mortgage Loans

Total Scheduled Principal Balance

Mortgage Rates:

Weighted Average

Range

Weighted Average Remaining Term to Maturity (in months)

Original Loan-to-Value Ratios:

Weighted Average

Range

Scheduled Principal Balances:

Average

Range

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Pursuant to the Sale and Servicing Agreement, the conveyance of subsequent mortgage loans to the Trust may be made on any Business Day during the Pre-Funding Period, subject to certain conditions in the Sale and Servicing Agreement being satisfied, including, among others, that:

· [The subsequent mortgage loans conveyed on the subsequent transfer date must satisfy the same representations and warranties applicable to the initial mortgage loans set forth in the Mortgage Loan Purchase Agreement, which representations and warranties have been confirmed by the rating agencies rating the Bonds;

· The subsequent mortgage loans conveyed on the subsequent transfer date are selected in a manner reasonably believed not to be adverse to the interests of the Bondholders;

· [The Bond Trustee receives an Officer’s Certificate confirming the satisfaction of each condition precedent specified in the Sale and Servicing Agreement and opinions of counsel with respect to certain corporate, bankruptcy and tax matters relating to the transfer of subsequent mortgage loans in the forms substantially similar to those delivered on the Closing Date;]

· The conveyance of the subsequent mortgage loans on the subsequent transfer date will not result in a reduction or withdrawal of any ratings assigned to the Offered Bonds;

· [No subsequent mortgage loan conveyed on the subsequent transfer date may be more than one monthly payment delinquent in payment;]

· Each subsequent mortgage loan will have been underwritten substantially in accordance with the applicable originator’s underwriting guidelines;

· No subsequent mortgage loan may have a remaining term to maturity exceeding [___] months;

· [No subsequent mortgage loan may have a Loan-to-Value Ratio greater than [125]%;]

· The weighted average Mortgage Rate for all the Mortgage Loans at the end of the Pre-Funding Period must not be more than 100 basis points lower than the weighted average Mortgage Rate of the initial mortgage loans;

· Following the conveyance of the subsequent mortgage loans on the subsequent transfer date, the weighted average characteristics of the Mortgage Loans the Mortgage Pool will remain substantially similar to the characteristics of the initial mortgage loans in the Mortgage Pool as of the cut-off date; and

· [An independent accountant must provide the Depositor, the applicable rating agencies rating the Bonds, the Bond Trustee and the Underwriters with a letter stating that the characteristics of the subsequent mortgage loans conform to the characteristics described above and in the Sale and Servicing Agreement.]]

If the Trust does not apply the full pre-funding amount towards the purchase of subsequent mortgage loans prior to the end of the Pre-Funding Period, then such remaining proceeds in the pre-funding account will be paid as a principal prepayment to the related Bondholders on the [___] Payment Date.

On the Closing Date, the Issuing Entity Administrator will also establish a capitalized interest account which will be funded by an initial deposit made by the Depositor on the Closing Date of approximately $[____], which represents approximately [_____]% of the total principal balance of the Mortgage Loans as of the cut-off date. Amounts in the capitalized interest account will be applied by the Issuing Entity Administrator during the Pre-Funding Period to pay interest on that portion of the Bonds supported by the pre-funding amount. At the end of the Pre-Funding Period, any remaining funds in the capitalized interest account will be paid to the Depositor and the account will be terminated.]

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STATIC POOL INFORMATION

Static pool information with respect to the sponsor’s prior securitized pools during the period from [specify date] to [specify date], presented by pool, is available online at http://www.sequoia-reports.com. Access to this web address is unrestricted and free of charge. Information available at this web address is deemed to be part of this prospectus supplement, except to the extent provided under “Static Pool Information” in the accompanying prospectus. [A reference to any third-party static pool information is to be provided, as applicable.]

Various factors may affect the prepayment, delinquency and loss performance of the mortgage loans over time. The various mortgage loan pools for which performance information is shown at the above internet addresses had initial characteristics that differed, and may have differed in ways that were material to the performance of those mortgage pools. These differing characteristics include, among others, product type, credit quality, geographic concentration, originator concentration, servicer concentration, average principal balance, weighted average interest rate, weighted average loan-to-value ratio, weighted average term to maturity and the presence or absence of prepayment penalties. We do not make any representation, and you should not assume, that the performance information shown at the above internet addresses is in any way indicative of the performance of the mortgage loans in the trust fund.

The mortgage loans will continue to be serviced in accordance with accepted servicing practices through charge-off, which we define as the ultimate liquidation of the loan or any REO acquired in respect of the loan. For purposes of Form 10-D reporting and other such reporting under the Securities Exchange Act, delinquency information on the mortgage loans will be provided through charge-off in thirty (30) day segments, measured as of the end of the month prior to the reporting month.

ADDITIONAL INFORMATION

The depositor has filed the registration statement with the Securities and Exchange Commission (the “SEC”) (Registration No. _________). The depositor is also subject to some of the information requirements of the Exchange Act, and, accordingly, will file reports thereunder with the SEC. The registration statement and the exhibits thereto, and reports and other information filed by the depositors under the Exchange Act can be inspected and copied at the public reference facilities maintained by the Securities and Exchange Commission at 100 F Street, N.E., Washington, D.C. 20549, or by calling the SEC at 1-800-SEC-0330, and at certain of its Regional Offices located as follows: Chicago Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and Northeast Regional Office, 233 Broadway, New York, New York 10279 and electronically through the Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval System at the Securities and Exchange Commission’s web site (http://www.sec.gov).

The description in this prospectus supplement of the trust fund and the mortgaged properties is based upon the mortgage pool as expected to be constituted at the close of business on the cut-off date, as adjusted for the scheduled principal payments due on or before the cut-off date. Prior to the issuance of the offered bonds, mortgage loans may be removed from the trust fund as a result of incomplete documentation or otherwise, if the depositor deems that removal necessary or appropriate. A limited number of other mortgage loans may be added to the trust fund prior to the issuance of the offered bonds. The depositor believes that the information in this prospectus supplement will be substantially representative of the characteristics of the mortgage pool as it will be constituted at the time the offered bonds are issued although the range of mortgage rates and maturities and some other characteristics of the mortgage loans in the trust fund may vary.

A current report on Form 8-K will be available to purchasers of the offered bonds and will be filed, together with the indenture, with the SEC after the initial issuance of the offered bonds. In the event a material number of mortgage loans are removed from or added to the trust fund as described in the preceding paragraph, that removal or addition will be noted in the current report.

Pursuant to the indenture, the issuing entity administrator will prepare a monthly statement to bondholders containing the information described under “The Agreements — Certain Matters Under the Indenture — Reports to bondholders.” The issuing entity administrator may make available each month, to any interested party, the monthly statement to bondholders via the issuing entity administrator’s website. The issuing entity administrator’s website will be located at [www._______], and assistance in using the website can be obtained by calling the issuing entity administrator’s customer service desk at [_________]. Parties that are unable to use the above distribution option are entitled to have a paper copy mailed to them via first class mail by notifying the issuing entity administrator at the following address: [___________]. The issuing entity administrator will have the right to change the way such reports are distributed in order to make such payments more convenient and/or more accessible, and the issuing entity administrator will provide timely and adequate notification to such parties regarding any such changes.

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In addition, within a reasonable period of time after the end of each calendar year, the issuing entity administrator will, upon request, prepare and deliver to each bondholder of record during the previous calendar year a statement containing information necessary to enable bondholders to prepare their tax returns. These statements will not have been examined and reported upon by an independent public accountant.

THE ISSUING ENTITY

General

The “issuing entity” is a statutory trust established under the laws of the State of Delaware by an amended and restated deposit trust agreement, dated as of [_________], 201[_] . The issuing entity was formed for the sole purpose of issuing the bonds and the investor certificate. The depositor is the settlor and sole beneficiary of the issuing entity and [_____________] is the owner trustee of the issuing entity. The depositor is a limited purpose finance corporation the capital stock of which is wholly owned by [_________________] Redwood Trust, Inc., a Maryland corporation. Redwood Trust will be the manager of the issuing entity pursuant to a management agreement (the “Management Agreement”) entered into with the issuing entity. None of the depositor, Redwood Trust, [_______________] or any of their respective affiliates has guaranteed or is otherwise obligated with respect to payment of the bonds and no person or entity other than the issuing entity is obligated to pay the bonds, except as specifically set forth in this prospectus supplement with regard to the bond insurance policy.

The Issuing Entity’s assets will consist almost entirely of the mortgages which will be pledged to secure the bonds. If the mortgage loans and other collateral securing the bonds are insufficient for payment of the bonds, it is unlikely that significant other assets of the issuing entity will be available for payment of the bonds. The amount of funds available to pay the bonds may be affected by, among other things, realized losses incurred on defaulted mortgage loans.

The Indenture prohibits the Issuing Entity from incurring any indebtedness other than the bonds, or assuming or guaranteeing the indebtedness of any other person.

The Owner Trustee

[__________] will act not in its individual capacity but solely as the Owner Trustee under the Trust Agreement. [________] is a [___________] and its principal offices are located at [_____________]. The on going fees of the Owner Trustee will be paid by the Master Servicer.  The Owner Trustee will be entitled to reimbursement for expenses and certain other amounts (including its fees to the extent not paid by the Master Servicer and certain indemnification amounts) prior to payment of any amounts to Bondholders.

The Issuing Entity Administrator and the Depositor will perform on behalf of the Owner Trustee and the Trust certain administrative functions required under the Indenture, the Trust Agreement and the Sale and Servicing Agreement pursuant to the terms of the Administration Agreement.

[Disclosure regarding the Owner Trustee’s experience serving as a trustee in the securitization of similar asset types to be provided for each transaction.]

The Ownership Certificate

The equity ownership in the Trust will be evidenced by the Ownership Certificate. The holder of the Ownership Certificate will be entitled to receive on each Payment Date any remaining cashflow from Mortgage Loan collections after all principal and interest on the Bonds and other expenses of the Trust for such Payment Date have been made.

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DESCRIPTION OF THE BONDS

General

The Bonds will be issued pursuant to the Indenture. Set forth below are summaries of the specific terms and provisions pursuant to which the Bonds will be issued. The following summaries are subject to, and are qualified in their entirety by reference to, the provisions of the Indenture. When particular provisions or terms used in the Indenture are referred to, the actual provisions (including definitions of terms) are incorporated by reference.

The Sequoia Mortgage Trust [____], Collateralized Mortgage Bonds (the “Bonds”), will consist of the Class [___] Bonds (the “Senior Bonds”) and the Class [___] Bonds (the “Subordinated Bonds”). The Issuing Entity will also issue the Investor Certificate (the “Investor Certificate”) as described herein. The Senior Bonds and the Subordinated Bonds are collectively referred to herein as the “Offered Bonds.” Only the Bonds are offered hereby. The Classes of Bonds will have the respective Bond Interest Rates described on the cover hereof. The Investor Certificate will bear interest at the “Certificate Interest Rate” described herein.

The “Class Principal Amount” of (a) the Senior Bonds (the “Senior Class Principal Amount”) as of any Payment Date is the Original Senior Class Principal Amount reduced by all amounts previously distributed to holders of the Senior Bonds as payments of principal, (b) the Subordinated Bonds (the “Subordinated Class Principal Amount”) as of any Payment Date is the lesser of (i) the aggregate of the Stated Principal Balances of the Mortgage Loans, less the Senior Class Principal Amount immediately prior to such date, and (ii) the Original Subordinated Class Principal Amount reduced by all amounts previously distributed to holders of the Subordinated Bonds as payments of principal. The Senior Bonds will have an original Senior Class Principal Amount of $[________] (the “Original Senior Class Principal Amount”) and the Subordinated Bonds will have an original Subordinated Class Principal Amount of $[________] (the “Original Subordinated Class Principal Amount”). The “Invested Amount” of the [______________] as of any Payment Date is the lesser of (i) the aggregate of the Stated Principal Balances of the Mortgage Loans, less the sum of (x) the Senior Class Principal Amount and (y) the Subordinated Class Principal Amount, in each case immediately prior to such date, and (ii) the Original Invested Amount reduced by all amounts previously distributed to the holder of the Investor Certificate in reduction of the Invested Amount. The Investor Certificate will have an original Invested Amount of approximately $[________] (the “Original Invested Amount”).

Book-Entry Bonds

The Bonds will be book-entry Bonds (each, a Class of “Book-Entry Bonds”). Persons acquiring beneficial ownership interests in the Bonds (“Bond Owners”) may elect to hold their Bonds through the Depository Trust Company (“DTC”) in the United States, or CEDEL or Euroclear (in Europe) if they are participants of such systems, or indirectly through organizations which are participants in such systems. The Book-Entry Bonds will be issued in one or more certificates which equal the aggregate principal amount of the Bonds and will initially be registered in the name of Cede & Co., the nominee of DTC. CEDEL and Euroclear will hold omnibus positions on behalf of their participants through customers’ securities accounts in CEDEL’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, N.A., will act as depositary for CEDEL and The Chase Manhattan 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 Bonds in minimum denominations representing Class Principal Amounts of $[________] and in multiples of $1,000 in excess thereof. Except as described below, no person acquiring a Book-Entry Bond (each, a “beneficial owner”) will be entitled to receive a physical certificate representing such Bond (a “Definitive Bond”). Unless and until Definitive Bonds are issued, it is anticipated that the only “Bondholders” of the Bonds will be Cede & Co., as nominee of DTC. Bond Owners will not be Bondholders as that term is used in the Indenture. Bond Owners are only permitted to exercise their rights indirectly through the participating organizations that utilize the services of DTC, including securities brokers and dealers, banks and trust companies and clearing corporations and certain other organizations (“Participants”) and DTC.

The beneficial owner’s ownership of a Book-Entry Bond will be recorded on the records of the brokerage firm, bank, thrift institution or other financial intermediary (each, a “Financial Intermediary”) that maintains the beneficial owner’s account for such purpose. In turn, the Financial Intermediary’s ownership of such Book-Entry Bond 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 CEDEL or Euroclear, as appropriate).

S-28

Bond Owners will receive all payments of principal of, and interest on, the Bonds from the Bond Trustee through DTC and DTC participants. While the Bonds are outstanding (except under the circumstances described below), under the rules, regulations and procedures creating and affecting DTC and its operations (the “Rules”), DTC is required to make book-entry transfers among Participants on whose behalf it acts with respect to the Bonds and is required to receive and transmit payments of principal of, and interest on, the Bonds. Participants and indirect participants which have indirect access to the DTC system, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (“Indirect Participants”), with whom Bond Owners have accounts with respect to Bonds are similarly required to make book-entry transfers and receive and transmit such payments on behalf of their respective Bond Owners. Accordingly, although Bond Owners will not possess certificates, the Rules provide a mechanism by which Bond Owners will receive payments and will be able to transfer their interest.

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

Because of time zone differences, credits of securities received in CEDEL or Euroclear as a result of a transaction with a Participant will be made during subsequent securities settlement processing and dated the business day following the DTC settlement date. Such credits or any transactions in such securities settled during such processing will be reported to the relevant Euroclear or CEDEL Participants on such business day. Cash received in CEDEL or Euroclear as a result of sales of securities by or through a CEDEL Participant (as defined herein) or Euroclear Participant (as defined herein) to a DTC Participant will be received with value on the DTC settlement date but will be available in the relevant CEDEL or Euroclear cash account only as of the business day following settlement in DTC. For information relating to tax documentation procedures relating to the Bonds, see “MATERIAL FEDERAL INCOME TAX CONSEQUENCES — Withholding with Respect to Certain Foreign Investors” and “— Backup Withholding” in the prospectus and “GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES — Certain U.S. Federal Income Tax Documentation Requirements” in Annex B hereto, which Annex B is attached to this prospectus supplement and is incorporated by reference herein.

Payments on Mortgage Loans; Accounts

On or prior to the Closing Date, the Master Servicer will establish and maintain or cause to be established and maintained a separate account or accounts for the collection of payments on the Mortgage Loans (the “Collection Account”). On or prior to the Closing Date, the Bond Trustee will establish an account (the “Payment Account”), which will be maintained with the Bond Trustee in trust for the benefit of the Bondholders. On or prior to the business day immediately preceding each Payment Date, the Master Servicer will withdraw from the Collection Account the Bond Payment Amount for such Payment Date, to the extent of Available Funds on deposit therein, and will deposit such amount in the Payment Account. The “Bond Payment Amount” for any Payment Date will equal the sum of (i) the Senior Interest Payment Amount, (ii) the Senior Principal Payment Amount, (iii) the Subordinated Interest Payment Amount and (iv) the Subordinated Principal Payment Amount (as each such term is defined herein). Funds credited to the Bond Account or the Payment Account may be invested at the direction of the Depositor for the benefit and at the risk of the Depositor in Permitted Investments, as defined in the Master Servicing Agreement, that are scheduled to mature on or prior to the business day preceding the next Payment Date.

Payments

Payments on the Bonds will be made by the Bond Trustee on [the th day of each month], or if such day is not a business day, on the first business day thereafter, commencing in [____________, 200__] (each, a “Payment Date”), to the persons in whose names such Bonds are registered at the close of business on the last business day of the month preceding the month of such Payment Date (the “Record Date”).

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Payments on each Payment Date will be made by check mailed to the address of the person entitled thereto as it appears on the applicable bond register or, in the case of a Bondholder who holds 100% of a Class of Bonds or who holds Bonds with an aggregate initial Class Principal Amount of $1,000,000 or more and who has so notified the Bond Trustee in writing in accordance with the Indenture, by wire transfer in immediately available funds to the account of such Bondholder at a bank or other depository institution having appropriate wire transfer facilities; provided, however, that the final payment in retirement of the Bonds will be made only upon presentment and surrender of such Bonds at the Corporate Trust Office of the Bond Trustee.

As more fully described herein, payments will be made on each Payment Date from Available Funds in the following order of priority: (i) to interest on the Senior Bonds; (ii) to principal of the Senior Bonds; (iii) to interest on the Subordinated Bonds; (iv) to principal of the Subordinated Bonds; (v) to interest on the Investor Certificate; (vi) to principal of the Investor Certificate; and (vii) to the holder of the Investor Certificate, all remaining Available Funds, subject to certain limitations set forth herein under “— Principal.”

“Available Funds” with respect to any Payment Date will be equal to the sum of (i) all scheduled installments of interest (net of the related Expense Fees) and principal due [on the Due Date in the month] in which such Payment Date occurs and received prior to the related Determination Date, together with any Advances in respect thereof; (ii) all proceeds of any primary mortgage guaranty insurance policies and any other insurance policies with respect to the Mortgage Loans, to the extent such proceeds are not applied to the restoration of the related Mortgaged Property or released to the Mortgagor in accordance with the applicable Servicer’s or the Master Servicer’s normal servicing procedures (collectively, “Insurance Proceeds”) and all other cash amounts received and retained in connection with the liquidation of defaulted Mortgage Loans, by foreclosure or otherwise (“Liquidation Proceeds”), during the [month] preceding the month of such Payment Date (in each case, net of unreimbursed expenses incurred in connection with a liquidation or foreclosure and unreimbursed Advances, if any); (iii) all partial or full prepayments received during the [month] preceding the month of such Payment Date; and (iv) amounts received with respect to such Payment Date as the Substitution Adjustment Amount or purchase price in respect of a Deleted Mortgage Loan or a Mortgage Loan purchased by Redwood Trust [or by the Master Servicer or the Depositor] as of such Payment Date, reduced by amounts in reimbursement for Advances previously made and other amounts as to which the applicable Servicer or the Master Servicer is entitled to be reimbursed pursuant to the Master Servicing Agreement.

On each Payment Date after the Subordinated Class Principal Amount and the Invested Amount have been reduced to zero, the amount, if any, by which the Senior Interest Payment Amount and the Senior Principal Payment Amount exceed the Available Funds, shall be paid by the Insurer to the Senior Bondholders pursuant to the Bond Insurance Policy.

Interest

The Bond Interest Rate for each Class of Bonds for each Payment Date (each, a “Bond Interest Rate”) is described on the cover hereof. On each Payment Date, to the extent of funds available therefor, each Class of Bonds and the Investor Certificate will be entitled to receive an amount allocable to interest as described below (as to each such Class or the Investor Certificate, as applicable, the “Interest Payment Amount”) with respect to the related Interest Accrual Period. With respect to each Payment Date, the “Interest Accrual Period” for each Class of Bonds and the Investor Certificate will be the [calendar month] preceding the month of such Payment Date.

The Interest Payment Amount for the Senior Bonds (the “Senior Interest Payment Amount”) will be equal to the sum of (i) interest at the Senior Bond Interest Rate on the Senior Class Principal Amount, and (ii) the sum of the amounts, if any, by which the amount described in clause (i) above on each prior Payment Date exceeded the amount actually distributed as interest on such prior Payment Dates and not subsequently distributed. The Interest Payment Amount for the Subordinated Bonds (the “Subordinated Interest Payment Amount”) will be equal to the sum of (i) interest at the Subordinated Bond Interest Rate on the Subordinated Class Principal Amount, (ii) interest at the Subordinated Bond Interest Rate on any Subordinated Principal Carryover Shortfall, (iii) the sum of the amounts, if any, by which the sum of the amounts described in clauses (i) and (ii) above on each prior Payment Date exceeded the amount actually distributed as interest on such prior Payment Dates and not subsequently distributed (the “Subordinated Interest Carryover Shortfall”) and (iv) interest at the Subordinated Bond Interest Rate on any Subordinated Interest Carryover Shortfall (to the extent permitted by applicable law). The Interest Payment Amount for the Investor Certificate (the “Certificate Interest Payment Amount”) will be equal to interest at the Certificate Interest Rate on the Invested Amount. The Senior Bonds will not be entitled to interest on any Senior Interest Payment Amount not paid when due prior to such time as the Bonds are declared immediately due and payable upon the occurrence of an Event of Default as described herein under “— Priority of Payments and Allocation of Shortfalls.” The Investor Certificate will not be entitled to interest on any Certificate Interest Payment Amount not paid when due.

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The interest payable on any Payment Date as described above, but not the entitlement thereto, for the Subordinated Bonds, and in the event of a default of the Insurer under the Bond Insurance Policy, the Senior Bonds, will be reduced by their respective proportionate amounts of “Net Interest Shortfalls” for such Payment Date, if any, based on the amount of interest each Class of Bonds would otherwise be entitled to receive on such Payment Date before taking into account any reduction in such amounts resulting from such Net Interest Shortfalls. With respect to any Payment Date, the “Net Interest Shortfall” is equal to the amount by which the sum of (i) the amount of interest which would otherwise have been received with respect to any Mortgage Loan that was the subject of a Relief Act Reduction and (ii) any Prepayment Interest Shortfalls, in each case during the calendar month preceding the month of such Payment Date, exceeds the sum of (i) the master servicing fee for such period and (ii) the amounts otherwise payable on such Payment Date to the holder of the Investor Certificate as described in clauses “fifth,” “sixth” and “seventh” under “— Priority of Payments and Allocation of Shortfalls” below. A “Relief Act Reduction” is a reduction in the amount of monthly interest payment on a Mortgage Loan pursuant to the Servicemembers Civil Relief Act. A “Prepayment Interest Shortfall” is the amount by which interest paid by a borrower in connection with a prepayment of principal on a Mortgage Loan is less than one month’s interest at the related Mortgage Rate on the Stated Principal Balance of such Mortgage Loan.

Accrued interest to be paid on any Payment Date will be calculated, in the case of each Class of Bonds and the Investor Certificate, on the basis of the related Class Principal Amount or Invested Amount, as applicable, immediately prior to such Payment Date. Interest will be calculated and payable on the basis of a 360-day year divided into twelve 30-day months.

Principal

General. All payments and other amounts received in respect of principal of the Mortgage Loans will be allocated among the Senior Bonds, the Subordinated Bonds and the Investor Certificate.

Senior Principal Payment Amount. On each Payment Date, the Available Funds remaining after payment of interest with respect to the Senior Bonds, up to the amount of the Senior Principal Payment Amount for such Payment Date, will be distributed as principal of the Senior Bonds. The “Senior Principal Payment Amount” for any Payment Date will equal the Senior Percentage of the sum of (a) the principal portion of the scheduled payment due on each Mortgage Loan [on the related Due Date], (b) the principal portion of the purchase price of each Mortgage Loan that was purchased by Redwood Trust or another person pursuant to the Mortgage Loan Purchase Agreement (as defined herein) [or any optional purchase by the Master Servicer or the Depositor of a default Mortgage Loan] as of such Payment Date, (c) the Substitution Adjustment Amount in connection with any Deleted Mortgage Loan received with respect to such Payment Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of principal of Mortgage Loans that are not yet Liquidated Mortgage Loans received during the [calendar month] preceding the month of such Payment Date, (e) with respect to each Mortgage Loan that became a Liquidated Mortgage Loan during the [calendar month] preceding the month of such Payment Date, the Stated Principal Balance of such Mortgage Loan, and (f) all partial and full principal prepayments by borrowers received during the [calendar month] preceding the month of such Payment Date.

“Stated Principal Balance” means, as to any Mortgage Loan and Due Date, the unpaid principal balance of such Mortgage Loan as of such Due Date, as specified in the amortization schedule at the time relating thereto (before any adjustment to such amortization schedule by reason of any moratorium or similar waiver or grace period), after giving effect to any previous partial principal prepayments and Liquidation Proceeds received and to the payment of principal due on such Due Date and irrespective of any delinquency in payment by the related Mortgagor. The “Pool Principal Balance” with respect to any Payment Date equals the aggregate of the Stated Principal Balances of the Mortgage Loans outstanding on the Due Date in the month preceding the month of such Payment Date.

The “Senior Percentage” for any Payment Date is the percentage equivalent of a fraction the numerator of which is the Senior Class Principal Amount immediately prior to such date and the denominator of which is the sum of (i) the Senior Class Principal Amount, (ii) the Subordinated Class Principal Amount and (iii) the Invested Amount, in each case immediately prior to such date. The “Subordinated Percentage” for any Payment Date is the percentage equivalent of a fraction the numerator of which is the Subordinated Class Principal Amount immediately prior to such date and the denominator of which is the sum of (i) the Senior Class Principal Amount, (ii) the Subordinated Class Principal Amount and (iii) the Invested Amount, in each case immediately prior to such date. The “Investor Percentage” for any Payment Date will be calculated as the difference between 100% and the sum of the Senior Percentage and the Subordinated Percentage for such date.

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Subordinated Principal Payment Amount. On each Payment Date, to the extent of Available Funds therefor, the Subordinated Principal Payment Amount for such Payment Date will be distributed as principal of the Subordinated Bonds. The “Subordinated Principal Payment Amount” for any Payment Date will equal the sum of (i) the Subordinated Percentage of the sum of (a) the principal portion of the scheduled payment due on each Mortgage Loan [on the related Due Date], (b) the principal portion of the purchase price of each Mortgage Loan that was purchased by Redwood Trust or another person pursuant to the Mortgage Loan Purchase Agreement [or by the Master Servicer or the Depositor in connection with any optional purchase by the Master Servicer of a defaulted Mortgage Loan] as of such Payment Date, (c) the Substitution Adjustment Amount in connection with any Deleted Mortgage Loan received with respect to such Payment Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of principal of Mortgage Loans that are not yet Liquidated Mortgage Loans received during the [calendar month] preceding the month of such Payment Date, (e) with respect to each Mortgage Loan that became a Liquidated Mortgage Loan during the [calendar month] preceding the month of such Payment Date, the Stated Principal Balance of such Mortgage Loan and (f) all partial and full principal prepayments by borrowers received during the [calendar month] preceding the month of such Payment Date and (ii) any Subordinated Principal Carryover Shortfall. The “Subordinated Principal Carryover Shortfall” for any Payment Date will equal the excess of (a) the Original Subordinated Class Principal Amount reduced by all amounts previously distributed to holders of the Subordinated Bonds as payments of principal or Subordinated Principal Carryover Shortfall, over (b) the Subordinated Class Principal Amount immediately prior to such date.

Invested Amount Payment. On each Payment Date, to the extent of Available Funds therefor, the Invested Amount Payment for such Payment Date will be distributed in reduction of the Invested Amount of the Investor Certificate. The “Invested Amount Payment” for any Payment Date will equal the sum of (i) the Investor Percentage of the sum of (a) the principal portion of the scheduled payment due on each Mortgage Loan [on the related Due Date], (b) the principal portion of the purchase price of each Mortgage Loan that was purchased by Redwood Trust or another person pursuant to the Mortgage Loan Purchase Agreement (as defined herein) [or any optional purchase by the Master Servicer or the Depositor of a defaulted Mortgage Loan] as of such Payment Date, (c) the Substitution Adjustment Amount in connection with any Deleted Mortgage Loan received with respect to such Payment Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of principal of Mortgage Loans that are not yet Liquidated Mortgage Loans received during the [calendar month] preceding the month of such Payment Date, and (e) all partial and full principal prepayments by borrowers received during the [calendar month] preceding the month of such Payment Date and (ii) with respect to each Mortgage Loan that became a Liquidated Mortgage Loan during the [calendar month] preceding the month of such Payment Date, the Liquidation Proceeds allocable to principal received with respect to such Mortgage Loan, after application of such amounts pursuant to clause (e) of the definition of Senior Principal Payment Amount and clause (e) of the definition of Subordinated Principal Payment Amount.

Priority of Payments and Allocation of Shortfalls

Prior to the declaration that the Bonds are due and payable, on any Payment Date Available Funds will be applied in the following order of priority:

· first, to the Senior Interest Payment Amount;

· second, to the Senior Principal Payment Amount;

· third, to the Subordinated Interest Payment Amount;

· fourth, to the Subordinated Principal Payment Amount;

· fifth, to the Investor Certificate Interest Payment Amount;

· sixth, to the Investor Certificate Principal Payment Amount; and

· seventh, to the holder of the Investor Certificate, the balance of any Available Funds remaining in the Bond Account.

[To the extent helpful to the understanding of the securities, a graphic illustration of the flow of funds, payment priorities and allocations will be inserted here.]

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If a Realized Loss results in the Stated Principal Balances of the Mortgage Loans declining in an amount greater than the sum of (i) the payments of principal on the Senior Bonds, (ii) the payments of principal on the Subordinated Bonds and (iii) the payment in reduction of the Invested Amount, the Senior Percentage, the Subordinated Percentage and the Investor Percentage may shift (as a result of their methods of computation as described above under “— Principal”) such that funds available in the Payment Account for payments of principal on each future Payment Date may be allocated in a higher ratio to the Senior Bonds as a result of such shortfall. This shift of the Senior Percentage, the Subordinated Percentage and the Investor Percentage may cause the Senior Bonds to amortize more rapidly, and the Subordinated Bonds and the Investor Certificate to amortize more slowly, than would otherwise have been the case in the absence of such shortfalls. An investor should consider the risk that, in the case of any Bond purchased at a discount, a slower 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 and, in the case of any Bond 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. In addition, an investor in the Bonds should consider the risk that there can be no assurance that investors in the Bonds will be able to reinvest the payments thereon at yields equaling or exceeding the yields on such Bonds. It is possible that yields on any such reinvestments will be lower, and may be significantly lower, than the yields on the Bonds. In general, a “Realized Loss” means, with respect to a Liquidated Mortgage Loan, the amount by which the remaining unpaid principal balance of the related Mortgage Loan exceeds the amount of Liquidation Proceeds applied to the principal balance of the related Mortgage Loan. A “Liquidated Mortgage Loan” is a defaulted Mortgage Loan as to which the Master Servicer has determined that all recoverable liquidation and insurance proceeds have been received.

Under the Indenture, an Event of Default will not occur solely due to the occurrence of Shortfalls that affect only the Subordinated Bonds until all the Senior Bonds have been paid in full and then only if Shortfalls on the Subordinated Bonds have not been paid. In addition, an Event of Default by reason of any Shortfalls that affect the Senior Bonds will occur on any Payment Date only when the Pool Principal Balance is less than the principal amount of the Senior Bonds outstanding after application of all available amounts on deposit in the Payment Account on such Payment Date. Nevertheless, at any time following an Event of Default arising from a Shortfall affecting the Senior Bonds, the holders of outstanding Bonds, whether Senior Bonds or Subordinated Bonds, representing more than 50% in principal amount of all Bonds then outstanding, may declare the Bonds due and payable or take any other action pursuant to the terms of the Indenture. Until the Bonds have been declared due and payable following an Event of Default, the holders of the Subordinated Bonds may not request the Bond Trustee to take any action, other than the application of available funds in the Payment Account to pay principal and interest as provided herein, and may not otherwise cause any action to be taken to enforce the obligation of the Issuing Entity to pay principal and interest on the Subordinated Bonds. Additionally, prior to the Bonds being declared due and payable following an Event of Default, the Senior Bonds will not accrue interest in any form on the interest component of any Shortfall attributable to the Senior Bonds. Should an Event of Default occur, payments will be allocated on each Payment Date in accordance with the priorities described herein under “— Principal”, which would otherwise be applicable on such Payment Date had an Event of Default not occurred.

If Available Funds are insufficient to make payments on the Senior Bonds, Senior Bondholders will be dependent upon the ability of the Insurer to meet its obligations under the Bond Insurance Policy. For any Payment Date, the amount of Available Funds will be dependent in part upon whether any Realized Losses have been incurred on the Mortgage Loans during the most recent Prepayment Period. Realized Losses on the Mortgage Loans will be allocated first to the Investor Certificate, second to the Subordinated Bonds and third, in the event the Insurer defaults on its obligations under the Bond Insurance Policy, to the Senior Bonds.

Stated Maturity

The Stated Maturity for each Class of Bonds is the date determined by the Depositor which is years after the Payment Date immediately following the latest maturity date of any Mortgage Loan. The Stated Maturity of each Class of Bonds is [___________, 200__].

Structuring Assumptions

Unless otherwise specified, the information in the tables in this Prospectus Supplement has been prepared on the basis of the following assumed characteristics of the Mortgage Loans and the following additional assumptions (collectively, the “Structuring Assumptions”): (i) the Mortgage Loan Pool (the “Mortgage Loan Pool”) consists of one Mortgage Loan with the following characteristics:

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Principal Balance	Mortgage Rate		Net Mortgage Rate		Original Term in Maturity (in Months)	Remaining Term to Maturity (in months)
$		%		%

(ii) the Mortgage Loans prepay at the specified constant Prepayment Assumptions, (iii) no defaults in the payment by Mortgagors of principal of and interest on the Mortgage Loans are experienced, (iv) scheduled payments on the Mortgage Loans are received on the first day of each month commencing in the calendar month following the Closing Date and are computed prior to giving effect to prepayments received on the last day of the prior month, (v) prepayments are allocated as described herein without giving effect to loss and delinquency tests, (vi) there are no Net Interest Shortfalls and prepayments represent prepayments in full of individual Mortgage Loans and are received on the last day of each month, commencing in the calendar month of the Closing Date, (vii) the scheduled monthly payment for each Mortgage Loan has been calculated based on the assumed mortgage loan characteristics described in item (i) above such that each such mortgage loan will amortize in amounts sufficient to repay the principal balance of such assumed mortgage loan by its remaining term to maturity, (viii) the initial Class Principal Amount or Invested Amount, as applicable, of each Class of Bonds and the Investor Certificate, respectively, is as set forth on the cover page hereof and under “SUMMARY — Securities Other than the Bonds” herein, (ix) interest accrues on each Class of Bonds and the Investor Certificate at the applicable interest rate described on the cover hereof or described herein, (x) payments in respect of the Bonds and the Investor Certificate are received in cash on the th day of each month commencing in the calendar month following the Closing Date, (xi) the closing date of the sale of the Bonds is [__________, 200__], (xii) Redwood Trust is not required to purchase or substitute for any Mortgage Loan and (xiii) [the Master Servicer or the Depositor does not exercise any option to purchase any Mortgage Loans described herein under “— Optional Purchase of Defaulted Loans”] and the Issuing Entity does not exercise any option to redeem the Bonds as described herein under “— Redemption at the Option of the Issuing Entity.” While it is assumed that each of the Mortgage Loans prepays at the specified constant Prepayment Assumptions, this is not likely to be the case. Moreover, discrepancies exist between the characteristics of the actual Mortgage Loans which will be delivered to the Bond Trustee and characteristics of the Mortgage Loans assumed in preparing the tables herein.

Prepayments of mortgage loans commonly are measured relative to a prepayment standard or model. The model used in this Prospectus Supplement (the “Prepayment Assumption”) represents an assumed rate of prepayment each month relevant to the then outstanding principal balance of a pool of mortgage loans. The Prepayment Assumption 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 pool of mortgage loans, including the Mortgage Loans. A 100% Prepayment Assumption assumes a Constant Prepayment Rate (“CPR”) of [____]% per annum of the then outstanding principal balance of such mortgage loans in the first month of the life of the mortgage loans and an additional [____]% per annum in each month thereafter until the month. Beginning in the month and in each month thereafter during the life of such mortgage loans, a 100% Prepayment Assumption assumes a CPR of [____]% per annum each month. As used in the tables below, a [____]% Prepayment Assumption assumes a prepayment rate equal to [____]% of the Prepayment Assumption. Correspondingly, a [____]% Prepayment Assumption assumes a prepayment rate equal to [____]% of the Prepayment Assumption, and so forth.

Optional Purchase of Defaulted Loans

The Master Servicer or the Depositor may, at its option, purchase from the Issuing Entity any Mortgage Loan which is delinquent in payment by [____] days or more. Any such purchase will be at a price equal to 100% of the Stated Principal Balance of such Mortgage Loan plus accrued interest thereon at the applicable Mortgage Rate from the date through which interest was last paid by the related Mortgagor or advanced to the first day of the month in which such amount is to be distributed.

Weighted Average Lives of the Bonds

The weighted average life of a Bond is determined by (a) multiplying the amount of the reduction, if any, of the Class Principal Amount of such Bond on each Payment Date by the number of years from the date of issuance to such Payment Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in Class Principal Amount of such Bond referred to in clause (a).

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For a discussion of the factors which may influence the rate of payments (including prepayments) of the Mortgage Loans, see “RISK FACTORS — Yield, Prepayment and Maturity Risks” herein and “RISK FACTORS — Prepayment and Yield Considerations” in the Prospectus.

In general, the weighted average lives of the Bonds will be shortened if the level of prepayments of principal of the Mortgage Loans increases. However, the weighted average lives of the Bonds will depend upon a variety of other factors, including the timing of changes in such rate of principal payments and the priority sequence of payments of principal of the Classes of Bonds.

The interaction of the foregoing factors may have different effects on the Senior Bonds and the Subordinated Bonds and the effects on any Class may vary at different times during the life of such Class. Accordingly, no assurance can be given as to the weighted average life of any Class of Bonds. Further, to the extent the prices of the Bonds represent discounts or premiums to their respective original Class Principal Amounts, variability in the weighted average lives of such Classes of Bonds will result in variability in the related yields to maturity. For an example of how the weighted average lives of the Classes of Bonds may be affected at various constant Prepayment Assumptions, see the Decrement Tables below.

Decrement Tables

The following tables indicate the percentages of the initial Class Principal Amounts of the Classes of Bonds that would be outstanding after each of the dates shown at various constant Prepayment Assumptions and the corresponding weighted average lives of such Classes. The tables have been prepared on the basis of the Structuring Assumptions. It is not likely that (i) all of the Mortgage Loans will have the characteristics assumed, (ii) all of the Mortgage Loans will prepay at the constant Prepayment Assumptions specified in the tables or at any constant Prepayment Assumption or (iii) all of the Mortgage Loans will prepay at the same rate. Moreover, the diverse remaining terms to maturity of the Mortgage Loans could produce slower or faster principal payments than indicated in the tables at the specified constant Prepayment Assumptions, even if the weighted average remaining term to maturity of the Mortgage Loans is consistent with the remaining terms to maturity of the Mortgage Loans specified in the Structuring Assumptions.

PERCENT OF INITIAL CLASS PRINCIPAL AMOUNTS OUTSTANDING

[DECREMENT TABLES]

Redemption at the Option of the Residual Holder

The Bonds may be redeemed in whole, but not in part, at the Residual Holder’s option, on any Payment Date on or after the earlier of (a) years after the initial issuance of the Bonds and (b) the Payment Date on which the sum of (i) the Senior Class Principal Amount (ii) the Subordinated Class Principal Amount and (iii) the Invested Amount, after giving effect to payments to be made on such Payment Date, [____]% or less of the aggregate of the Stated Principal Balances of the Mortgage Loans as of the cut-off date, at a redemption price equal to 100% of the unpaid principal amount of such Bonds (including, in the case of the Subordinated Bonds, any unpaid Subordinated Principal Carryover Shortfall), plus accrued and unpaid interest at the applicable Bond Interest Rate through the month preceding the month in which such optional redemption date occurs. The Bonds are not otherwise subject to call or redemption at the option of the Residential Holder nor are they subject to special redemption.

Notice of any redemption to be made at the option of the Residual Holder must be given by the Residual Holder to the Bond Trustee not less than 30 days prior to the redemption date and must be mailed by the Residential Holder or the Bond Trustee to affected Bondholders at least ten days prior to the redemption date.

Acceleration of Maturity at Events of Default under the Indenture

If an Event of Default occurs and is continuing with respect to the Bonds, then and in every such case the Trustee or the Holders of Bonds representing more than 50% of the aggregate Class Principal Amount of the Bonds of the Controlling Class may declare all the Bonds to be immediately due and payable, by a notice in writing to the Issuer (and to the Trustee if given by Bondholders), and upon any such declaration such Bonds shall become immediately due and payable in an amount as defined in the Indenture.

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At any time after such a declaration of acceleration of maturity of the Bonds has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee, the Holders of Bonds representing more than 50% of the aggregate Class Principal Amount of the Controlling Class, by written notice to the Issuer and the Trustee, may rescind and annul such declaration and its consequences under certain circumstances as set forth in the Indenture. No such rescission shall affect any subsequent Default or impair any right consequent thereon.

“Event of Default,” wherever used herein, means, with respect to Bonds issued under the Indenture, any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

[(1)         if the Issuer shall:

(A)         default in the payment when and as due of any installment of principal of or interest on any Bond, or

(B)         default in the payment of the Redemption Price of any Bond which has been called for optional redemption pursuant to the Indenture;

(2)         if the Issuer shall breach, or default in the due observance, of any one or more of the covenants set forth in the Indenture;

(3)         if the Issuer shall breach, or default in the due observance or performance of, any other of its covenants in the Indenture, and such Default shall continue for a period of 30 days after there shall have been given, by registered or certified mail, to the Issuer by the Trustee, or to the Issuer and the Trustee by the Holders of Bonds representing more than 50% of the aggregate Class Principal Amount of the Controlling Class, a written notice specifying such Default and requiring it to be remedied and stating that such notice is a “Notice of Default”;

(4)         if any representation or warranty of the Issuer made in the Indenture or any certificate or other writing delivered pursuant or in connection with the Indenture shall prove to be incorrect in any material respect as of the time when the same shall have been made and, within 30 days after there shall have been given, by registered or certified mail, written notice thereof to the Issuer by the Trustee, or to the Issuer and the Trustee by the Holders of Bonds representing more than 50% of the aggregate Class Principal Amount of the Controlling Class, the circumstance or condition in respect of which such representation or warranty was incorrect shall not have been eliminated or otherwise cured;

(5)         the entry of a decree or order for relief by a court having jurisdiction in respect of the Issuer in an involuntary case under the federal bankruptcy laws, as now or hereafter in effect, or any other present or future federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or of any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or

(6)         the commencement by the Issuer of a voluntary case under the federal bankruptcy laws, as now or hereafter in effect, or any other present or future federal or state bankruptcy, insolvency or similar law, or the consent by the Issuer to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or of any substantial part of its property or the making by the Issuer of an assignment for the benefit of creditors or the failure by the Issuer generally to pay its debts as such debts become due or the taking of corporate action by the Issuer in furtherance of any of the foregoing.]

Notwithstanding the foregoing, (a) prior to the payment in full of the Senior Bonds, the failure of the Issuer to pay when and as due any installment of principal of or interest (regardless of the lapse of any grace period) on any Subordinate Bond shall not constitute an Event of Default hereunder. In addition, notwithstanding any applicable provision of this Indenture, upon payment in full of the Senior Bonds, the prior occurrence of any such shortfalls attributable to the Subordinate Bonds, which shortfalls have previously been paid in full, shall not constitute an Event of Default hereunder in respect of the Subordinate Bonds; and (b) the failure of the Issuer to pay when and as due any installment of principal of (regardless of the lapse of any grace period) any Senior Bond shall not constitute an Event of Default hereunder unless the aggregate Class Principal Amount of the Senior Bonds exceeds the aggregate Stated Principal Balances of the Mortgage Loans after application of all available amounts on deposit in the Distribution Account and application of losses on a Payment Date.

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Controlling Class Under the Indenture

For the purposes described in the prospectus under the headings “The Indenture — Modification of Indenture,” “— Events of Default” and “Rights Upon Event of Default,” the “Controlling Class“ shall be the Class [___] Bondholders or, if the Class [___] Bonds are no longer outstanding, the Class [___] Bondholders.

Credit Enhancement

Credit enhancement for the Senior Bonds will be provided by the Subordinated Bonds, by the Investor Certificate and by the Bond Insurance Policy (as defined herein). Credit enhancement for the Subordinated Bonds will be provided by the Investor Certificate.

Subordination

The rights of holders of the Subordinated Bonds and the Investor Certificate to receive payments with respect to the Mortgage Loans will be subordinated to such rights of the holders of the Senior Bonds and the rights of the holders of the Investor Certificate will be subordinated to such rights of the holders of the Subordinated Bonds, in each case only to the extent described herein.

The subordination of the Subordinated Bonds and the Investor Certificate to the Senior Bonds and the further subordination of the Investor Certificate to the Subordinated Bonds are each intended to increase the likelihood of timely receipt by the holders of Bonds with higher relative payment priority of the maximum amount to which they are entitled on any Payment Date and to provide such holders protection against losses resulting from defaults on Mortgage Loans to the extent described herein. However, the amount of protection afforded the Subordinated Bondholders by subordination of the Investor Certificate may be exhausted and Shortfalls in payments on the Subordinated Bonds could result. Any losses realized on the Mortgage Loans in excess of the protection afforded by the Investor Certificate will result in losses on the Subordinated Bonds.

The Bond Insurance Policy

[description of bond insurance policy]

The Insurer

[description of insurer]

[Third party providers of credit support for 10% or more of the pool assets to be provided as applicable.]

[Other forms of credit enhancement to be identified and described as applicable for each transaction.]

[Information regarding significant credit enhancement providers, including financial information of each such credit enhancement provider as required by Item 1114(b), to be provided as applicable.]

[Information regarding any entity or group of affiliated entities providing derivative instruments, including financial information of each derivative instrument provider as required by Item 1115(a) and (b), to be provided as applicable.]

The Issuing Entity Administrator

[___________________] will act as Issuing Entity Administrator for so long as it is also the Master Servicer. The Issuing Entity Administrator will act as paying agent and Bond registrar and will be responsible for preparing certain investor reports, including the monthly payment date statement to Bondholders and the monthly Payment Date statement to the Residual Holder, providing all customary tax reports to Bondholders related to their investment, providing monthly calculations to the Bond trustee regarding payments to Bondholders and to the Owner Trustee regarding payments to the Residual Holder. The Issuing Entity Administrator will be compensated by the Master Servicer for its services. The Issuing Entity Administrator will be entitled to reimbursement from the Trust for certain expenses prior to payment of any amounts to Securityholders. The office of the Issuing Entity Administrator for purposes of presentation of the Bonds for transfer and exchange and final payment is located at [______________________], or any other address that the Issuing Entity Administrator may designate from time to time by notice to the Bondholders, the Depositor, the Bond trustee, the Servicer and the Owner Trustee.

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[Disclosure regarding the Issuing Entity Administrator’s experience serving as such in the securitization of similar asset types to be provided.]

The Issuing Entity Administrator may resign at any time, in which event the Issuing Entity will be obligated to appoint a successor Issuing Entity Administrator. The Issuing Entity may also remove the Issuing Entity Administrator if the Issuing Entity Administrator ceases to be eligible to continue as such under the Sale and Servicing Agreement or if the Issuing Entity Administrator becomes incapable of acting, bankrupt, insolvent or if a receiver takes charge of the Issuing Entity Administrator or its property. Upon such resignation or removal of the Issuing Entity Administrator, the Issuing Entity will be entitled to appoint a successor Issuing Entity Administrator. Any resignation or removal of the Issuing Entity Administrator and appointment of a successor Issuing Entity Administrator will not become effective until acceptance of the appointment by the successor Issuing Entity Administrator. If at any time [___________] resigns, or transfers or assigns its rights and obligations, or is removed as Master Servicer, then at such time, [__________] will resign as Issuing Entity Administrator.

[Disclosure regarding the Issuing Entity Administrator’s experience serving as an issuing entity administrator in the securitization of similar asset types to be provided for each transaction.]

The Bond Trustee

[___________________] will be the Bond Trustee under the Indenture. The Bond Trustee’s on going fees for its services will be paid by the Master Servicer. The Bond Trustee will be entitled to reimbursement from the Trust for expenses and certain other amounts prior to payment of any amounts to Bondholders. The Bond Trustee’s Corporate Trust Office is located at [___________________], or any other address that the Bond Trustee may designate from time to time by notice to the Bondholders, the Owner Trustee, the Depositor, the Issuing Entity Administrator, the Master Servicer and the Servicer.

[Disclosure regarding the Bond Trustee’s experience serving as a trustee or bond trustee in the securitization of similar asset types to be provided for each transaction.]

The Bond Trustee’s functions, duties and responsibilities are described under [“The Agreements — The Bond Trustee]” in the prospectus. As compensation for its services, the Bond Trustee will be paid [________________], as set forth under “Fees and Expenses of the Issuing Entity” below.

The Issuing Entity

On the closing date, and until the termination of the issuing entity pursuant to the indenture, [Sequoia Mortgage Loan Trust [______________]] (the “issuing entity”) will be a [statutory trust formed under the laws of the State of Delaware] [or] [common law trust formed under the laws of the State of New York]. The issuing entity will be created under the indenture by the depositor for the sole purpose of issuing the bonds and the investor certificate and its assets will consist of the trust fund.

On the closing date, the assets included in the trust fund will be the only assets of the issuing entity. The issuing entity will not have any liabilities as of the closing date, other than as provided in the indenture. The fiscal year end of the issuing entity will be December 31 of each year.

The issuing entity will not have any employees, officers or directors. The owner trustee, the bond trustee, the depositor, the master servicer, the issuing entity administrator, the servicer and each custodian will act on behalf of the issuing entity, and may only perform those actions on behalf of the issuing entity that are specified in the indenture, the servicing agreement or the custodial agreements, as set forth in this prospectus supplement.

The Custodian

[____________] will be the Custodian under the Custodial Agreement. The Custodian’s on going fees for its services will be paid by the Master Servicer. The Custodian will be entitled to reimbursement from the Trust for expenses and certain other amounts prior to payment of any amounts to Bondholders.

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[Disclosure regarding the Custodian’s experience serving as a custodian in the securitization of similar asset types to be provided for each transaction.]

FEES AND EXPENSES OF THE ISSUING ENTITY 

In consideration of their duties on behalf of the issuing entity, the servicer, the master servicer, the issuing entity administrator, the bond trustee, the owner trustee and the custodian(s) will receive from the assets of the issuing entity certain fees as set forth in the following table:

	Frequency		How and When
Fee Payable to:	of Payment:	Amount of Fee:	Fee Is Payable:
Servicer	[Monthly]	A monthly fee paid to the servicer, from amounts that would otherwise be distributed to bondholders in respect of interest, calculated on the outstanding principal balance of each mortgage loan, at the applicable servicing fee rate, plus, all income earned on amounts on deposit in the custodial account.	[Withdrawn from the custodial account in respect of each mortgage loan before distribution of any amounts to bondholders.]
Master Servicer	[Monthly]	All investment earnings on amounts on deposit in the collection account.	[Retained by the master servicer from the collection account before distribution of any amounts to bondholders.]
Issuing Entity Administrator	[Monthly]	A monthly fee paid to the issuing entity administrator, from the master servicing fee.	[Paid by the master servicer from the master servicing fee.]
Bond Trustee	[Monthly]	A fixed annual fee of $[__________].	[Paid by the master servicer from the master servicing fee pursuant to a separate agreement between the trustee and the master servicer.]
Owner Trustee	[Monthly]	A fixed annual fee of $[________].	[Payable from investment earnings on amounts on deposit in the Collection Account.]
Custodian(s)	[Monthly]	A monthly fee paid to each custodian, from the master servicing fee.	[Paid by the master servicer from the master servicing fee.]

The custodial fees set forth in the table above may not be increased without amendment of the related custodial agreement. The servicing fees set forth in the table above may not be increased without amendment of the servicing agreement as described under “ — Servicing — Amendment of the Servicing Agreements” above. None of the other fees set forth in the table above may be changed without amendment of the indenture as described under “The Agreements — Certain Matters Under the Indenture — Amendment of the Indenture” above.

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[Expenses of the servicer, the master servicer, the issuing entity administrator, the bond trustee, the owner trustee and the custodian(s) will be reimbursed before payments are made on the bonds.]

[May vary in accordance with the structure of the transaction.]

MATERIAL LEGAL PROCEEDINGS 

At the date of this prospectus supplement, other than litigation in the ordinary course of business, such as litigation involving foreclosures or other exercise of its rights as a creditor, and other than as described below, there were no material pending legal proceedings to which any of the sponsor, the seller, the depositor or the issuing entity was a party or of which any of their property was subject, and, other than as described below, the depositor is not aware of any material pending legal proceedings known to be contemplated by governmental authorities against the sponsor, the seller, the depositor or the issuing entity.

On December 23, 2009, the Federal Home Loan Bank of Seattle (the “FHLB-Seattle”) filed a claim in Superior Court for the State of Washington (case number 09-2-46348-4 SEA) against the depositor, Redwood Trust, Inc., Morgan Stanley & Co., and Morgan Stanley Capital I, Inc. (collectively, the “FHLB-Seattle Defendants”). The FHLB-Seattle alleges claims under the Securities Act of Washington (Section 21.20.005, et seq.) and seeks to rescind the purchase of a mortgage pass-through certificate (or, residential mortgage backed securities, “RMBS”) issued as part of the Sequoia Mortgage Trust 2005-4 (“SEMT 2005-4”) securitization transaction and purchased by the FHLB-Seattle. The FHLB-Seattle seeks to collect interest on the original purchase price at the statutory interest rate of 8% per annum from the date of original purchase (net of interest received), as well as attorneys’ fees and costs. On June 10, 2010, the FHLB-Seattle filed an amended complaint. Subsequently, on October 18, 2010, the FHLB-Seattle Defendants filed motions to dismiss the FHLB-Seattle’s complaint. Redwood Trust, Inc. and the depositor additionally moved to dismiss the complaint for lack of personal jurisdiction. The FHLB-Seattle alleges that the FHLB-Seattle Defendants’ offering materials for the SEMT 2005-4 RMBS contained materially untrue statements and omitted material facts about the SEMT 2005-4 RMBS and the credit quality of the mortgage loans that backed the SEMT 2005-4 RMBS. Among other things, the FHLB-Seattle alleges that the FHLB-Seattle Defendants made untrue statements or omissions regarding (1) the loan-to-value ratios of the mortgage loans that backed the SEMT 2005-4 RMBS and the appraisals of the properties that secured them, (2) the occupancy status of those properties, (3) the underwriting standards of the originators of the mortgage loans that backed the SEMT 2005-4 RMBS, and (4) the ratings assigned to the SEMT 2005-4 RMBS. In a series of rulings issued between June 23, 2011 and August 15, 2011, the Washington State Superior Court dismissed the allegations relating to occupancy status and denied other grounds for dismissal. On July 19, 2011, the Court granted Redwood Trust, Inc. and the depositor’s motion to dismiss for lack of personal jurisdiction. Redwood Trust, Inc. and the depositor do not know whether the FHLB-Seattle will appeal or otherwise contest the dismissal, or file a claim in another jurisdiction. The SEMT 2005-4 RMBS that is the subject of the FHLB-Seattle’s claim was issued with an original principal amount of approximately $133 million and, as of December 31, 2011, had a remaining outstanding principal balance of approximately $28.3 million. The depositor and Redwood Trust, Inc. believe that the claims against them in this matter are without merit and intend to defend the action vigorously. On July 19, 2011, the Court granted Redwood Trust, Inc. and the depositor’s motion to dismiss for lack of personal jurisdiction. The FHLB-Seattle’s claims against the underwriters of this RMBS were not dismissed for lack of personal jurisdiction. Redwood Trust, Inc. and the depositor do not know whether FHLB-Seattle will appeal or otherwise contest the dismissal, or file a claim in another jurisdiction.

On August 18, 2010, the depositor received service of process with respect to a case filed on July 15, 2010 in Superior Court for the State of California in San Francisco (case number CGC-10-501610) by The Charles Schwab Corporation (“Schwab”). In the claim, Schwab is suing the depositor and 26 other named defendants (collectively, the “Schwab Defendants”) in relation to RMBS sold or issued by the Schwab Defendants. With respect to the depositor, Schwab alleges a cause of action of negligent misrepresentation under California state law and seeks unspecified damages and attorneys’ fees and costs with respect to a RMBS issued as part of the SEMT 2005-4 securitization transaction (which is the same securitization transaction at issue in the litigation initiated by the FHLB-Seattle described in the preceding paragraph). Among other things, Schwab alleges that the offering materials for the SEMT 2005-4 RMBS contained materially untrue statements or omissions about the SEMT 2005-4 RMBS and the loans securitized in this securitization transaction, including untrue statements or omissions regarding (1) the loan-to-value ratios of the mortgage loans that backed the SEMT 2005-4 RMBS and the appraisals of the properties that secured them, (2) the occupancy status of those properties, (3) the underwriting standards of the originators of the mortgage loans that backed the SEMT 2005-4 RMBS, and (4) the ratings assigned to the SEMT 2005-4 RMBS. On September 22, 2011, the Schwab Defendants moved to dismiss the complaint, which motions are now pending. The RMBS that is the subject of Schwab’s cause of action was issued with an original principal amount of approximately $14.8 million and, as of December 31, 2011, had a remaining outstanding principal balance of approximately $3.1 million. The depositor believes that the claims against it in this matter is without merit and intends to defend the action vigorously.

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On October 15, 2010, the Federal Home Loan Bank of Chicago (the “FHLB-Chicago”) filed a claim in the Circuit Court of Cook County, Illinois (case number 10-CH-45033) against the depositor and more than 45 other named defendants (collectively, the “FHLB-Chicago Defendants”) in relation to RMBS sold or issued by the FHLB-Chicago Defendants or by entities controlled by the FHLB-Chicago Defendants. In an amended complaint filed on March 16, 2011, FHLB-Chicago added as defendants Redwood Trust, Inc. and another one of its subsidiaries, RWT Holdings, Inc. With respect to Redwood Trust, Inc. and the depositor, the FHLB-Chicago alleges that the offering materials for two RMBS issued as part of the Sequoia Mortgage Trust 2006-1 (“SEMT 2006-1”) securitization transaction contained untrue and misleading statements and material representations in violation of Illinois Securities Law (815 ILCS Sections 5/12(F)-(H)) and North Carolina Securities Law N.C.G.S.A. §78A-8(2) & §78A-56(a)) and alleges claims of negligent misrepresentations under Illinois common law. On some of the causes of action, the FHLB-Chicago seeks to rescind the purchase of these RMBS and to collect interest on the original purchase price at the statutory interest rate of 10% per annum from the date of original purchase (net of interest received). On one cause of action, the FHLB-Chicago seeks unspecified damages. The FHLB-Chicago also seeks attorneys’ fees and costs. Among other things, the FHLB-Chicago alleges that the offering materials for the SEMT 2006-1 RMBS contained materially untrue statements or omissions regarding the SEMT 2006-1 RMBS and the loans securitized in this securitization transaction, including untrue statements or omissions regarding (1) the loan-to-value ratios the mortgage loans that backed the SEMT 2006-1 RMBS and the appraisals of the properties that secured them, (2) the occupancy status of those properties, (3) the underwriting standards of the originators of the mortgage loans that backed the SEMT 2006-1 RMBS, (4) the ratings assigned to the SEMT 2006-1 RMBS, and (5) the due diligence performed on the mortgage loans that backed the SEMT 2006-1 RMBS. The first of these two SEMT 2006-1 RMBS was issued with an original principal amount of approximately $105 million and, as of December 31, 2011, had a remaining outstanding principal balance of approximately $42.1 million. The second of these two SEMT 2006-1 RMBS was issued with an original principal amount of approximately $379 million and, as of December 31, 2011, had a remaining outstanding principal balance of approximately $151.7 million. On March 27, 2011, the FHLB-Chicago Defendants moved to dismiss the amended complaint, which motions are now pending. Redwood Trust, Inc, RWT Holdings, Inc. and the depositor believe that the claims against them in this matter are without merit and intend to defend the action vigorously.

The business of the sponsor, the depositor, the seller and their affiliates has included, and continues to include, activities relating to the acquisition and securitization of residential mortgage loans. In addition, the business of the sponsor has, in the past, included activities relating to the acquisition and securitization of debt obligations and other assets through the issuance of collateralized debt obligations (commonly referred to as CDO transactions). Because of their involvement in the securitization and CDO businesses, the sponsor, the depositor, the seller and their affiliates could become the subject of litigation relating to these businesses, including additional litigation of the type described above, and could also become the subject of governmental investigations, enforcement actions, or lawsuits and governmental authorities could allege that these entities violated applicable law or regulation in the conduct of their business.

In fact, the sponsor and its affiliates have received, and responded to, information requests and subpoenas from two governmental authorities (one by the SEC relating to the sponsor’s CDO business and one by the National Credit Union Administration relating to a residential mortgage securitization conducted by the sponsor and the depositor). It is possible that the sponsor, the depositor, the seller or their affiliates might not be successful in defending or responding to any litigation, governmental investigation or related action and any losses incurred as a result of the resolution of any such action or investigation could have a material adverse effect on the sponsor, the depositor, the seller or their affiliates. In any case, regardless of the merits of any allegation or legal action that may be brought against the sponsor, the depositor, the seller or their affiliates, or of their success in defending against such allegations or legal actions, the costs of defending against any such allegation or legal action may be significant or material and could have a material adverse effect on the sponsor, the depositor, the seller or their affiliates.

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THE SPONSOR AND THE SELLER 

Sponsor General. RWT Holdings, Inc. (“RWT Holdings” or the “Sponsor”), is a Delaware corporation and wholly-owned subsidiary of Redwood Trust, Inc. and is headquartered in Mill Valley, California. RWT Holdings has acquired residential mortgage loans, directly or indirectly, from the originators since it was organized in February 1998. RWT Holdings been active as a sponsor in the securitization market since 2002. As a sponsor, RWT Holdings acquires, directly or indirectly through its subsidiaries, residential mortgage loans in the secondary mortgage market and initiates the securitization of the loans it acquires by transferring the mortgage loans to the depositor, which loans will ultimately be transferred to the issuing entity for the related securitization.

As of [_____________, 200_], RWT Holdings has sponsored the securitization of approximately $[____] billion of residential mortgage loans ($[_______] in 201[_], $[_______] in 201[_], $[______] in 201[_], $[_______] in 201[_] and $[_________] in 201[_]). RWT Holdings buys residential mortgage loans under several loan purchase agreements from mortgage loan originators or sellers nationwide that meet its seller/servicer eligibility requirements. We refer you to “Loan Program—Qualifications of Sellers” in the prospectus for a general description of the characteristics used to determine eligibility of collateral sellers. Prior to acquiring the mortgage loans, RWT Holdings conducts a review of the related mortgage loan seller and of the mortgage loans. RWT Holdings has developed a quality control program to monitor the quality of loan underwriting at the time of acquisition and on an ongoing basis. All loans purchased will be subject to this quality control program. RWT Holdings in certain cases submits a sample of mortgage loans to a third party nationally recognized underwriting review for a compliance check of underwriting and review of income, asset and appraisal information. None of the Sponsor’s prior securitizations have defaulted and RWT Holdings has not experienced an early amortization triggering event in any of its prior securitizations.

RWT Holdings acquires, directly or indirectly through its subsidiaries, mortgage loans secured by first and second liens on one- to four- family residential properties. As a sponsor, RWT Holdings initiates their securitization by transferring the mortgage loans to the depositor, which loans will ultimately be transferred to the issuing entity for the related securitization. RWT Holdings works in coordination with the underwriters and rating agencies in structuring each securitization transaction. RWT Holdings does not currently service mortgage loans but rather contracts with third party servicers for servicing the mortgage loans that it acquires. Third party servicers are assessed based upon the servicing rating and the credit quality of the servicing institution, as well as for their systems and reporting capabilities, review of collection procedures and confirmation of servicers’ ability to provide detailed reporting on the performance of the securitization pool.

Sponsor’s Pre-Offering Review of the Mortgage Loans.  The Sponsor conducted a review of the mortgage loans included in the mortgage pool for the purpose of providing reasonable assurance that the disclosure regarding the mortgage pool in this prospectus supplement is accurate in all material respects. [In conducting the review, the Sponsor engaged third parties to assist it with certain elements of the review.] The review conducted by the Sponsor[, including the portions of the review conducted with the assistance of the third parties,] is referred to herein as the “Sponsor’s Pre-Offering Review.” The Sponsor determines the nature, extent and timing of the Sponsor’s Pre-Offering Review and the level of assistance provided by any third party. The Sponsor does not attribute any of the findings and conclusions of the Sponsor’s Pre-Offering Review to any of the third parties. The results of the review prepared by the third parties engaged by the Sponsor will generally be shared with the underwriters.

[……………..]

Rule 15Ga-1 Repurchases. Information concerning all assets securitized by the Sponsor that were the subject of a demand to repurchase or replace for breach of the representation and warranties is set forth in Annex A attached to this prospectus supplement in a table under the heading “15Ga-1 Repurchases.” The most recent Form ABS-15G filed by the Sponsor, as the securitizer (CIK: 0001530239), was filed on ________, 201__, covers the period January 1, 2011 to ________ __, 201_) and is available online at http://www.sec.gov.

Seller. Redwood Residential Acquisition Corporation (“RRAC” or the “Seller”), is a Delaware corporation and wholly owned subsidiary of RWT Holdings and Redwood Trust, Inc., headquartered in Mill Valley, California. Descriptions of, and references to, RWT Holdings’ acquisition of residential mortgage loans include the acquisition of such loans by RRAC. RRAC was organized in 2009 and commenced its business of acquiring residential mortgage loans for securitization in July 2010. RRAC is licensed to acquire residential mortgage loans and related mortgage servicing rights in states where such a license is required. RRAC does not originate or service loans, is not a seller/servicer approved by Fannie Mae or Freddie Mac, is not a mortgagee approved by the FHA, and is not an insured depository institution. On the closing date for each series of securities where RRAC is acting as seller, RRAC will sell all of its interest in the related mortgage loans to the depositor.  RWT Holdings and RRAC work in coordination with the underwriters and rating agencies in structuring each securitization transaction.  RWT Holdings and RRAC do not currently service mortgage loans but rather contract with third-party servicers for servicing the mortgage loans that they acquire.  Third-party servicers are assessed based upon the servicing rating and credit quality of the servicing institution, as well as for their systems and reporting capabilities, review of collection procedures and confirmation of servicers’ ability to provide detailed reporting on the performance of the securitization pool.

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THE DEPOSITOR 

[Sequoia Mortgage Funding Corporation] [or] [Sequoia Residential Funding, Inc.], a Delaware corporation and indirect wholly-owned subsidiary of Redwood Trust, Inc. (the “Depositor”), was organized in September 1999 and is headquartered in Mill Valley, California. The depositor has been engaged since the end of 2001 in the securitization of mortgage loans of the types described in the accompanying prospectus. Since 2002, Sequoia Residential Funding, Inc. has been the depositor on 30 securitization deals that have issued approximately $[____] billion of residential mortgage loans ($[__________] in 201[_], $[_________] in 201[_], $[___________] in 201[_], $[________] in 201[_]and $[__________] worth of residential mortgage-backed securities.

The certificate of incorporation of the depositor limits its activities to those necessary or convenient to carry out its securitization activities. The depositor will have limited obligations with respect to a series of securities. The depositor will obtain the mortgage loans from the sponsor/seller and on the closing date will assign all of its interest in the mortgage loans to the trustee for the benefit of bondholders. In addition, after the issuance of a series of securities, the depositor will have certain obligations with respect to such series, such as the repurchase of mortgage loans as to which there is defective or incomplete documentation or a breach of a representation or warranty, and may have certain approval or consent rights as described in this prospectus supplement.

AFFILIATIONS AND RELATED TRANSACTIONS 

[Whether, and how, the Sponsor, Depositor and/or Issuing Entity is an affiliate of any of the following parties as well as, to the extent known and material, whether, and how, any of the following parties are affiliates of any of the other following parties, will be described, if applicable: any Servicer or any other entity involved in the servicing function, including the Master Servicer and the Issuing Entity Administrator; the Bond Trustee; the Owner Trustee; any Originator; any significant obligor contemplated by Item 1112 of Regulation AB; any enhancement or support provider contemplated by Items 1114 or 1115 of Regulation AB; and any other material party related to the Offered Bonds and contemplated by Item 1100(d)(1) of Regulation AB.]

[The general character of any business relationship or arrangement that is entered into outside the ordinary course of business or on terms other than would be obtained in an arm’s length transaction with an unrelated third party, apart from the establishment of the Trust and the issuance of the Bonds, between any of the parties listed in the preceding paragraph, or any affiliates of such parties, that currently exists or that existed during the past two years and that is material to an investor’s understanding of the Bonds, will be described, if applicable.]

[To the extent material, any specific relationships involving or relating to the Offered Bonds or the Mortgage Pool, including the material terms and approximate dollar amount involved, between or among any of the parties listed in the first paragraph of this section, or any affiliates of such parties, that currently exists or that existed during the past two years, will be described, if applicable.]

THE ORIGINATOR(S) 

[_______________________] originated the mortgage loans, directly or through its correspondents. [All Originator(s) of 10% or more of the pool assets to be identified.]

[________________ originated 20% or more of the pool assets.] [Description of the Originator(s)’ [that originated 20% or more of the pool assets] origination program and prior experience to be provided as applicable.]

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[Identify in Annex A by named Originator (and in the aggregate for all Originators of less than 10% of pool assets): Number and aggregate principal amount of “exception loans” (to be defined in this section). Also, insert narrative summary disclosure of the characteristics of the exception loans and general disclosure of Originator’s underwriting guidelines and exceptions allowed.]

THE MASTER SERVICER AND THE SERVICER 

Master Servicer

[____________________] is a [_______________] with executive offices located at [________________] [and master servicing offices located at [_________________]].  The Master Servicer is engaged in the business of [master servicing single-family residential mortgage loans secured by properties located in all 50 states and the District of Columbia].

The Servicer or the Subservicer will directly service the Mortgage Loans under the supervision of the Master Servicer. The Master Servicer, however, will not be ultimately responsible for the servicing of the Mortgage Loans except to the extent described under “Mortgage Loan Servicing” below.

Servicer

[As applicable, provide updated information with respect to (i) whether any prior securitizations of the same asset type involving the Servicer or Subservicer have defaulted or experienced an early amortization or other performance triggering event because of servicing or (ii) whether there has been previous disclosure of material noncompliance with servicing criteria with respect to other securitizations involving the Servicer or Subservicer.] [To the extent that there is a material risk that the Servicer’s or Subservicer’s financial condition could have a material impact on pool performance or performance of the securities, information regarding the Servicer’s or Subservicer’s, as applicable, financial condition will be included here.]

[Insert description of all affiliated and unaffiliated Servicer[s] or Subservicer[s] that service 10% or more of the pool assets, or of any other material servicer identified]

[Insert the following information with respect to any servicer or subservicer: (i) how long the servicer/subservicer has been servicing assets in general and specifically the assets of the type included in the current transaction, (ii) material changes to the servicer’s/subservicer’s policies and procedures in servicing assets of the same type over the past three years, (iii) to the extent material, information regarding the size, composition and growth of the servicer’s/subservicer’s portfolio of serviced assets of the type to be securitized and information on factors related to the servicer/subservicer that may be material to an analysis of the servicing of the assets or the securities, as applicable, (iv) whether any prior securitizations of the same asset type involving the servicer/subservicer have defaulted or experienced an early amortization or other performance triggering event because of servicing, (v) the extent of outsourcing the servicer/subservicer utilizes or (vi) whether there has been previous disclosure of material noncompliance with servicing criteria with respect to other securitizations involving the servicer/subservicer.] [To the extent that there is a material risk that the Servicer’s or Subservicer’s financial condition could have a material impact on pool performance or performance of the securities, information regarding the Servicer’s or Subservicer’s, as applicable, financial condition will be included here.]

Delinquency and Foreclosure Experience.

[To be inserted for each Servicer as applicable.]

[The following tables set forth the delinquency and foreclosure experience of first and second lien adjustable rate residential mortgage loans originated by and serviced by [Servicer] on behalf of securitization trusts and third parties for whom [Servicer] is servicing similar mortgage loan products, as of the certain dates indicated, each date having a separate table of data. There can be no assurance, and no representation is made, that the delinquency and foreclosure experience with respect to the Mortgage Loans will be similar to that reflected in the tables below, nor is any representation made as to the rate at which losses may be experienced on liquidation of defaulted Mortgage Loans. In addition, because the delinquency and foreclosure experience of the mortgage loans in the tables below only reflects such experience as of the end of the previous [_____] calendar quarters, such data may not be reflective of the delinquency and foreclosure experience of the mortgage loans to be expected over an extended period of time.  Accordingly, the information should not be considered to reflect the credit quality of the Mortgage Loans, or as a basis for assessing the likelihood, amount or severity of losses on the Mortgage Loans.

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The actual loss and delinquency experience on the Mortgage Loans will depend, among other things, upon the value of the real estate securing such Mortgage Loans, interest rates, economic conditions and the ability of borrowers to make required payments.]

Delinquencies and Foreclosures⁽¹⁾

	As of [____________________________]
					Percent by			Percent by
	Number of		Principal		Principal			Number of
	Loans		Balance		Balance			Loans
Current Loans		[__]	$	[__]		[___]	%		[___]	%
Period of Delinquency(2)
30 to 59 days		[__]		[__]		[___]	%		[___]	%
60 to 89 days		[__]		[__]		[___]	%		[___]	%
90 days or more		[__]		[__]		[___]	%		[___]	%
Foreclosures/ Bankruptcies(3)		[__]		[__]		[___]	%		[___]	%
Real Estate Owned		[__]		[__]		[___]	%		[___]	%
Total Portfolio		[__]		[__]		[___]	%		[___]	%

	As of [____________________________]
					Percent by			Percent by
	Number of		Principal		Principal			Number of
	Loans		Balance		Balance			Loans
Current Loans		[__]	$	[__]		[___]	%		[___]	%
Period of Delinquency(2)
30 to 59 days		[__]		[__]		[___]	%		[___]	%
60 to 89 days		[__]		[__]		[___]	%		[___]	%
90 days or more		[__]		[__]		[___]	%		[___]	%
Foreclosures/ Bankruptcies(3)		[__]		[__]		[___]	%		[___]	%
Real Estate Owned		[__]		[__]		[___]	%		[___]	%
Total Portfolio		[__]		[__]		[___]	%		[___]	%

	As of [____________________________]
					Percent by			Percent by
	Number of		Principal		Principal			Number of
	Loans		Balance		Balance			Loans
Current Loans		[__]	$	[__]		[___]	%		[___]	%
Period of Delinquency(2)
30 to 59 days		[__]		[__]		[___]	%		[___]	%
60 to 89 days		[__]		[__]		[___]	%		[___]	%
90 days or more		[__]		[__]		[___]	%		[___]	%
Foreclosures/ Bankruptcies(3)		[__]		[__]		[___]	%		[___]	%
Real Estate Owned		[__]		[__]		[___]	%		[___]	%
Total Portfolio		[__]		[__]		[___]	%		[___]	%

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	As of [____________________________]
					Percent by			Percent by
	Number of		Principal		Principal			Number of
	Loans		Balance		Balance			Loans
Current Loans		[__]	$	[__]		[___]	%		[___]	%
Period of Delinquency(2)
30 to 59 days		[__]		[__]		[___]	%		[___]	%
60 to 89 days		[__]		[__]		[___]	%		[___]	%
90 days or more		[__]		[__]		[___]	%		[___]	%
Foreclosures/ Bankruptcies(3)		[__]		[__]		[___]	%		[___]	%
Real Estate Owned		[__]		[__]		[___]	%		[___]	%
Total Portfolio		[__]		[__]		[___]	%		[___]	%

	As of [____________________________]
					Percent by			Percent by
	Number of		Principal		Principal			Number of
	Loans		Balance		Balance			Loans
Current Loans		[__]	$	[__]		[___]	%		[___]	%
Period of Delinquency(2)
30 to 59 days		[__]		[__]		[___]	%		[___]	%
60 to 89 days		[__]		[__]		[___]	%		[___]	%
90 days or more		[__]		[__]		[___]	%		[___]	%
Foreclosures/ Bankruptcies(3)		[__]		[__]		[___]	%		[___]	%
Real Estate Owned		[__]		[__]		[___]	%		[___]	%
Total Portfolio		[__]		[__]		[___]	%		[___]	%

(1)	These tables show mortgage loans which were delinquent or for which foreclosure proceedings had been instituted as of the date indicated.
(2)	No mortgage loan is included in this table as delinquent until it is 30 days past due.
(3)	Exclusive of the number of loans and principal balance shown in the period of delinquency.

ADMINISTRATION OF THE ISSUING ENTITY 

Servicing and Administrative Responsibilities

The Subservicer, the Servicer, the Master Servicer, the Issuing Entity Administrator, the Owner Trustee, the Bond Trustee and the Custodian will have the following responsibilities with respect to the Trust:

[Subservicer] [Servicer]. Performing the servicing functions with respect to the Mortgage Loans and the Mortgaged Properties in accordance with the provisions of the Subservicing Agreement, including, but not limited to:

· [collecting monthly remittances of principal and interest on the Mortgage Loans from the related borrowers, depositing such amounts (net of the related servicing fees) in the Servicing Account, and delivering all amounts on deposit in the Servicing Account to the Master Servicer for deposit in the Collection Account on the Servicer Remittance Date;

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· collecting amounts in respect of taxes and insurance from the related borrowers, depositing such amounts in the related escrow account, and paying such amounts to the related taxing authorities and insurance providers, as applicable;

· making Monthly Advances with respect to delinquent payments of principal and interest on the Mortgage Loans;

· making Servicing Advances in respect of reasonable and customary “out of pocket” costs and expenses;

·	providing monthly loan-level reports to the [Servicer] and the Master Servicer;
·	maintaining certain insurance policies relating to the Mortgage Loans; and
·	initiating foreclosure proceedings.]
We refer you to “Mortgage Loan Servicing” below.

[Servicer]. [Contractually responsible for the servicing of the Mortgage Loans pursuant to the terms of the Sale and Servicing Agreement. [Monitors the performance of the Subservicer under the Subservicing Agreement, including but not limited to:

· verifying that the Subservicer’s reporting and remitting are mathematically accurate and are being performed in accordance with the terms of the Sale and Servicing Agreement;

· verifying that the Servicing Account reconciliations are being performed according to Uniform Single Attestation Program for Mortgage Bankers guidelines;

· monitoring the Delinquency Rate and identifying any substantial increases or decreases on a monthly basis; and

· performing the servicing functions with respect to Mortgage Loans described under “Subservicer” above in the event that the Subservicer fails to perform such functions.

We refer you to “Mortgage Loan Servicing” below.]

Master Servicer. Performing the master servicing functions in accordance with the provisions of the Sale and Servicing Agreement, including but not limited to:

· [[monitoring the Servicer’s performance and enforcing the Servicer’s obligations under the Sale and Servicing Agreement;]

· collecting monthly remittances from or on behalf of the Servicer for deposit in the Collection Account on the Servicer Remittance Date and delivering all amounts on deposit in the Collection Account to the Paying Agent for deposit in the Bond Payment Account on the Master Servicer Remittance Date;

· gathering the monthly loan-level reports delivered by or on behalf of the Servicer and providing a comprehensive loan-level report to the Issuing Entity Administrator with respect to the Mortgage Loans;

· upon the occurrence of a Servicer event of default under the Sale and Servicing Agreement, at its discretion, terminating the Servicer;

· upon the termination of the Servicer under the Sale and Servicing Agreement, appointing a successor servicer or succeeding as Servicer; and

· upon the Master Servicer’s becoming the successor Servicer and in the event the terminated Servicer failed to make Advances with respect to a Mortgage Loan, making those Advances to the extent provided in the Sale and Servicing Agreement.]

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We refer you to “Mortgage Loan Servicing” below.

Issuing Entity Administrator. Performing the issuing entity administrator functions in accordance with the provisions of the Administration Agreement, the Sale and Servicing Agreement, the Trust Agreement and the Indenture, including but not limited to:

· [acting as Bond Registrar and Paying Agent;

· receiving monthly remittances from the Master Servicer for deposit in the Bond Payment Account;

· distributing all amounts on deposit in the Bond Payment Account in accordance with the priorities described under “Description of the Bonds—Payments of Interest,” “—Payments of Principal” and “—Credit Enhancement—Application of Monthly Excess Cashflow” on each Payment Date;

· performing the calculation of accrual of original issue discount and the amortization of premium on the Securities;

· preparing and making available on its website a payment statement to Securityholders based on information received from the Servicer and the Master Servicer; and

· preparing and filing periodic reports with the Securities and Exchange Commission on behalf of the Issuing Entity with respect to the Bonds.]

We refer you to “The Mortgage Loan Purchase Agreement and the Sale and Servicing Agreement — Administration,” “— Reports to Securityholders” and “The Trust Agreement and the Indenture — Administration” below.

Owner Trustee. Performing the owner trustee functions in accordance with the provisions of the Trust Agreement, or causing the Issuing Entity Administrator or the Depositor to perform such functions, pursuant to the Administration Agreement, including but not limited to:

· [discharging (or causing to be discharged) all of its responsibilities pursuant to the terms of the Trust Agreement and the other document or agreement to which the Issuing Entity or the Owner Trustee is a party and administering the Trust (or causing it to be administered) in the interest of the Residual Holder, subject to each such respective document or agreement and in accordance with the provisions of the Trust Agreement; and

· taking direction from the Residual Holder regarding the management of the Trust.]

We refer you to “The Trust Agreement and the Indenture — Certain Matters Under the Agreements — Duties of the Owner Trustee” below.

Bond Trustee. Performing the bond trustee functions in accordance with the provisions of the Indenture, or causing the Issuing Entity Administrator to perform such functions, pursuant to the Administration Agreement, including but not limited to:

· [examining certificates, statements and opinions required to be furnished to it to ensure they are in the form required under the Indenture;

· enforcing the obligations of each of the Master Servicer and the Issuing Entity Administrator under the Sale and Servicing Agreement, the Indenture and the Administration Agreement, as applicable;

· upon the occurrence of a Master Servicer event of default under the Sale and Servicing Agreement, at its discretion (or if so directed by the Residual Holder or Bondholders having more than 50% of the voting rights applicable to each Class of Bonds affected thereby), terminating the Master Servicer; and

· upon such termination of the Master Servicer under the Sale and Servicing Agreement, appointing a successor Master Servicer or succeeding as Master Servicer.]

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We refer you to “The Trust Agreement and the Indenture—Certain Matters Under the Agreements—Duties of the Bond Trustee” below.

Custodian. Performing the custodial functions in accordance with the provisions of the Sale and Servicing Agreement, including but not limited to:

· [holding and maintaining the Mortgage Loan documents related to the Mortgage Loans on behalf of the Bond Trustee.]

We refer you to “The Agreements—The Custodial Agreement” in the prospectus.

Issuing Entity Accounts

All amounts in respect of principal and interest received from the borrowers or other recoveries in respect of the Mortgage Loans [and payments received from the Swap Counterparty under the Swap Agreements] will, at all times before payment thereof to the Bondholders, be invested in the [Servicing Account, the Collection Account, [the Swap Payment Account], [the Cap Account] and the Bond Payment Account, which accounts will be established in the name of the Bond Trustee, and the Collection Account, which account shall be established in the name of the Issuing Entity Administrator]. Funds on deposit in the Issuing Entity Accounts may be invested by the party responsible for such

Issuing Entity Account in Eligible Investments. The Issuing Entity Accounts will be established by the applicable parties listed below, and any investment income earned on each Issuing Entity Account will be retained or distributed as follows:

Issuing Entity
Account	Responsible Party:	Application of any Investment Earnings:
Servicing Account	Servicer (or Subservicer on its behalf)	[Any investment earnings (net of any losses realized) will be paid as compensation to the Servicer (or, if the account is maintained by the Subservicer, the Subservicer) and will not be available for payments to Bondholders.]
Collection Account	Master Servicer	[Any investment earnings (net of the Bond Trustee Fee, the Owner Trustee Fee, the Custodian Fee and any losses realized) will be paid as compensation to the Master Servicer and will not be available for payments to Bondholders.]
Bond Payment Account	Issuing Entity Administrator	[Any investment earnings (net of the Bond Trustee Fee, the Owner Trustee Fee, the Custodian Fee and any losses realized) will be paid as compensation to the Master Servicer, and will not be available for payments to Bondholders.]
Collection Account	Issuing Entity Administrator	[Amounts on deposit in the Collection Account will not be invested.]
[Swap Payment Account]	[Issuing Entity Administrator]	[Amounts on deposit in the Swap Payment Account will not be invested.]
[Cap Account]	[Issuing Entity Administrator]	[Amounts on deposit in the Swap Payment Account will not be invested.]
[Capitalized Interest Account]	[Issuing Entity Administrator]	[Any investment earnings (net of any losses realized) will be paid to the Depositor and will not be available for payments to Bondholders.]
[Pre-Funding Account]	[Issuing Entity Administrator]	[Any investment earnings (net of any losses realized) will be paid to the Depositor and will not be available for payments to Bondholders.]

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If funds deposited in the [Servicing Account, the Collection Account, the Bond Payment Account, the Collection Account, [the capitalized interest account], [the pre-funding account]] are invested by the responsible party identified in the table above, the amount of any net losses incurred in respect of any such investments will be deposited in the related Issuing Entity Account by such responsible party, or in the case of the Bond Payment Account, the Master Servicer, out of its own funds, without any right of reimbursement therefor.

Example of Payments

The following sets forth an example of collection of payments from borrowers on the Mortgage Loans, transfer of amounts among the Issuing Entity Accounts and payments on the Bonds for the Payment Date in [_____]:

[_____]	Collection Period:	[Payments due during the related Collection Period ([___]  through [____]) from borrowers will be deposited in the Servicing Account as received and will include scheduled principal and interest payments due during the related Collection Period.]
[_____]	Prepayment Period for partial and full prepayments received from Mortgage Loans:	[Partial principal prepayments and principal prepayments in full received by the Servicer during the related Prepayment Period ([____] through [____]) will be deposited into the Servicing Account for remittance to the Master Servicer on the Servicer Remittance Date ([____] [18]).]
[____] [18]	Servicer Remittance Date:	[The Servicer will remit collections and recoveries in respect of the Mortgage Loans to the Master Servicer for deposit into the Collection Account on or prior to the [18]th day of each month (or if the [18]th day is not a Business Day, the immediately preceding Business Day).]
[___] [24]	Master Servicer Remittance Date:	[The Master Servicer will remit to the Paying Agent amounts on deposit in the Collection Account for deposit into the Bond Payment Account, including any Advances made by the Servicer, the Subservicer or the Master Servicer for that Payment Date, on or before the Master Servicer Remittance Date.]
[____] [24]	Record Date:	[Payments will be made to Bondholders of record for all classes of Bonds as of the Business Day immediately preceding the related Payment Date.]
[____] [25]	Payment Date:	[On the [25]th day of each month (or if the [25]th day is not a Business Day, the next Business Day), the Paying Agent will make payments from amounts on deposit in the Bond Payment Account to Bondholders and, to the extent of funds available after all other required payments are made, will deposit into the Collection Account any amounts remaining.]

Succeeding months follow the same pattern.

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THE AGREEMENTS 

General

The following summary describes certain terms of the indenture, the mortgage loan purchase and sale agreement, the deposit trust agreement, the servicing agreements and the custodial agreements (collectively, the “agreements”). The summary does not purport to be complete and is subject to, and qualified in its entirety by reference to, all the provisions of the agreements. The following summary supplements, and to the extent inconsistent with, replaces, the description of the general terms and provisions of the agreements under the heading “The Agreements” in the accompanying prospectus.

The Bonds will be issued pursuant to the Indenture. Bonds in certificated form will be transferable and exchangeable at the Corporate Trust Office of the Issuing Entity Administrator, which will serve as bond registrar and paying agent. The Issuing Entity Administrator will provide to a prospective or actual Bondholder, without charge, on written request, an electronic copy (without exhibits) of the Indenture, the Trust Agreement and the Sale and Servicing Agreement. Requests should be addressed to [___].

Assignment of the Mortgage Loans

Under the mortgage loan purchase and sale agreement, [RWT Holdings, Inc.], as seller or sponsor, will sell the mortgage loans to the depositor. The seller will make or assign certain representations, warranties and covenants relating to, among other things, certain characteristics of the mortgage loans. Such representations and warranties will include the representations and warranties set forth under “The Agreements-Representations and Warranties” in the prospectus. Subject to the limitations described below, the seller [or originator] will be obligated as described herein to purchase or substitute a similar mortgage loan for any mortgage loan as to which there exists deficient documentation or as to which there has been an uncured breach of any such representation or warranty relating to the characteristics of the mortgage loan that materially and adversely affects the value of such mortgage loan or the interests of the bondholders in such mortgage loan (a “defective mortgage loan”).

Pursuant to the Indenture, the Issuing Entity on the Closing Date will pledge, transfer, assign, set over and otherwise convey without recourse to the Bond Trustee in trust for the benefit of the Bondholders all right, title and interest of the Issuing Entity in and to each Mortgage Loan and all right, title and interest in and to all other assets included in the Collateral, including all principal and interest received on or with respect to the Mortgage Loans, exclusive of principal and interest due on or prior to the cut-off date.

In connection with such transfer and assignment, the Issuing Entity will deliver or cause to be delivered to the Bond Trustee, or a custodian for the Bond Trustee, among other things, the original promissory note (the “Mortgage Note”) (and any modification or amendment thereto) endorsed in blank without recourse, the original instrument creating a first lien on the related Mortgaged Property (the “Mortgage”) with evidence of recording indicated thereon, an assignment in recordable form of the Mortgage, the title policy with respect to the related Mortgaged Property and, if applicable, all recorded intervening assignments of the Mortgage and any riders or modifications to such Mortgage Note and Mortgage (except for any such document not returned from the public recording office, which will be delivered to the Bond Trustee as soon as the same is available to the Issuing Entity) (collectively, the “Mortgage File”). [Assignments of the Mortgage Loans to the Bond Trustee (or its nominee) will be recorded in the appropriate public office for real property records, except in states such as California where, in the opinion of counsel, such recording is not required to protect the Bond Trustee’s interest in the Mortgage Loans against the claim of any subsequent transferee or any successor to or creditor of the Issuing Entity.]

The Bond Trustee will review each Mortgage File within [_______] days of the Closing Date (or promptly after the Bond Trustee’s receipt of any document permitted to be delivered after the Closing Date) and if any document in a Mortgage File is found to be missing or defective in a material respect and the Issuing Entity does not cure such defect within [_______] days of notice thereof from the Bond Trustee (or within such longer period not to exceed [______] days after the Closing Date as provided in the Mortgage Loan Purchase Agreement in the case of missing documents not returned from the public recording office), the seller will be obligated to purchase the related Mortgage Loan. Rather than purchase the Mortgage Loan as provided above, the seller may remove such Mortgage Loan (a “Deleted Mortgage Loan”) from the Collateral and substitute in its place another mortgage loan (a “Replacement Mortgage Loan”). Any Replacement Mortgage Loan generally will, on the date of substitution, among other characteristics set forth in the Mortgage Loan Purchase Agreement, (i) have a principal balance, after deduction of all scheduled payments due in the month of substitution, not in excess of, and not more than [_____] % less than, the Stated Principal Balance of the Deleted Mortgage Loan (the amount of any shortfall to be deposited in the Bond Account by the seller and held for distribution to the Bondholders on the related Payment Date (a “Substitution Adjustment Amount”)), (ii) have a Mortgage Rate not lower than, and not more than [_____]% per annum higher than, that of the Deleted Mortgage Loan, (iii) have a Loan-to-Value Ratio not higher than that of the Deleted Mortgage Loan, (iv) have a remaining term to maturity not greater than (and not more than [___] less than) that of the Deleted Mortgage Loan, and (v) comply with all of the representations and warranties set forth in the Mortgage Loan Purchase Agreement as of the date of substitution. This cure, purchase or substitution obligation constitutes the sole remedy available to Bondholders or the Bond Trustee for omission of, or a material defect in, a Mortgage Loan document.

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Each transfer of the mortgage loans from the seller to the depositor and from the depositor to the bond trustee will be intended to be a sale of the mortgage loans and will be reflected as such in the mortgage loan purchase and sale agreement and the indenture, respectively. However, in the event of insolvency of either the seller or the depositor, a trustee in bankruptcy or a receiver or creditor of the insolvent party could attempt to recharacterize the sale of the mortgage loans by the insolvent party as a financing secured by a pledge of the mortgage loans. In the event that a court were to recharacterize the sale of the mortgage loans by either the seller or the depositor as a financing, each of the depositor, as transferee of the mortgage loans from the seller, and the bond trustee will have a security interest in the mortgage loans transferred to it. The bond trustee’s security interest will be perfected by delivery of the mortgage notes to each custodian.

[On a designated subsequent transfer date, subsequent mortgage loans will be assigned by the depositor to the Bond Trustee, together with all principal and interest received with respect to such subsequent mortgage loans on and after the applicable subsequent cut-off date (other than monthly payments due on that date) in accordance with the procedures set forth at “Description of the Mortgage Pool—Conveyance of Subsequent Mortgage Loans.” At the time of the transfer of the subsequent mortgage loans, the Mortgage Loan schedule appearing as an exhibit to the Sale and Servicing Agreement will be amended to reflect the addition of the subsequent mortgage loans to the Trust.]

Mortgage Loan Servicing

The servicer will service the mortgage loans pursuant to existing servicing agreements, one between the servicer and the seller and another between the servicer and the transferor to the seller (referred to as the “servicing agreement”). The rights of the seller under the servicing agreement will be assigned to the depositor, and the depositor, in turn, will assign such rights to the trustee for the benefit of bondholders. Any further transfer of servicing to one or more successor servicers will be subject to the conditions set forth in the pooling and servicing agreement and the servicing agreement, as applicable.

The servicer will have primary responsibility for servicing the mortgage loans, including, but not limited to, all collection, advancing and loan-level reporting obligations, maintenance of custodial and escrow accounts, maintenance of insurance and enforcement of foreclosure proceedings with respect to the mortgage loans and the mortgaged properties, in accordance with the provisions of the servicing agreement.

Under the servicing agreement, the master servicer has the authority to terminate the servicer for certain events of default which indicate that either the servicer is not performing, or is unable to perform, its duties and obligations under the servicing agreement. If the master servicer terminates the servicer, the master servicer will be required to appoint a successor servicer as provided in the pooling and servicing agreement.

We refer you to “The Agreements — Certain Matters Regarding the Servicer and the Depositor” and — Events of Default; Rights Upon Event of Default” in the accompanying prospectus.

The master servicer is responsible for receiving the monthly servicer reports and remittances and for the oversight of the performance of the servicer under the terms of their underlying servicing agreement. In particular, the master servicer independently calculates monthly loan balances based on servicer data, compares its results to servicer loan-level reports and reconciles any discrepancies with the servicer. The master servicer also reviews the servicing of defaulted loans for compliance with the terms of the pooling and servicing agreement. In addition, upon the occurrence of certain servicer events of default under the terms of any underlying servicing agreement, the master servicer may be required to enforce certain remedies on behalf of the issuing entity against such defaulting servicer.

The master servicer will not be ultimately responsible for the performance of the servicing activities by the servicer, except as described under “— Advances” below. In addition, the master servicer will not be responsible for the supervision of the activities of the servicer related to the resolution of defaulted mortgage loans, including collections, modifications, foreclosure and disposition or management of REO property. If the servicer fails to fulfill its obligations under the servicing agreement, the master servicer will be obligated to terminate the servicer and, within 90 days of such termination, appoint a successor servicer that satisfies the eligibility requirements set forth in the servicing agreement.

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The servicer generally may not transfer the servicing to a successor servicer without the consent of the bond trustee and the master servicer. The pooling and servicing agreement requires that, in the case of transfers to a successor servicer, each rating agency confirm in writing that such transfer of servicing will not result in a qualification, withdrawal or downgrade of the then-current ratings of any of the bonds.

Waiver or Modification of Mortgage Loan Terms. [                  ]

Custodial Account. Servicing functions to be performed by the servicer under the servicing agreement include collection and remittance of principal and interest payments, administration of mortgage escrow accounts, collection of certain insurance claims and, if necessary, foreclosure. The servicer may contract with subservicers to perform some or all of the servicer’s servicing duties, but the servicer will not thereby be released from its obligations under the servicing agreement. When used herein with respect to servicing obligations, the term servicer includes a subservicer.

Pursuant to the servicing agreement, the servicer will deposit collections on the mortgage loans into the custodial account established by it. The custodial account is required to be kept segregated from operating accounts of the servicer and to meet the eligibility criteria set forth in the servicing agreement. The servicing agreement does not provide for the investment of amounts on deposit in the custodial account. Any interest earned on deposited amounts will be for the benefit of the servicer.

On or before the closing date, the issuing entity administrator, on behalf of the trustee, will establish the collection account into which the servicer will remit all amounts required to be deposited therein (net of the servicer’s servicing compensation) on the remittance date specified in the servicing agreement. Generally, the servicer will determine the amount of monthly advances for the related Due Period on or before the related Determination Date, and will furnish to the master servicer information with respect to loan level remittance data for such month’s remittance on the reporting date specified in the servicing agreement.

Prepayment Interest Shortfalls. When a borrower prepays a mortgage loan in full between Due Dates, the borrower is required to pay interest on the amount prepaid only to the date of prepayment and not thereafter. Principal prepayments by borrowers received by the servicer during the related Prepayment Period for a Payment Date will be distributed to bondholders on the related Payment Date. Thus, less than one month’s interest may have been collected on mortgage loans that have been prepaid in full with respect to any Payment Date. Pursuant to the servicing agreement, either (i) the related servicing fee for any month will be reduced (but not below zero) by the amount of any Prepayment Interest Shortfall or (ii) the servicer will be required to make payments in respect of Prepayment Interest Shortfalls from its own funds with respect to the mortgage loans. The master servicer is obligated to reduce a portion of its master servicing fee for the related Payment Date to the extent necessary to fund any Prepayment Interest Shortfalls required to be paid but not paid by the servicer. The amount of interest available to be paid to bondholders will be reduced by any uncompensated Prepayment Interest Shortfalls.

Advances. Subject to the limitations described in the following paragraph, the servicer will be required to advance prior to each Payment Date, from its own funds, or funds in the custodial account that are not otherwise required to be remitted to the collection account for such Payment Date, an amount equal to the scheduled payment of interest at the related mortgage rate (less the applicable servicing fee rate) and scheduled principal payment on each mortgage loan which were due on the related Due Date and which were not received prior to the related Determination Date (any such advance, a “monthly advance”). The master servicer will be obligated to make any required monthly advance if the servicer fails in its obligation to do so, to the extent provided in the pooling and the servicing agreement and the servicing agreement.

Monthly advances are intended to maintain a regular flow of scheduled interest and principal payments on the bonds rather than to guarantee or insure against losses. The servicer is obligated to make monthly advances with respect to delinquent payments of interest and principal on each mortgage loan serviced by it, to the extent that such monthly advances are, in its reasonable judgment, recoverable from future payments and collections or insurance payments or proceeds of liquidation of the related mortgage loans. Any failure by the servicer to make a monthly advance as required under the servicing agreement will constitute a default thereunder, in which case the master servicer will be required, as successor servicer, to make a monthly advance in accordance with the terms of the pooling and servicing agreement; provided, however, that in no event will the master servicer be required to make a monthly advance that is not, in its reasonable judgment, recoverable from future payments and collections or insurance payments or proceeds of liquidation of the related mortgage loans. If the servicer determines on any Determination Date to make a monthly advance, such monthly advance will be included with the payment to bondholders on the related Payment Date. Any failure by the master servicer to make a monthly advance as required under the pooling and servicing agreement will constitute a master servicer default thereunder, in which case the trustee or the successor master servicer will be obligated to make such monthly advance.

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Servicing Compensation and Payment of Expenses. The servicer will be entitled to receive, from interest actually collected on each mortgage loan serviced by it, a servicing fee (the “servicing fee”) equal to the product of (1) the principal balance of such mortgage loans as of the first day of the related Due Period and (2) a per annum rate (the “servicing fee rate”) equal to (a) in the case of a mortgage loan that has not reached its first adjustment date, 0.25% annually or (2) in the case of a mortgage loan that has reached its first adjustment date, 0.375% annually. The servicer will also be entitled to receive, to the extent provided in the applicable servicing agreement, additional compensation in the form of prepayment premiums and any interest or other income earned on funds it has deposited in the custodial account pending remittance to the master servicer, as well as late charges and certain fees paid by borrowers and, in certain cases, REO management fees.

As compensation for its services, the master servicer will be entitled to retain interest or other income earned on funds it has deposited in the collection account pending remittance of such funds by the issuing entity administrator to the bondholders. The amount of the master servicing fee and the servicer’s servicing fee is subject to adjustment with respect to prepaid mortgage loans, as described above under “— Prepayment Interest Shortfalls.”

Evidence as to Compliance. The servicing agreement will require the servicer to deliver to the trustee, on or before the date in each year specified in the servicing agreement, and, if required, file with the SEC as part of a Report on Form 10-K filed on behalf of each trust, the following documents:

· a report on its assessment of compliance during the preceding calendar year with all applicable servicing criteria set forth in relevant SEC regulations with respect to asset-backed securities transactions taken as a whole involving the servicer that are backed by the same types of assets as those backing the offered securities, as well as similar reports on assessment of compliance received from certain other parties participating in the servicing function as required by relevant SEC regulations;

· with respect to each assessment report described in the immediately preceding bullet point, a report by a registered public accounting firm that attests to, and reports on, the assessment made by the asserting party, as set forth in relevant SEC regulations; and

· a statement of compliance from the servicer, and similar statements from certain other parties involved in servicing the mortgage loans as required by relevant SEC regulations, signed by an authorized officer, to the effect that: (a) a review of the servicer’s activities during the reporting period and of its performance under the applicable servicing agreement has been made under such officer’s supervision; and (b) to the best of such officer’s knowledge, based on such review, the servicer has fulfilled all of its obligations under the servicing agreement in all materials respects throughout the reporting period or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status thereof.

Each custodial agreement provides that the related custodian will certify to the depositor, the trustee, the servicer and the master servicer that all information prepared by it and provided to the master servicer, the servicer or the issuing entity administrator relating to the mortgage loans is accurate and complete in all material respects as of the last day of the period covered by that report and that generally the custodian is in compliance with its obligations to report to the master servicer, the servicer and the issuing entity administrator and is in compliance with its obligations under the related custodial agreement. The pooling and servicing agreement will provide that each year the master servicer will certify to the trustee that for the prior calendar year, the master servicer has performed and fulfilled its duties, responsibilities and obligations under the pooling and servicing agreement in all material respects throughout that year, or, if there has been a default in the fulfillment of any such duties, responsibilities or obligations, specifying each such default known to the master servicer and the nature and status thereof, and the master servicer has received from the servicer an annual certificate of compliance and a copy of the servicer’s annual audit report, in each case to the extent required under the servicing agreement, or, if any such certificate or report has not been received by the master servicer, the master servicer is using its best reasonable efforts to obtain such certificate or report.

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The pooling and servicing agreement will also provide that each year during which the master servicer directly services any of the mortgage loans, as servicer, a firm of independent accountants will furnish a statement to the trustee to the effect that such firm has examined certain documents and records relating to the servicing of mortgage loans similar to the mortgage loans by the master servicer and that, on the basis of such examination, such firm is of the opinion that the servicing has been conducted in accordance with the terms of the pooling and servicing agreement, except for (1) exceptions as the firm believes to be immaterial and (2) any other exceptions set forth in such statement.

Events of Default. Events of default under the servicing agreement include (i) any failure of the servicer to remit to the collection any required payment which continues unremedied for a specified period after the giving of written notice of such failure to the servicer; (ii) any failure by the servicer to make a monthly advance as required under the servicing agreement, unless cured as specified therein; (iii) any failure by the servicer duly to observe or perform in any material respect any of its other covenants or agreements in the servicing agreement which continues unremedied for a specified period after the giving of written notice of such failure to the servicer; and (iv) certain events of insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceeding and certain actions by or on behalf of the servicer indicating its insolvency, reorganization or inability to pay its obligations.

If the servicer is in default in its obligations under the servicing agreement, the master servicer may, at its option, terminate the defaulting servicer and either appoint a successor servicer in accordance with the servicing agreement and the pooling and servicing agreement or succeed to the responsibilities of the terminated servicer.

In the event of a default by the servicer under its servicing agreement, the master servicer will have the right to remove the servicer and will exercise that right if it considers such removal to be in the best interest of the bondholders. In the event that the master servicer removes the servicer, the master servicer will, in accordance with the pooling and servicing agreement, act as successor servicer under the servicing agreement or will appoint a successor servicer reasonably acceptable to the depositor and the trustee. In connection with the removal of the servicer, the master servicer will be entitled to be reimbursed from the assets of the issuing entity for all of its reasonable costs associated with the termination of the servicer and the transfer of servicing to a successor servicer.

Limitation on Liability of the Servicer and Others. The servicing agreement provides that neither the servicer nor any of the officers, employees or agents of the servicer will be under any liability to the trust for any action taken, or for refraining from taking any action, in good faith pursuant to the servicing agreement, or for errors in judgment. The servicing agreement further provides, however, that such provision will not protect the servicer or any such person against any breach of warranties or representations made by the servicer in the servicing agreement, or the failure of the servicer to perform its obligations in compliance with any standard of care set forth in the servicing agreement, or any liability which would otherwise be imposed by reason of any breach of the terms and conditions of the servicing agreement.

Resignation of Servicer. The servicer may not resign from its obligations and duties under the servicing agreement or assign or transfer its rights, duties or obligations except (i) upon a determination that its duties thereunder are no longer permissible under applicable law, (ii) in certain cases, upon the sale of substantially all of its assets or (iii) upon a sale of its servicing rights with respect to the mortgage loans with the prior written consent of the depositor, which consent may not be unreasonably withheld. No such resignation will become effective until the master servicer or a successor servicer approved by it has assumed the servicer’s obligations and duties under the servicing agreement.

Any person into which the servicer may be merged or consolidated, any person resulting from any merger or consolidation which the servicer is a party, any person succeeding to the business of the servicer or any person to whom the servicer assigns or transfers its duties and obligations, will be the successor of the servicer under the related servicing agreement.

Amendment of the Servicing Agreement. The servicing agreement may generally be amended by written agreement between the servicer and the trustee, as acknowledged by the master servicer, without notice to or consent of the bondholders.

Administration

The Issuing Entity Administrator or the Depositor will agree, to the extent provided in the Management Agreement, to provide certain notices and to perform certain other administrative obligations required to be performed by the Issuing Entity, the Bond trustee and the Owner Trustee under the Management Agreement, the Indenture and the Trust Agreement.

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[Neither the Issuing Entity Administrator nor the Depositor will receive additional compensation for their services under the Management Agreement.]

Reports to Bondholders

On each Payment Date, the Issuing Entity Administrator will make available on the Issuing Entity Administrator’s website at [____________] a payment statement containing the items set forth under “The Agreements—Reports to Securityholders” in the prospectus, based solely on information received from the Servicer or the Master Servicer.

Voting Rights

Voting rights under the deposit trust agreement will be allocated as follows:

· [98]% to the classes of Bonds in proportion to their respective outstanding Bond Principal Amounts; and

· [2]% to the Residual Holder.

Termination of the Issuing Entity

The Issuing Entity will terminate upon the payment to the holders of all classes of Bonds of all amounts required to be paid to the holders and upon the last to occur of:

· the final payment or other liquidation, or any related advance, of the last Mortgage Loan;

· the disposition of all property acquired in respect of any Mortgage Loan remaining in the Trust; and

· exercise by the Residual Holder of its right to purchase the Mortgage Loans and other property of the Trust as described under “Description of the Bond—Optional Purchase of the Mortgage Loans.”

YIELD, PREPAYMENT AND WEIGHTED AVERAGE LIFE 

General

The yields to maturity (or to early termination) of the Offered Bonds will be affected by the rate of principal payments (including prepayments, which may include amounts received by virtue of purchase, condemnation, insurance or foreclosure) on the Mortgage Loans and the application of excess interest to reduce the Class Principal Amounts of the Bonds. Yields will also be affected by the extent to which Mortgage Loans bearing higher Mortgage Rates prepay at a more rapid rate than Mortgage Loans with lower Mortgage Rates, the amount and timing of borrower delinquencies and defaults resulting in Realized Losses, the purchase price paid by investors for the Offered Bonds, and other factors.

Yields on the Offered Bonds will be affected by the rate of principal payments on the Mortgage Loans.  Principal prepayments may be influenced by a variety of economic, geographic, demographic, social, tax, legal and other factors, including the credit quality of the Mortgage Loans. In general, if prevailing interest rates fall below the interest rates on the Mortgage Loans, the Mortgage Loans are likely to be subject to a higher rate of prepayments than if prevailing rates remain at or above the interest rates on the Mortgage Loans. Conversely, if prevailing interest rates rise above the interest rates on the Mortgage Loans, the rate of prepayment would be expected to decrease. Other factors affecting prepayment of the Mortgage Loans include such factors as changes in borrowers’ housing needs, job transfers, unemployment, borrowers’ net equity in the mortgaged properties, changes in the values of mortgaged properties, mortgage market interest rates and servicing decisions, as well as refinancings resulting from solicitations by mortgage lenders. [The Mortgage Loans generally have due-on-sale clauses.]

In addition, the rate of principal prepayments may also be influenced by programs offered by the Subservicer and its affiliates or by other lenders. Many mortgage lenders solicit borrowers to refinance their loans. [Lender] does not directly solicit borrowers to refinance, but the availability of [Lender]’s “streamline refi” program, which enables qualifying mortgagors to refinance at greatly reduced cost, may influence some borrowers to do so. These refinancings may increase the rate of prepayment of the Mortgage Loans.

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[The Mortgage Loans have Mortgage Rates that provide for a fixed interest rate during an initial period of six months, three years, five years or seven years from the date of the origination and thereafter provide for adjustments to the Mortgage Rates on either a monthly or semi-annual basis. When a Mortgage Loan begins its adjustable rate period, increases and decreases in the Mortgage Rate will be limited by the Periodic Cap, the Maximum Rate and the Minimum Rate, if any, and will be based on the applicable Index in effect on the applicable date prior to the related Adjustment Date plus the applicable Gross Margin. The applicable Index may not rise and fall consistently with mortgage interest rates. As a result, the Mortgage Rates on the Mortgage Loans at any time may not equal the prevailing mortgage interest rates of similar adjustable rate mortgage loans, and accordingly the prepayment rate may be lower or higher than would otherwise be anticipated.] [To be provided as applicable.] Some borrowers who prefer the certainty provided by fixed rate mortgage loans may nevertheless obtain adjustable rate mortgage loans at a time when they regard the mortgage interest rates (and, therefore, the payments) on fixed rate mortgage loans as unacceptably high. These borrowers may be induced to refinance adjustable rate loans when the interest rates and monthly payments on comparable fixed rate mortgage loans decline to levels which these borrowers regard as acceptable, even though such mortgage interest rates and monthly payments may be significantly higher than the current mortgage interest rates and monthly payments on the borrowers’ adjustable rate mortgage loans. The ability to refinance a Mortgage Loan will depend on a number of factors prevailing at the time refinancing is desired, including, without limitation, real estate values, the borrower’s financial situation, prevailing mortgage interest rates, the borrower’s equity in the related Mortgaged Property, tax laws and prevailing general economic conditions.

[Substantially all of the Mortgage Loans provide for payment of interest at the related Mortgage Rate, but no payment of principal, for a period of ten years following the origination of the related Mortgage Loan. Following the applicable interest-only period, the monthly payment with respect to these Mortgage Loans will be increased to an amount sufficient to amortize the principal balance of such Mortgage Loan over its remaining term, and to pay interest at the related Mortgage Rate.]  [To be provided as applicable.]

The rate of principal payments on the Mortgage Loans will also be affected by the amortization schedules of the Mortgage Loans, the rate and timing of prepayments thereon by the borrowers, liquidations of defaulted Mortgage Loans, repurchases of Mortgage Loans due to certain breaches of representations and warranties or defective documentation, and optional purchases of Mortgage Loans as described herein. The timing of changes in the rate of prepayments, liquidations and purchases of the Mortgage Loans may, and the timing of Realized Losses will, significantly affect the yield to an investor, even if the average rate of principal payments experienced over time is consistent with an investor’s expectation. Because the rate and timing of principal payments on the Mortgage Loans will depend on future events and on a variety of factors (as described more fully herein and in the prospectus under “Yield and Prepayment Considerations”), no assurance can be given as to such rate or the timing of principal payments on the Offered Bonds. In general, the earlier a prepayment of principal of the Mortgage Loans, the greater will be the effect on an investor’s yield. The effect on an investor’s yield of principal payments occurring at a rate higher (or lower) than the rate anticipated by the investor during the period immediately following the issuance of the Bonds may not be offset by a subsequent like decrease (or increase) in the rate of principal payments.

From time to time, areas of the United States may be affected by flooding, severe storms, landslides, wildfires, earthquakes or other natural disasters.  Under the Mortgage Loan Purchase Agreement, the Seller will represent and warrant that as of the Closing Date each Mortgaged Property was free of material damage. In the event of an uncured breach of this representation and warranty that materially and adversely affects the interests of Bondholders, the Seller will be required to repurchase the affected Mortgage Loan or substitute another mortgage loan therefor. If any damage caused by flooding, storms, wildfires, landslides or earthquakes (or other cause) occurs after the Closing Date, the Seller will not have any repurchase obligation. In addition, the standard hazard policies covering the Mortgaged Properties generally do not cover damage caused by earthquakes, flooding and landslides, and earthquake, flood or landslide insurance may not have been obtained with respect to such Mortgaged Properties. As a consequence, Realized Losses could result. To the extent that the insurance proceeds received with respect to any damaged Mortgaged Properties are not applied to the restoration thereof, the proceeds will be used to prepay the related Mortgage Loans in whole or in part. Any repurchases or repayments of the Mortgage Loans may reduce the weighted average lives and will reduce the yields on the Offered Bonds to the extent they are purchased at a premium.

Prepayments, liquidations and purchases of Mortgage Loans will result in payments to holders of Bonds of principal amounts that would otherwise be paid over the remaining terms of such Mortgage Loans. The rate of defaults on the Mortgage Loans will also affect the rate and timing of principal payments on the Mortgage Loans. In general, defaults on mortgage loans are expected to occur with greater frequency in their early years, especially with respect to adjustable rate mortgage loans, as increases in monthly payments may result in a default rate higher than on level payment mortgage loans. Furthermore, the rate of default on Mortgage Loans with high loan-to-value ratios may be higher than for other Mortgage Loans.

S-57

Certain characteristics of the Mortgage Loans that may influence the rate of defaults or losses are described under “Risk Factors” and “Description of the Mortgage Pool[s].”

[The inclusion of interest only Mortgage Loans in the Trust will generally, absent other considerations, result in longer weighted average lives of the Offered Bonds than would be the case if these Mortgage Loans provided for monthly payments of principal throughout their terms. If an investor purchases Offered Bonds at a discount, the yield may be reduced. In addition, a borrower may view the interest only period as a disincentive to prepayment.] [To be provided as applicable.]

The yields on the Offered Bonds may be adversely affected by Net Prepayment Interest Shortfalls on the Mortgage Loans. The yields on the Offered Bonds will be affected by the level of LIBOR from time to time, and by the Mortgage Rates of the Mortgage Loans from time to time as described under “Risk Factors — Mortgage Loan Interest Rates May Limit Interest Rates on the Bonds.”

[In the event that at the end of the Pre-Funding Period not all of the pre-funding amount in the pre-funding account has been used to acquire subsequent mortgage loans for inclusion in the Trust, the related Bondholders will receive a partial prepayment on the Payment Date in [________] [___], equal to the amount remaining the applicable pre-funding account. Although no assurance can be given, the Depositor expects that the principal balance of the subsequent mortgage loans to be sold to the Trust will require the application of substantially all of the pre-funding amount and that there should be no material principal prepaid to the Bondholders.]

[The yields to investors on the Class [_____] Bonds may be adversely affected by the Trust Fund’s acquisition of Subsequent Mortgage Loans, which will reduce the amount and timing of principal payments on these Bonds.]

As described herein, excess interest will be applied, to the extent available, as an additional payment of principal on the Bonds to achieve and maintain limited overcollateralization. The amount of excess interest available on any Payment Date will be influenced by, among other things:

· the amount of overcollateralization.  This means the extent to which interest on the Mortgage Loans is accruing on a higher principal balance than the aggregate Class Principal Amounts of the Bonds;

· the loss experience of the Mortgage Loans.  For example, excess interest will be reduced as a result of Realized Losses on the Mortgage Loans;

· the value of LIBOR;

· [to the extent which amounts are received by the Trust under the Swap Agreements; and]

· the extent to which the weighted average Net Mortgage Rates of the Mortgage Loans exceed the weighted average of the Bond Interest Rates of the Bonds.

No assurance can be given as to the amount or timing of excess interest payable on the Bonds.

[The yields to investors in the Offered Bonds will be affected by the exercise by the Residual Holder of its right to purchase the Mortgage Loans, as described under “Description of the Bonds — Optional Purchase of the Mortgage Loans” herein or their failure to exercise that right.]  [To be provided as applicable.]

If the purchaser of an Offered Bond offered at a discount from its initial principal amount calculates its anticipated yield to maturity (or early termination) based on an assumed rate of payment of principal that is faster than that actually experienced on the related Mortgage Loans, the actual yield may be lower than that so calculated. Conversely, if the purchaser of an Offered Bond offered at a premium calculates its anticipated yield based on an assumed rate of payment of principal that is slower than that actually experienced on the related Mortgage Loans, the actual yield may be lower than that so calculated. For this purpose, prepayments of principal include not only voluntary prepayments made by the borrower, but repurchases of Mortgage Loans by the Seller due to breaches of representations and warranties.

S-58

The Bond Interest Rates applicable to the Bonds will be affected by the level of LIBOR from time to time, and by the Mortgage Rates of the Mortgage Loans from time to time as described under “Risk Factors—Mortgage Loan Interest Rates May Limit Interest Rates on the Bonds.”

Overcollateralization

The yields of the Offered Bonds will be affected by the application of Monthly Excess Interest as described herein and by the amount of overcollateralization. The amount of Monthly Excess Interest will be affected by the delinquency, default and prepayment experience of the Mortgage Loans. There can be no assurance as to whether overcollateralization will be increased to or maintained at the levels described herein.

Subordination of the Subordinate Bonds

As described herein, Bonds having a relatively higher priority of payment will have a preferential right to receive payments of interest to the extent of Interest Funds and principal to the extent of the Principal Payment Amount. As a result, the yields of the Subordinate Bonds will be more sensitive, in varying degrees, to delinquencies and losses on the Mortgage Loans than the yields of more senior Bonds.

Weighted Average Life

Weighted average life refers to the average amount of time that will elapse from the date of issuance of a security to the date of payment to the investor of each dollar paid in net reduction of principal of such security (assuming no losses). The weighted average lives of the Offered Bonds will be influenced by, among other things, the rate at which principal of the related Mortgage Loans is paid, which may be in the form of scheduled amortization, prepayments or liquidations and the amount of excess interest.

Prepayments on mortgage loans are commonly measured relative to a constant prepayment standard or model. The model used in this prospectus supplement for the Mortgage Loans is CPR. CPR assumes a constant rate of prepayment each month relative to the then outstanding balance of the related pool of mortgage loans for the life of such loans.

CPR does not purport to be either a historical description of the prepayment experience of the Mortgage Loans or a prediction of the anticipated rate of prepayment of any mortgage loans, including the Mortgage Loans to be owned by the Issuing Entity. The percentages of CPR in the tables below do not purport to be historical correlations of relative prepayment experience of the Mortgage Loans or predictions of the anticipated relative rate of prepayment of the Mortgage Loans. Variations in the prepayment experience and the principal balance of the Mortgage Loans that prepay may increase or decrease the percentages of initial Class Principal Amounts (and weighted average lives) shown in the following table. Such variations may occur even if the average prepayment experience of all such Mortgage Loans equals any of the specified percentages of CPR.

The tables below were prepared based on the following assumptions (collectively, the “Modeling Assumptions”): [(1) the initial Class Principal Amounts are as set forth in the table on page S-[__]; (2) each monthly payment of principal and interest is timely received on the first day of each month commencing in [____]; (3) principal prepayments are received in full on the last day of each month commencing in [___] and there are no Net Prepayment Interest Shortfalls; (4) there are no defaults or delinquencies on the Mortgage Loans; (5) Payment Dates occur on the [25]th day of each month commencing in [___]; (6) there are no purchases or substitutions of Mortgage Loans (except in the case of an Optional Termination of the Issuing Entity); (7) the Mortgage Rate of each Mortgage Loan is adjusted on the next applicable rate adjustment date and any subsequent adjustment dates to equal the value of the related Index set forth below plus the related Gross Margin subject to the applicable caps and floor; (8) the Adjustment Date with respect to each assumed Mortgage Loan occurs in the month immediately following the applicable interest adjustment date; (9) the value of Six-Month LIBOR is equal to [___]% and remains constant; and the value of One-Month LIBOR is equal to [___]% and remains constant; (10) there is no Optional Termination of the Issuing Entity (except in the case of Weighted Average Life in Years With Optional Termination); (11) the Bonds are issued on [___]; (12) the Servicing Fee Rate for any Mortgage Loan is equal to the rate for such Mortgage Loan as described under “Fees and Expenses of the Trust” herein; and (13) the Mortgage Loans are aggregated into assumed Mortgage Loans having the following characteristics]  [May vary in accordance with structure of transaction]:

S-59

Assumed Characteristics of the Mortgage Loans

Remaining

Original

Months to

Initial

Rate

Gross

Net

Term to

Term to

Next Rate

Gross

Periodic

Subsequent

Adjustment

Remaining

Loan

Principal

Mortgage

Mortgage

Expense

Maturity

Maturity

Adjustment

Maximum

Minimum

Margin

Rate

Periodic Rate

Frequency

IO Term

Index

Number

Balance ($)

Rate (%)

Rate (%)

Fee Rate

(months)

(months)

Date

Rate (%)

Rate (%)

(%)

Cap (%)

Cap (%)

(months)

(months)

Type

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

÷

22

23

24

The actual characteristics and the performance of the Mortgage Loans will differ from the assumptions used in constructing the tables set forth below, which are hypothetical in nature and are provided only to give a general sense of how the principal cashflows might behave under varying prepayment scenarios. For example, it is not expected that the Mortgage Loans will prepay at a constant rate until maturity, that all of the Mortgage Loans will prepay at the same rate or that there will be no defaults or delinquencies on the Mortgage Loans. Moreover, the diverse remaining terms to maturity of the Mortgage Loans could produce slower or faster principal payments than indicated in the tables at the various percentages of CPR specified, even if the weighted average remaining term to maturity are as assumed.  Any difference between such assumptions and the actual characteristics and performance of the Mortgage Loans, or the actual prepayment or loss experience, will cause the percentages of initial Class Principal Amounts outstanding over time and the weighted average lives of the Offered Bonds to differ (which difference could be material) from the corresponding information in the tables for each indicated percentage of CPR.

The Mortgage Loans are expected to have the approximate actual aggregate characteristics as of the cut-off date as set forth in Annex A attached to this prospectus supplement and incorporated by reference herein.  

Subject to the foregoing discussion and assumptions, the following tables indicate the weighted average lives of the Offered Bonds and set forth the percentages of the initial Class Principal Amounts of the Offered Bonds that would be outstanding after each of the Payment Dates shown at various percentages of CPR.

S-60

The weighted average life of a class of Offered Bonds is determined by (1) multiplying the net reduction, if any, of the applicable Class Principal Amount by the number of years from the date of issuance of the Offered Bond to the related Payment Date, (2) adding the results and (3) dividing the sum by the aggregate of the net reductions of Class Principal Amount described in (1) above.

Percentage of Initial Class Principal Amount of the

 Class [____] and Class [___] Bonds Outstanding

at the Following Percentages of CPR

	Class [___] Bonds					Class [___] Bonds
	0%	10%	25%	40%	50%	0%	10%	25%	40%	50%
Initial Percentage
[___]
[___]
[___]
[___]
[___]
[___]
[___]
[___]
[___]
[___]
[___]
[___]
[___]
[___]
[___]
[___]
[___]
[___]
[___]
[___]
Weighted Average Life in Years:
Without Optional Termination
With Optional Termination

[* Indicates a value between 0.0% and 0.5%.]

S-61

USE OF PROCEEDS

The Issuing Entity intends to distribute all of the net proceeds of the issuance of the Bonds to the Depositor which will use such proceeds to pay certain indebtedness incurred by Redwood Trust in connection with the acquisition of the Mortgage Loans. Expenses incurred by the Depositor in connection with this offering are expected to be approximately $[_______] before deducting expenses payable by it of approximately $[_______] ($[_______] of which expenses were incurred in connection with the selection and acquisition of the mortgage loans and other assets of the issuing entity).

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

Tax Classification of the Issuing Entity and of the Bonds

Investors should review the material set forth in this section together with the information in the section “Material Federal Income Tax Consequences” in the prospectus.

Chapman and Cutler LLP has advised us that in its opinion the Bonds will be treated as debt for federal income tax purposes and not as an ownership interest in the mortgage collateral, the issuing entity or a separate association taxable as a corporation. Interest, including original issue discount with respect to any class of Bonds issued with original issue discount, will be taxable to non-exempt bondholders. The Tax Prepayment Assumption (as defined in the prospectus under “Federal Income Tax Consequences — Taxation of Regular Interest Securities — Original Issue Discount”) for the purposes of determining the amount and rate of accrual of original issue discount on the Bonds assumes that the Mortgage Loans are prepaid at a rate of [___]% of the Prepayment Assumption. Based upon (i) [the assumed prepayment rate] and (ii) the expected price to the public of each Class of Bonds as of the date hereof (including interest accrued before the issue date, if any), the Senior Bonds will not be issued with original issue discount and the Subordinated Bonds will be treated as issued with original issue discount. [Although such treatment is not entirely certain, the Issuing Entity intends to treat the Bonds as “Variable Rate Debt Instruments” and the stated interest on the Bonds as “qualified stated interest payments” (as each term is defined in the prospectus under “Material Federal Income Tax Consequences”)].

Notwithstanding the use of [_________] in pricing the bonds, no representation is made that the Mortgage Loans will actually prepay at or at any other rate. The amount of original issue discount and certain other information with respect to each Bond will be set forth on the face of such bond as required by applicable regulations and as described in the prospectus.

The Issuing Entity will not elect to treat the segregated pool of assets securing the Bonds as a real estate mortgage investment conduit (“REMIC”) for federal income tax purposes. Chapman and Cutler LLP has further advised us that, in its opinion, the Issuing Entity [will not be classified as a taxable mortgage pool][may be classified as a taxable mortgage pool, but will not be subject to federal income tax as a corporation as long the all of the securities classified as equity interests in the issuing entity for federal income tax purposes are held by an entity that qualifies as a “real estate investment trust,” or are held directly or indirectly through one or more wholly owned “qualified REIT subsidiaries,” each as defined under section 856 of the Internal Revenue Code of 1986, as amended].

Tax Consequences to Holders of the Bonds

Interest Income on the Bond. The Bonds may be treated as having been issued with original issue discount (“OID”). The beneficial owner of a Bond must include any OID with respect to such Bond in income as it accrues on a constant yield method, regardless of whether the beneficial owner receives any cash currently attributable to such OID (We refer you to “Material Federal Tax Considerations—Taxation of Regular Interest Securities —Original Issue Discount” in the prospectus). The prepayment assumption that will be used in determining the accrual of any OID, market discount or amortizable bond premium, if any, will be a rate equal to [___]% of CPR with respect to the Mortgage Loans. We refer you to “Yield, Prepayment and Weighted Average Life” above. No representation, however, is made as to the rate at which principal payments or recoveries on the Mortgage Loans actually will occur.

Possible Alternative Treatments of the Bond. If, contrary to the opinion of Chapman and Cutler LLP, the Internal Revenue Service successfully asserted that a class of Bonds did not represent debt instruments for federal income tax purposes, those Bonds might be treated as equity interests in the issuing entity. [If, as a result, a REIT did not hold, directly, or indirectly through a qualified REIT subsidiary, 100% of the equity in the issuing entity, the issuing entity could be subject to corporate income tax.] Moreover, if a class of Bonds represented equity in the issuing entity, payments of interest on that class of Bonds to a foreign person generally would be subject to U.S. tax and withholding requirements.

S-62

State and Local Income Tax Considerations. In addition to the federal income tax consequences described under “Material Federal Income Tax Consequences” above, prospective investors should consider the state and local income tax consequences of the acquisition, ownership and disposition of the Bonds. State and local income tax law may differ substantially from the corresponding federal tax law, and this discussion does not purport to describe any aspect of the income tax laws of any state or municipality. Therefore, prospective investors should consult their own tax advisors with respect to the various tax consequences of investments in the Bonds.]

ERISA MATTERS

General

Section 406 of ERISA prohibits, and Section 4975 of the Code imposes adverse tax consequences on, certain transactions between Plans and persons that are “parties in interest” under ERISA or “disqualified persons” under the Code with respect to such Plan. A violation of these “prohibited transaction” rules may result in an excise tax and other penalties and liabilities under ERISA and the Code for such persons.

Certain transactions involving the assets of a trust might be deemed to constitute prohibited transactions under Section 406 of ERISA and the Section 4975 of the Code with respect to a Plan that purchases securities issued by that trust if assets of the issuing entity were deemed to be assets of the Plan (the “Plan”). Under a regulation issued by the United States Department of Labor (the “Plan Assets Regulation”), the assets of an issuing entity would be treated as plan assets of the Plan for the purposes of ERISA and the Section 4975 Code only if the Plan acquired an “equity interest” in the trust and none of the exceptions contained in the Plan Assets Regulation was applicable. An equity interest is defined under the Plan Assets Regulation as an interest other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features.

Purchases of the Offered Bonds

[Although there is little guidance on the subject, at the time of their issuance, the Offered Bonds should be treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulations. This determination is based in part upon (1) tax counsel’s opinion that Offered Bonds transferred on the Closing Date to parties unrelated to the initial holder of the Ownership Certificate will be classified as debt for U.S. federal income tax purposes and that Retained Bonds, if later sold to a party unrelated to the holder of the Ownership Certificate for cash, will be classified as debt instruments for U.S. federal income tax purposes as of the date of such sale, based on certain assumptions (including that the rating of the Offered Bonds as of the Closing Date has not declined below investment grade) and (2) the traditional debt features of the Offered Bonds, including the reasonable expectation of purchasers of the Offered Bonds that they will be repaid when due, as well as the absence of conversion rights, warrants and other typical equity features. Based upon the foregoing and other considerations, subject to the considerations described below, the Offered Bonds may be purchased by a Plan.

Without regard to whether the Offered Bonds are considered an “equity interest” in the Issuing Entity under the Plan Asset Regulations, the acquisition or holding of Offered Bonds by or on behalf of a Plan could be considered to give rise to a prohibited transaction if the Underwriters, the Issuing Entity, the  Owner Trustee or the Bond Trustee, or any of their respective affiliates is or becomes a party in interest or a disqualified person with respect to such Plan. In that case, certain prohibited transaction exemptions from the prohibited transaction rules could be applicable, depending on the type of Plan involved and the circumstances of the plan fiduciary’s decision to acquire such Offered Bond.  Included among these exemptions are: PTCE 84-14 (relating to transactions effected by a “qualified professional asset manager”); PTCE 90-1 (relating to transactions involving insurance company pooled separate accounts); PTCE 91-38 (relating to transactions involving bank collective investment funds); PTCE 95-60 (relating to transactions involving insurance company general accounts); and PTCE 96-23 (relating to transactions effected by an “in-house asset manager”). Even if the conditions specified in one or more of these exemptions are met, the scope of the relief provided by these exemptions might or might not cover all acts that might be construed as prohibited transactions. There can be no assurance that any of these exemptions, or any other exemption, will be available with respect to any particular transaction involving such Offered Bonds.

Employee benefit plans that are governmental plans (as defined in Section 3(32) of ERISA) and certain church plans (as defined in Section 3(33) of ERISA) are not subject to ERISA requirements but may be subject to Similar Law.

S-63

The Offered Bonds should not be purchased with the assets of a Benefit Plan if the Seller, the Depositor, the Bond Trustee, the Owner Trustee, the Issuing Entity Administrator, the Underwriters or any of their affiliates is a fiduciary or gives investment advice with respect to such Benefit Plan or is an employer maintaining or contributing to such Benefit Plan, unless such purchase and holding of the Offered Bonds would be covered by an applicable prohibited transaction exemption, and will not cause a non-exempt violation of any Similar Law.

Prospective Benefit Plan investors in the Offered Bonds should consult with their legal advisors concerning the impact of ERISA and the Code and any Similar Law, the availability of other exemptions from the prohibited transaction rules that may apply to them, and the potential consequences in their specific circumstances, prior to making an investment in the Offered Bonds. Each Benefit Plan fiduciary should also determine whether under the general fiduciary standards of investment prudence and diversification, an investment in the Offered Bonds is appropriate for the Benefit Plan, taking into account the overall investment policy of the Plan and the composition of the Benefit Plan’s investment portfolio.

Each purchaser and transferee of an Offered Bond will be deemed to represent and warrant to the Issuing Entity that (i) it is not acquiring such Bond for, or with the assets of, a Benefit Plan or (ii) its acquisition and holding of such Bond will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code which is not covered under an Investor-Based Exemption or some other applicable exemption, and will not cause a non-exempt violation of any Similar Law.]

METHOD OF DISTRIBUTION

Subject to the terms and conditions set forth in the Underwriting Agreement between the depositor, Redwood Trust and the Underwriter, the depositor has agreed to cause the Issuing Entity to sell to the Underwriter, and the Underwriter has agreed to purchase from the Issuing Entity, the bonds. Distribution of the Bonds will be made by the Underwriter from time to time in negotiated transactions or otherwise at varying prices to be determined at the time of sale. In connection with the sale of the bonds, the Underwriter may be deemed to have received compensation from the Issuing Entity in the form of underwriting discounts.

The Underwriter intends to make a secondary market in the bonds, but has no obligation to do so. There can be no assurance that a secondary market for the bonds will develop or, if it does develop, that it will continue or that it will provide bondholders with a sufficient level of liquidity of investment. The bonds will not be listed on any national securities exchange.

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

LEGAL MATTERS

The validity of the Bonds will be passed upon for the Issuing Entity by Weintraub Genshlea Chediak Tobin & Tobin Law Corporation, San Francisco, California. Certain tax matters will be passed upon by for the Issuing Entity by Chapman and Cutler LLP, San Francisco, California. [___________] will act as counsel for the underwriter.

RATINGS

The depositor expects that the offered bonds will receive credit ratings from two nationally recognized statistical rating organizations that have been hired to rate the bonds (the “hired NRSROs”).

The ratings assigned by [_________] to collateralized mortgage obligations address the likelihood of the receipt of all payments on the mortgage loans by the related bondholders under the agreements pursuant to which such bonds are issued. [_________]’s ratings take into consideration the credit quality of the related mortgage pool, including any credit support providers, structural and legal aspects associated with such bonds, and the extent to which the payment stream on the mortgage pool is adequate to make the payments required by such bonds. [_________]’s ratings on such bonds do not, however, constitute a statement regarding frequency of prepayments of the mortgage loans.

The ratings assigned by [_________] to the Senior Bonds address the likelihood of the receipt of all payments on the mortgage loans by the related Bondholders under the agreements pursuant to which such bonds are issued. [_________]’s ratings take into consideration the credit quality of the related mortgage pool, including any credit support providers, structural and legal aspects associated with such bonds, and the extent to which the payment stream on such mortgage pool is adequate to make payments required by such bonds. [_________]’s ratings on such bonds do not, however, constitute a statement regarding frequency of prepayments on the related mortgage loans.

S-64

The ratings assigned by the hired NRSROs do not constitute a statement regarding frequency of prepayments of the mortgage loans. The ratings of the hired NRSROs do not address the possibility that, as a result of principal prepayments, bondholders may receive a lower than anticipated yield.

The ratings do not address the likelihood that any Basis Risk Shortfall Carryforward Amount will be repaid to Bondholders from Monthly Excess Cashflow.

The ratings assigned to the Bonds should be evaluated independently from similar ratings on other types of securities. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the hired NRSROs.

The issuing entity is not requesting a rating of the bonds by any rating agency other than the hired NRSROs referred to above; there can be no assurance, however, as to whether any other rating agency will rate the bonds or, if it does, what rating would be assigned by such other rating agency.

In preparing for the offering of the bonds, the sponsor engaged the hired NRSROs to provide ratings on the offered bonds. Accordingly, the sponsor executed an engagement letter with each hired NRSRO setting forth the terms on which each hired NRSRO would provide such ratings. Although the engagement letter with each hired NRSRO states that its fees are not contingent upon the issuance of the bonds, if the bonds are not issued under certain circumstances a portion of the fees of each hired NRSRO may not be payable. In addition, the fees paid to each hired NRSRO at closing include a fee for ongoing surveillance by each hired NRSRO for so long as the bonds are outstanding. However, the hired NRSROs are under no obligation to continue to monitor or provide a rating on the bonds.

S-65

INDEX OF DEFINED TERMS

	Page No.
Adjustment Date	S-20
Advances	S-28
agreements	S-47
Available Funds	S-28
beneficial owner	S-27
Bond Interest Rate	S-29
Bond Owners	S-27
Bond Payment Amount	S-28
Bond Trustee	S-2, S-37
Bondholders	S-27
Bonds	S-26
Book-Entry Bonds	S-27
CEDEL Participant	S-28
Certificate Interest Payment Amount	S-29
Certificate Interest Rate	S-26
Class Principal Amount	S-26
Closing Date	S-3
Code	S-9
Collection Account	S-28
Controlling Class	S-35
Cooperative	S-1
covered	S-19
CPR	S-33
Custodian	S-3
Cut-Off Date	S-3
defective mortgage loan	S-48
Definitive Bond	S-27
Deleted Mortgage Loan	S-48
Depositor	S-2, S-39
disqualified persons	S-60
DTC	S-27
Due Date	S-2
Emergency Economic Stabilization Act of 2008	S-11
equity interest	S-60
ERISA	S-9
Euroclear Operator	S-2
Euroclear Participant	S-28
European Depositaries	S-27
Event of Default	S-34
excess interest	S-5
Fannie Mae	S-11
Federal Home Loan Mortgage Corporation	S-11
Federal National Mortgage Association	S-11
FHA Mortgage Loans	S-19
Financial Intermediary	S-27
Fixed Rate Mortgage Loans	S-19
Freddie Mac	S-11
Gross Margin	S-20
high cost	S-17

I-1

	Page No.
HOEPA	S-17
Home Ownership and Equity Protection Act of 1994	S-17
Homeowner Affordability and Stability Plan	S-16
Indirect Participants	S-27
in-house asset manager	S-60
Insurance Proceeds	S-28
Interest Accrual Period	S-29
Interest Payment Amount	S-29
Invested Amount	S-27
Invested Amount Payment	S-31
Investor Certificate	S-26
Investor Percentage	S-30
issuing entity	S-25, S-37
Issuing Entity	S-2
Issuing Entity Administrator	S-3, S-36
Liquidated Mortgage Loan	S-32
Liquidation Proceeds	S-29
Loan-to-Value Ratio	S-21
Management Agreement	S-25
Master Servicer	S-3
Maximum Rate	S-20
Modeling Assumptions	S-56
monthly advance	S-50
Morgan	S-3
Mortgage	S-48
Mortgage File	S-48
Mortgage Loan Pool	S-32
Mortgage Loan Purchase Agreement	S-8
Mortgage Loans	S-18
Mortgage Note	S-48
mortgage related securities	S-9
Mortgaged Property	S-48
Net Interest Shortfall	S-29
Net Interest Shortfalls	S-29
Notice of Default	S-35
offer of bonds to the public	S-ii
Offered Bonds	S-26
OID	S-59
option ARMs	S-16
Original Invested Amount	S-27
Original Senior Class Principal Amount	S-27
Original Subordinated Class Principal Amount	S-27
Originator	S-3
out of pocket	S-43
overcollateralization	S-5, S-14
Owner Trustee	S-2, S-3
Participants	S-27
parties in interest	S-60
Payment Account	S-28
Payment Date	S-28
Periodic Cap	S-20
Plan	S-9, S-60
Plan Assets Regulation	S-60
Pool Principal Balance	S-30

I-2

	Page No.
Prepayment Assumption	S-33
Prepayment Interest Shortfall	S-29
President’s Financial Stability Plan	S-11
prohibited transaction	S-60
Prospectus Directive	S-ii
PTCE	S-4
Public-Private Investment Program	S-11
qualified professional asset manager	S-60
qualified REIT subsidiaries	S-9, S-18, S-59
qualified REIT subsidiary	S-59
qualified stated interest payments	S-59
real estate investment trust	S-9, S-18
Realized Loss	S-31
Record Date	S-28
Redwood Trust	S-2
Relevant Depositary	S-27
Relevant Implementation Date	S-i
Relevant Member State	S-i
Relief Act Reduction	S-29
REMIC	S-59
Replacement Mortgage Loan	S-48
Residential mortgage-backed securities	S-11
RMBS	S-11
Rules	S-27
RWT Holdings	S-39
SEC	S-25
Seller	S-2
senior	S-4
Senior Bond Interest Rate	S-29
Senior Bonds	S-26
Senior Class Principal Amount	S-26
Senior Interest Payment Amount	S-29
Senior Percentage	S-30
Senior Principal Payment Amount	S-30
Servicer	S-3
servicing agreement	S-49
servicing fee	S-50
servicing fee rate	S-50
SMMEA	S-9
Sponsor	S-2
Stated Principal Balance	S-30
streamline refi	S-53
Structuring Assumptions	S-32
subordinate	S-4
Subordinated Bond Interest Rate	S-29
Subordinated Bonds	S-26
Subordinated Class Principal Amount	S-26
Subordinated Interest Carryover Shortfall	S-29
Subordinated Interest Payment Amount	S-29
Subordinated Percentage	S-30
Subordinated Principal Carryover Shortfall	S-30
Subordinated Principal Payment Amount	S-30

I-3

	Page No.
Subsequent Mortgage Loans	S-18
Substitution Adjustment Amount	S-48
TALF	S-11
TARP	S-11
Term Asset-Backed Securities Loan Facility	S-11
Terms and Conditions	S-5
Troubled Asset Relief Program	S-11
VA Mortgage Loans	S-19
Variable Rate Debt Instruments	S-59

I-4

ANNEX A – CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS

The mortgage loans are expected to have the following approximate aggregate characteristics as of the cut-off date. Prior to the issuance of the certificates, mortgage loans may be removed from the trust fund as a result of incomplete documentation or otherwise, if the depositor deems such removal necessary or appropriate.

Set forth below is a description of certain additional characteristics of the mortgage loans as of the cut-off date (except as otherwise indicated). All percentages of the mortgage loans are approximate percentages by Cut-off Date Principal Balance (except as otherwise indicated). Unless otherwise specified, all Stated Principal Balances of the mortgage loans are as of the cut-off date. In some instances, percentages may not add to 100% due to rounding.

[Cut-off Date Principal Balance

			Percent of				Non-Zero
	Number	Aggregate	Aggregate		Weighted		Weighted		Weighted
	of	Principal	Principal		Average		Average	Average	Average
Cut-off Date	Mortgage	Balance	Balance		Mortgage		Credit	Principal	Original
Principal Balances ($)	Loans	Outstanding	Outstanding		Rate		Score	Balance	LTV
Total		$		%		%		$		%

Current Mortgage Rates

			Percent of				Non-Zero
	Number	Aggregate	Aggregate		Weighted		Weighted		Weighted
	of	Principal	Principal		Average		Average	Average	Average
	Mortgage	Balance	Balance		Mortgage		Credit	Principal	Original
Current Mortgage Rates (%)	Loans	Outstanding	Outstanding		Rate		Score	Balance	LTV
Total:		$		%		%		$		%

Original Term

			Percent of				Non-Zero
	Number	Aggregate	Aggregate		Weighted		Weighted		Weighted
	of	Principal	Principal		Average		Average	Average	Average
	Mortgage	Balance	Balance		Mortgage		Credit	Principal	Original
Original Term (Months)	Loans	Outstanding	Outstanding		Rate		Score	Balance	LTV
Total:		$		%		%		$		%

Remaining Term

			Percent of				Non-Zero
	Number	Aggregate	Aggregate		Weighted		Weighted		Weighted
	of	Principal	Principal		Average		Average	Average	Average
	Mortgage	Balance	Balance		Mortgage		Credit	Principal	Original
Remaining Term (Months)	Loans	Outstanding	Outstanding		Rate		Score	Balance	LTV
Total:		$		%		%		$		%

A-1

Original LTV Ratios

			Percent of				Non-Zero
		Aggregate	Aggregate				Weighted		Weighted
	Number of	Principal	Principal		Weighted		Average	Average	Average
	Mortgage	Balance	Balance		Average		Credit	Principal	Original
Original LTV Ratios (%)	Loans	Outstanding	Outstanding		Mortgage Rate		Score	Balance	LTV
Total		$		%		%		$		%

Credit Score

			Percent of				Non-Zero
	Number	Aggregate	Aggregate		Weighted		Weighted		Weighted
	of	Principal	Principal		Average		Average	Average	Average
	Mortgage	Balance	Balance		Mortgage		Credit	Principal	Original
Credit Score	Loans	Outstanding	Outstanding		Rate		Score	Balance	LTV
Total		$		%		%		$		%

Geographic Distribution of Mortgaged Properties

			Percent of				Non-Zero
		Aggregate	Aggregate		Weighted		Weighted		Weighted
	Number of	Principal	Principal		Average		Average	Average	Average
	Mortgage	Balance	Balance		Mortgage		Credit	Principal	Original
Geographic Distribution	Loans	Outstanding	Outstanding		Rate		Score	Balance	LTV
Total:		$		%		%		$		%

Occupancy Type

			Percent of				Non-Zero
		Aggregate	Aggregate		Weighted		Weighted		Weighted
	Number of	Principal	Principal		Average		Average	Average	Average
	Mortgage	Balance	Balance		Mortgage		Credit	Principal	Original
Occupancy Type	Loans	Outstanding	Outstanding		Rate		Score	Balance	LTV
Total		$		%		%		$		%

Property Type

			Percent of				Non-Zero
		Aggregate	Aggregate				Weighted		Weighted
	Number of	Principal	Principal		Weighted		Average	Average	Average
	Mortgage	Balance	Balance		Average		Credit	Principal	Original
Property Type	Loans	Outstanding	Outstanding		Mortgage Rate		Score	Balance	LTV
Total		$		%		%		$		%

A-2

Loan Purpose

			Percent of				Non-Zero
		Aggregate	Aggregate				Weighted		Weighted
	Number of	Principal	Principal		Weighted		Average	Average	Average
	Mortgage	Balance	Balance		Average		Credit	Principal	Original
Loan Purpose	Loans	Outstanding	Outstanding		Mortgage Rate		Score	Balance	LTV
Total		$		%		%		$		%

Prepayment Penalty

			Percent of				Non-Zero
		Aggregate	Aggregate				Weighted		Weighted
	Number of	Principal	Principal		Weighted		Average	Average	Average
Prepayment Penalty	Mortgage	Balance	Balance		Average		Credit	Principal	Original
(Years)	Loans	Outstanding	Outstanding		Mortgage Rate		Score	Balance	LTV
Total:		$		%		%		$		%

Interest Only Period

							Non-
			Percent of				Zero
	Number	Aggregate	Aggregate		Weighted		Weighted		Weighted
	of	Principal	Principal		Average		Average	Average	Average
	Mortgage	Balance	Balance		Mortgage		Credit	Principal	Original
Interest Only Period (Months)	Loans	Outstanding	Outstanding		Rate		Score	Balance	LTV
Total:		$		%		%		$		%

Loan Documentation

			Percent of				Non-Zero
		Aggregate	Aggregate		Weighted		Weighted		Weighted
	Number of	Principal	Principal		Average		Average	Average	Average
	Mortgage	Balance	Balance		Mortgage		Credit	Principal	Original
Loan Documentation	Loans	Outstanding	Outstanding		Rate		Score	Balance	LTV
Total:		$		%		%		$		%

Mortgage Loan Type

			Percent of				Non-Zero
		Aggregate	Aggregate		Weighted		Weighted
	Number of	Principal	Principal		Average		Average	Average	Weighted
	Mortgage	Balance	Balance		Mortgage		Credit	Principal	Average Original
Mortgage Loan Type	Loans	Outstanding	Outstanding		Rate		Score	Balance	LTV
Total:		$		%		%		$		%

A-3

Underwriting Exception Loans

			Percent of				Non-Zero
		Aggregate	Aggregate		Weighted		Weighted
	Number of	Principal	Principal		Average		Average	Average	Weighted
	Mortgage	Balance	Balance		Mortgage		Credit	Principal	Average Original
	Loans	Outstanding	Outstanding		Rate		Score	Balance	LTV
[Originator Name] [Originator Name]		$		%		%		$		%

Mortgage Loan Modification

			Percent of				Non-Zero
		Aggregate	Aggregate				Weighted
	Number of	Principal	Principal		Weighted		Average	Average	Weighted
	Mortgage	Balance	Balance		Average		Credit	Principal	Average Original
Modification	Loans	Outstanding	Outstanding		Mortgage Rate		Score	Balance	LTV
[Interest Rate Modification]
[Term Modification]
[Principal Balance Reduction]
[Principal Balance Forbearance]
[           ]
Total:		$		%		%		$		%

Distribution of Seasoning 

			Percent of				Non-Zero
		Aggregate	Aggregate				Weighted
	Number of	Principal	Principal		Weighted		Average	Average	Weighted
Months Elapsed	Mortgage	Balance	Balance		Average		Credit	Principal	Average Original
Since Origination	Loans	Outstanding	Outstanding		Mortgage Rate		Score	Balance	LTV
Total:		$		%		%		$		%

Prepayment Penalty Description

			Percent of				Non-Zero
		Aggregate	Aggregate				Weighted
	Number of	Principal	Principal		Weighted		Average	Average	Weighted
Prepayment Penalty	Mortgage	Balance	Balance		Average		Credit	Principal	Average Original
Description	Loans	Outstanding	Outstanding		Mortgage Rate		Score	Balance	LTV
Total:		$		%		%		$		%

A-4

Margin

			Percent of				Non-Zero
		Aggregate	Aggregate				Weighted
	Number of	Principal	Principal		Weighted		Average	Average	Weighted
	Mortgage	Balance	Balance		Average		Credit	Principal	Average Original
Margin (%)	Loans	Outstanding	Outstanding		Mortgage Rate		Score	Balance	LTV
Total:		$		%		%		$		%

Initial Periodic Caps

			Percent of				Non-Zero
		Aggregate	Aggregate				Weighted
	Number of	Principal	Principal		Weighted		Average	Average	Weighted
Initial Periodic	Mortgage	Balance	Balance		Average		Credit	Principal	Average Original
Cap (%)	Loans	Outstanding	Outstanding		Mortgage Rate		Score	Balance	LTV
Total:		$		%		%		$		%

Subsequent Periodic Cap

			Percent of				Non-Zero
		Aggregate	Aggregate				Weighted
	Number of	Principal	Principal		Weighted		Average	Average	Weighted
Subsequent Periodic	Mortgage	Balance	Balance		Average		Credit	Principal	Average Original
Cap (%)	Loans	Outstanding	Outstanding		Mortgage Rate		Score	Balance	LTV
Total:		$		%		%		$		%

A-5

Maximum Mortgage Rate

			Percent of				Non-Zero
		Aggregate	Aggregate		Weighted		Weighted
	Number of	Principal	Principal		Average		Average	Average	Weighted
Maximum Mortgage	Mortgage	Balance	Balance		Mortgage		Credit	Principal	Average Original
Rate (%)	Loans	Outstanding	Outstanding		Rate		Score	Balance	LTV
Total:		$		%		%		$		%

Next Note Rate Adjustment Date

			Percent of				Non-Zero
		Aggregate	Aggregate		Weighted		Weighted
	Number of	Principal	Principal		Average		Average	Average	Weighted
Next Note Rate	Mortgage	Balance	Balance		Mortgage		Credit	Principal	Average Original
Adjustment Date	Loans	Outstanding	Outstanding		Rate		Score	Balance	LTV
Total:		$		%		%		$		%

Originator Concentration

			Percent of				Non-Zero
		Aggregate	Aggregate		Weighted		Weighted
	Number of	Principal	Principal		Average		Average	Average	Weighted
	Mortgage	Balance	Balance		Mortgage		Credit	Principal	Average Original
Originator	Loans	Outstanding	Outstanding		Rate		Score	Balance	LTV
Total:		$		%		%		$		%

Servicer Concentration

			Percent of				Non-Zero
		Aggregate	Aggregate		Weighted		Weighted
	Number of	Principal	Principal		Average		Average	Average	Weighted
	Mortgage	Balance	Balance		Mortgage		Credit	Principal	Average Original
Servicer Concentration	Loans	Outstanding	Outstanding		Rate		Score	Balance	LTV
Total:		$		%		%		$		%

A-6

Rule 15Ga-1 Repurchases

Name of Issuing Entity	Check if Registered	Name of Originator	Total Assets in ABS by Originator			Assets That Were Subject of Demand			Assets That Were Repurchased or Replaced			Assets Pending Repurchase or Replacement (within cure period)			Demand in Dispute			Demand Withdrawn			Demand Rejected
			#	$	(% of principal balance)	#	$	(% of principal balance)	#	$	(% of principal balance)	#	$	(% of principal balance)	#	$	(% of principal balance)	#	$	(% of principal balance)	#	$	(% of principal balance)
Sequoia Mortgage Trust [__], CIK#[_______]	x
SubTotal			0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%
Sequoia Mortgage Trust [__], CIK#[_______]	x
SubTotal			0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%
Total			0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%

A-7

ANNEX B – GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES

Except in certain limited circumstances, the globally offered Sequoia Mortgage Trust [_________], Collateralized Mortgage Bonds (the “Global Bonds”) will be available only in book-entry form. Investors in the Global Bonds may hold such Global Bonds through any of The Depository Trust Company (“DTC”), CEDEL or Euroclear. The Global Bonds will be tradeable 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 Bonds through CEDEL 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 Bonds through DTC will be conducted according to the rules and procedures applicable to U.S. corporate debt obligations and prior collateralized mortgage bond issues.

Secondary cross-market trading between CEDEL or Euroclear and DTC Participants holding Global Bonds will be effected on a delivery-against-payment basis through the respective Depositaries of CEDEL and Euroclear (in such capacity) and as DTC Participants.

Non-U.S. holders (as described below) of Global Bonds 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 Bonds will be held in book-entry form by DTC in the name of Cede & Co. as nominee of DTC. Investors’ interests in the Global Bonds will be represented through financial institutions acting on their behalf as direct and indirect participants in DTC (each, a “DTC Participant”). As a result, CEDEL 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 Bonds through DTC will follow the settlement practices’ applicable to other collateralized mortgage bond issues. Investor securities custody accounts will be credited with their holdings against payment in same-day funds on the settlement date.

Investors electing to hold their Global Bonds through CEDEL 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 Bonds 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 collateralized mortgage bond issues in same-day funds.

Trading Between CEDEL and/or Euroclear Participants. Secondary market trading between CEDEL Participants or Euroclear Participants will be settled using the procedures applicable to conventional Eurobonds in same-day funds.

B-1

Trading Between DTC Seller and CEDEL or Euroclear Purchaser. When Global Bonds are to be transferred from the account of a DTC Participant to the account of a CEDEL Participant or a Euroclear Participant, the purchaser will send instructions to CEDEL or Euroclear through a CEDEL Participant or Euroclear Participant at least one business day prior to settlement. CEDEL or Euroclear will instruct the respective Depositary, as the case may be, to receive the Global Bonds against payment. Payment will include interest accrued on the Global Bonds 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 Bonds. After settlement has been completed, the Global Bonds will be credited to the respective clearing system and by the clearing system, in accordance with its usual procedures, to the CEDEL 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 Bonds 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 CEDEL or Euroclear cash debt will be valued instead as of the actual settlement date.

CEDEL 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 CEDEL or Euroclear. Under this approach, they may take on credit exposure to CEDEL or Euroclear until the Global Bonds are credited to their accounts one day later.

As an alternative, if CEDEL or Euroclear has extended a line of credit to them, CEDEL 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, CEDEL Participants or Euroclear Participants purchasing Global Bonds would incur overdraft charges for one day, assuming they cleared the overdraft when the Global Bonds were credited to their accounts. However, interest on the Global Bonds would accrue from the value date. Therefore, in many cases the investment income on the Global Bonds earned during that one-day period may substantially reduce or offset the amount of such overdraft charges, although this result will depend on each CEDEL 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 Bonds to the respective European Depository for the benefit of CEDEL 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 CEDEL or Euroclear Seller and DTC Purchaser. Due to time zone differences in their favor, CEDEL Participants and Euroclear Participants may employ their customary procedures for transactions in which Global Bonds are to be transferred by the respective clearing system, through the respective Depositary, to a DTC Participant. The seller will send instructions to CEDEL or Euroclear through a CEDEL Participant or Euroclear Participant at least one business day prior to settlement. In these cases CEDEL or Euroclear will instruct the respective Depositary, as appropriate, to deliver the Global Bonds to the DTC Participant’s account against payment. Payment will include interest accrued on the Global Bonds 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 CEDEL Participant or Euroclear Participant the following day, and receipt of the cash proceeds in the CEDEL 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 CEDEL 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 valued date (i.e., the trade fails), receipt of the cash proceeds in the CEDEL Participant’s or Euroclear Participant’s account would instead be valued as of the actual settlement date.

Finally, day traders that use CEDEL or Euroclear and that purchase Global Bonds from DTC Participants for delivery to CEDEL 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 CEDEL or Euroclear for one day (until the purchase side of the day trade is reflected in their CEDEL or Euroclear accounts) in accordance with the clearing system’s customary procedures;
(b)	borrowing the Global Bonds in the U.S. from a DTC Participant no later than one day prior to settlement, which would give the Global Bonds sufficient time to be reflected in their CEDEL or Euroclear account in order to settle the sale side of the trade; or

B-2

(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 CEDEL Participant or Euroclear Participant.

CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS

A holder that is not a “United States person” within the meaning of Section 7701(a)(30) of the Internal Revenue Code of 1986 holding a book-entry Bond through Clearstream, Euroclear or DTC may be subject to U.S. withholding tax at a rate of 30% unless such holder provides certain documentation to the Trustee or to the U.S. entity required to withhold tax (the “U.S. withholding agent”) establishing an exemption from withholding. A holder that is not a United States person may be subject to 30% withholding unless:

I. the [_______], on behalf of the Trustee, or the U.S. withholding agent receives a statement —

(a) from the holder on Internal Revenue Service (“IRS”) Form W-8BEN (or any successor form) that —

(i) is signed by the Bondholder under penalty of perjury,

(ii) certifies that such owner is not a United States person, and (iii) provides the name and address of the Bondholder, or

(b) from a securities clearing organization, a bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business that —

(i)	is signed under penalties of perjury by an authorized representative of the financial institution,
(ii)	states that the financial institution has received an IRS Form W-8BEN (or any successor form) from the certificateholder or that another financial institution acting on behalf of the certificateholder has received such IRS Form W-8BEN (or any successor form),
(iii)	provides the name and address of the Bondholder, and
(iv)	attaches the IRS Form W-8BEN (or any successor form) provided by the Bondholder;

II.	the holder claims an exemption or reduced rate based on a treaty and provides a properly executed IRS Form W-8BEN (or any successor form) to the Issuing Entity Administrator or the U.S. withholding agent;
III.	the holder claims an exemption stating that the income is effectively connected to a U.S. trade or business and provides a properly executed IRS Form W-8ECI (or any successor form) to the [______] or the U.S. withholding agent; or
IV.	the holder is a “nonwithholding partnership” and provides a properly executed IRS Form W-8IMY (or any successor form) with all necessary attachments to the Trustee or the U.S. withholding agent.  Certain pass-through entities that have entered into agreements with the Internal Revenue Service (for example “qualified intermediaries”) may be subject to different documentation requirements; and such holders are encouraged to consult with their tax advisors when purchasing the Bond.

A book-entry Bondholder holding through Clearstream or Euroclear provides the forms and statements referred to above by submitting them to the person through which he holds an interest in the book-entry Bond, which is the clearing agency, in the case of persons holding directly on the books of the clearing agency. Under certain circumstances a Form W-8BEN, if furnished with a taxpayer identification number, (“TIN”), will remain in effect until the status of the beneficial owner changes, or a change in circumstances makes any information on the form incorrect. A Form W-8BEN, if furnished without a TIN, and a Form W-8ECI will remain in effect for a period starting on the date the form is signed and ending on the last day of the third succeeding calendar year, unless a change in circumstances makes any information on the form incorrect.

B-3

In addition, a book-entry Bondholder holding through Clearstream, Euroclear or DTC may be subject to backup withholding unless the holder:

I.         provides a properly executed IRS Form W-8BEN, Form W-8ECI or Form W-8IMY(or any successor forms) if that person is not a United States person;

II.        provides a properly executed IRS Form W-9 (or any substitute form) if that person is a United States person; or

III.       is a corporation, within the meaning of Section 7701(a) of the Internal Revenue Code of 1986, or otherwise establishes that it is a recipient exempt from United States backup withholding.

This summary does not deal with all aspects of federal income tax withholding or backup withholding that may be relevant to investors that are not “United States persons” within the meaning of Section 7701(a)(30) of the Internal Revenue Code. Such investors are encouraged to consult their own tax advisors for specific tax advice concerning their holding and disposing of the book-entry Bond.

The term “United States person” means (1) a citizen or resident of the United States, (2) a corporation or partnership organized in or under the laws of the United States or any state or the District of Columbia (other than a partnership that is not treated as a United States person under any applicable Treasury regulations), (3) an estate the income of which is includible in gross income for United States tax purposes, regardless of its source, or (4) a trust if a court within the United States is able to exercise primary supervision over the administration of the issuing entity 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 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 so treated also will be considered United States persons.

B-4

You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus. We have not authorized anyone to provide you with any other information or to make any representations not contained in this prospectus supplement and the prospectus. This prospectus supplement and the prospectus do not constitute an offer to sell, or a solicitation of an offer to buy, the securities offered hereby by anyone in any jurisdiction in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make any such offer or solicitation.

$[_________] (Approximate)

[LOGO] Sequoia MORTGAGE trust

[Collateralized-] [Mortgage-] [Asset-] Backed Bonds

[LOGO]

Sponsor and Seller [RWT Holdings]

[LOGO]

Seller [RRAC]

[LOGO]

Depositor

[LOGO]

Issuing Entity

PROSPECTUS SUPPLEMENT

[INSURER] [LOGO]

[UNDERWRITER(S)] [LOGO]

[Date of prospectus supplement]

Dealers will be required to deliver a prospectus supplement and prospectus when acting as underwriters of the bonds offered hereby and with respect to their unsold allotments or subscriptions. In addition, all dealers selling the bonds, whether or not participating in this offering, may be required to deliver a prospectus supplement and prospectus until ninety days after the date of this prospectus supplement. 

Version 2

The information in this prospectus supplement is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus supplement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, [____________], 201[_]

Prospectus Supplement 

(To Prospectus dated [______________], 201[_])

$[_______] (Approximate)

[LOGO] Sequoia Mortgage Trust

[Mortgage Pass-Through] [Asset-] Backed Certificates

[LOGO] RWT Holdings, Inc. [Sponsor and Seller]

[LOGO] Redwood Residential Acquisition Corporation [Seller]

[LOGO] [Depositor]

[LOGO] [Issuing Entity]

Consider carefully the risk factors beginning on page S-[__] of this prospectus supplement and on page [__] of the prospectus.
	The Issuing Entity will issue:
	·	[___] class(es) of Senior Class [___] Certificates;
For a list of capitalized terms used in this prospectus supplement, see the index of defined terms on page I-1 of the prospectus	·	[___] classes of Subordinated Class [___] Certificates; and
	·	[a residual certificate.]
	The Certificates:
The certificates are redeemable only under circumstances described in this prospectus supplement.	·	Will be collateralized by primarily year [fixed adjustable] rate, mortgage loans secured by first liens on one- to four-family residential properties;
The certificates represent obligations of the issuing entity only and do not represent an interest in or obligation of the sponsor, the depositor or any of their affiliates. This prospectus supplement may be used to offer and sell certificates only if accompanied by the prospectus.	·	The classes of certificates offered by this prospectus supplement are listed, together with their initial class principal amounts and interest rates,  under “Summary of Terms—The Offered Certificates” on page S-[__] of this prospectus supplement.  This prospectus supplement and the accompanying prospectus relate only to the offering of certificates listed in the table on page S-[__] and not to the ownership certificate that will be issued by the issuing entity as described in this prospectus supplement;
	·	Pay all holders of certificates the amounts of principal and interest due thereon on the [_____] day of each month, or if such day is not a business day, the next succeeding business day, commencing on [_________], 200[__]; and
	·	Will have various forms of credit enhancement of the types described in this prospectus supplement, including [excess interest,] [overcollateralization,] [subordination,] [a certificate insurance policy,] [and] [interest rate swap agreements]. [Forms of credit enhancement to be described as applicable.]

[INSURER] [LOGO]

On or about [______________], delivery of the certificates offered by this prospectus supplement will be made through the book-entry facilities of the Depository Trust Company, Clearstream Banking Luxembourg and the Euroclear System.

The certificates offered by this prospectus supplement will be purchased by the underwriter(s) from the issuing entity, and are being offered by the underwriter(s) from time to time for sale to the public in negotiated transactions or otherwise at varying prices determined at the time of sale. The underwriter(s) have the right to reject any order. Proceeds to the issuing entity from the sale of these certificates will be approximately [__]% of their initial total class principal amount before deducting expenses.

[UNDERWRITER(S)] [LOGO]

The issuing entity will make a REMIC election for federal income tax purposes.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus supplement or the accompanying prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

Important Notice About Information Presented in this Prospectus Supplement
and the Accompanying Prospectus

We provide information to you about the certificates offered by this prospectus supplement in two separate documents that progressively provide more detail: (1) the accompanying prospectus, which provides general information, some of which may not apply to your certificates and (2) this prospectus supplement, which describes the specific terms of your certificates.

The information presented in this prospectus supplement is intended to enhance the general terms of the accompanying prospectus.

We include cross-references in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find further related discussions. The following table of contents and the table of contents included in the accompanying prospectus provide the pages on which these captions are located.

Dealers will deliver a prospectus supplement and prospectus when acting as underwriters of the certificates and with respect to their unsold allotments and subscriptions. In addition, all dealers selling the certificates will be required to deliver a prospectus supplement and prospectus for ninety days following the date of this prospectus supplement

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

For European Investors Only

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), the underwriter has represented and agreed that with respect 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:

S-i

(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 issuing entity 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.

S-ii

TABLE OF CONTENTS

	Page No.
THE OFFERED CERTIFICATES	1
SUMMARY OF TERMS	2
Sponsor	2
Seller	2
Depositor	2
Issuing Entity	2
Trustee	2
Issuing Entity Administrator	2
Master Servicer	2
Servicer	2
Originator	3
Custodian	3
Cut-Off Date	3
Closing Date	3
The Certificates	3
Distributions of Interest	3
Distributions of Principal	4
Priority of Distributions	4
Limited Recourse	4
Credit Enhancement	4
Maturity Date	5
Fees and Expenses	6
The Mortgage Loans	6
[Pre-funding Feature	7
Mortgage Loan Representations and Warranties	7
Mortgage Loan Servicing	8
Optional Termination	8
Tax Status	8
ERISA Considerations	8
Legal Investment	8
Certificate Rating	8
RISK FACTORS	9
The Current Turbulence in the Financial Markets and Economy May Adversely Affect the Performance and Market Value of Your Securities and These Conditions May Not Improve in the Near Future	9
Downgrade of Long-term Ratings of Eurozone Nations May Adversely Affect the Market Value of the Securities	9
Recent Trends in the Residential Mortgage Market May Adversely Affect the Performance and Market Value of Your Securities	10
Financial Regulatory Legislative Reform and Related Regulations Could Have a Significant Impact	11
Potential Changes in Ratings Present Risks	12
Pre-offering Review of the Mortgage Loans Underlying the Securities May Not Reveal Aspects of the Mortgage Loans  Which Could Lead to Losses	12
[Risks Related to Mortgage Loans with Interest-Only Payments	12
[Special Default Risk of Second Lien Mortgage Loans	13
[Risks Related to Simultaneous Second Liens and Other Borrower Debt	13
Geographic Concentration of Mortgage Loans	13
Mortgage Loan Interest Rates May Limit Interest Rates on the Certificates	13
Potential Inadequacy of Credit Enhancement	14
[Risks Related to Amounts in the Pre-Funding Account being Applied to Pay Principal on the Certificates]	16
Unpredictability and Effect of Prepayments	16
Delay in Receipt of Liquidation Proceeds; Liquidation Proceeds May Be Less Than Mortgage Balance	17
Risks Associated With New Laws Relating to Mortgage Loan Servicing	17
Violation of Various Federal, State and Local Laws May Result in Losses on the Mortgage Loans	17

S-iii

Mortgage Loan Modification Programs and Future Legislative Action May Adversely Affect the Performance and Market Value of Your Securities	18
Special Assessments and Energy Efficiency Liens May Take Priority Over the Mortgage Lien	18
Helping Families Save Their Homes Act	18
Risks Associated With Potential New Laws Relating to Mortgage Loan Origination or Ownership	19
Predatory Lending Laws/High Cost Loans	19
Bankruptcy or Insolvency Proceedings Could Delay or Reduce Payments on the Certificates	19
DESCRIPTION OF THE MORTGAGE POOL	20
General	20
[The Fixed Rate Mortgage Loans	21
[Adjustable Mortgage Rates	21
[The Indices	22
[Primary Mortgage Insurance	22
Certain Characteristics of the Mortgage Loans	22
[Delinquency and Loss Information for the Pool Assets	22
[Conveyance of Subsequent Mortgage Loans	22
STATIC POOL INFORMATION	24
ADDITIONAL INFORMATION	24
ISSUING ENTITY	25
General	25
The Ownership Certificate	25
DESCRIPTION OF THE CERTIFICATES	26
General	26
Book-Entry Certificates	26
Payments on Mortgage Loans; Account	27
Payments	28
Interest	28
Principal	30
Priority of Distributions; Allocation of Shortfalls	30
Stated Maturity	32
Structuring Assumptions	32
Optional Purchase of Defaulted Loans	33
Weighted Average Lives of the Certificates	33
Decrement Tables	33
PERCENT OF INITIAL CLASS PRINCIPAL AMOUNTS OUTSTANDING	33
Optional Purchase of the Mortgage Loans	33
Controlling Class Under the Pooling and Servicing Agreement	33
Credit Enhancement	34
Subordination	34
The Certificate Insurance Policy	34
The Insurer	34
The Issuing Entity Administrator	34
The Trustee	35
The Issuing Entity	35
The Custodian	35
FEES AND EXPENSES OF THE ISSUING ENTITY	36
MATERIAL LEGAL PROCEEDINGS	37
THE SPONSOR AND THE SELLER	38
THE DEPOSITOR	40
AFFILIATIONS AND RELATED TRANSACTIONS	40
THE ORIGINATOR	40
THE MASTER SERVICER AND THE SERVICER	41
Master Servicer	41
Servicer	41
Delinquency and Foreclosure Experience.	41
ADMINISTRATION OF THE ISSUING ENTITY	44

S-iv

Servicing and Administrative Responsibilities	44
Issuing Entity Accounts	45
Example of Payments	46
THE AGREEMENTS	48
General	48
Assignment of the Mortgage Loans	48
Mortgage Loan Servicing	49
Administration	53
Reports to Certificateholders	53
Voting Rights	53
Termination of the Issuing Entity	53
YIELD, PREPAYMENT AND WEIGHTED AVERAGE LIFE	54
General	54
Overcollateralization	56
Subordination of the Subordinate Certificates	56
Weighted Average Life	56
USE OF PROCEEDS	60
MATERIAL FEDERAL INCOME TAX CONSEQUENCES	60
[General	60
Tax Treatment of the Offered Certificates	60
Original Issue Discount	60
The Cap Contract Components	61
Information Reporting	62
Other Matters	62
ERISA MATTERS	62
General	62
Purchases of the Offered Certificates	62
METHOD OF DISTRIBUTION	63
LEGAL MATTERS	64
RATINGS	64
INDEX OF DEFINED TERMS	I-1
ANNEX A – CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS	A-1
ANNEX B– GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES	B1

S-v

THE OFFERED CERTIFICATES 

The certificates consist of the classes of certificates listed in the table below, together with the Class [___], Class [__], and Class [__] Certificates. Only the classes of certificates listed in the tables below are offered by this prospectus supplement.

Class Initial Class Principal Amount⁽¹⁾ Initial Interest Rate⁽²⁾ Interest Rate Formula Principal Type Interest Type

(1) These balances are approximate and are subject to an increase or decrease of up to 5%, as described in this prospectus supplement.

(2) Reflects the interest rate as of the closing date.

(3) An annual rate equal to the weighted average of the net mortgage rates of the mortgage loans during the applicable period, as described in this Prospectus Supplement.

(4) The designation “N/R” means that the specified rating agency will not rate the certificates of that class.

The offered certificates will also have the following characteristics:

Class Record Date⁽¹⁾ Delay/Accrual Period⁽²⁾ Interest Accrual Convention Final Scheduled Payment Date⁽³⁾ Expected Final Payment Date⁽⁴⁾ Minimum Denomination or Percentage Interest⁽⁵⁾ Incremental Denomination CUSIP Number

S-1

SUMMARY OF TERMS

· This summary highlights selected information from this prospectus supplement 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 offering of the certificates, you should carefully read this entire prospectus supplement and the accompanying prospectus.

· While the summary contains an overview of certain calculations, cash flow priorities and other information to aid your understanding, you should read carefully the full description of these calculations, cash flow priorities and other information in this prospectus supplement and the accompanying prospectus before making any investment decision.

· Whenever we refer to a percentage of some or all of the mortgage loans in the trust fund, that percentage has been calculated on the basis of the total stated principal balance of those mortgage loans as of [_______, ____] unless we specify otherwise. We explain in this prospectus supplement how the stated principal balance of a mortgage loan is determined. Whenever we refer in this Summary of Terms or in the Risk Factors section to the total stated principal balance of any mortgage loans, we mean the total of their stated principal balances determined by that method, unless we specify otherwise.

Sponsor 

[RWT Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of Redwood Trust, Inc. (the “Sponsor”)]

Seller

[RWT Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of Redwood Trust, Inc.], or [Redwood Residential Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of RWT Holdings, Inc.] has previously acquired the mortgage loans, directly or indirectly from the originators. On the closing date, [_______________________], as seller (the “Seller”), will sell all of its interest in the mortgage loans to the depositor.

Depositor

[Sequoia Mortgage Funding Corporation] [or] [Sequoia Residential Funding, Inc.], a Delaware special purpose corporation and indirect wholly-owned subsidiary of Redwood Trust, Inc. (the “Depositor”) On the closing date, [Sequoia Mortgage Funding Corporation] [or] Sequoia Residential Funding, Inc.] will assign all of its interest in the mortgage loans to the issuing entity. The depositor’s address is One Belvedere Place, Suite [320] [or] [330], Mill Valley, California 94941, and its telephone number is (415) 389-7373.

Issuing Entity

[Sequoia Mortgage Loan Trust [______________]], [a statutory trust established under the laws of the State of Delaware] [or] [a common law trust formed under the laws of the State of New York] (the “Issuing Entity”).

Trustee

[_______________________], a banking corporation organized under the laws of [_____________].

Issuing Entity Administrator

[_______________________] (the “Issuing Entity Administrator”), will perform certain administrative duties with respect to the certificates, on behalf of the certificate trustee including acting as authentication agent, calculation agent, paying agent, certificate registrar and the party responsible for preparing distribution statements and tax information for certificateholders and preparing tax filings for the issuing entity.

Master Servicer

[_______________________] will act as master servicer for the mortgage loans (the “Master Servicer”).

Servicer

[_______________________] (the “Servicer”) will be servicer of the mortgage loans. [All Servicers that service 10% or more of the pool assets will be identified.]

S-2

Originator

[_______________________] (the “Originator”) originated the mortgage loans, directly or through its correspondents. [All Originators of 10% or more of the pool assets will be identified.]

Custodian

[_______________________] (the “Custodian”) will maintain custody of the mortgage files relating to the mortgage loans, on behalf of the issuing entity.

Cut-Off Date

[____________, 200__] (the “Cut-Off Date”).

Closing Date

On or about [___________, 200__] (the “Closing Date”).

The Certificates

The classes of Sequoia Mortgage Trust [_______] Certificates, Series [_____], (the “Certificates”), issued with the initial approximate characteristics set forth under “The Offered Certificates” in the table on page S-1.

The Offered Certificates [other than _______] will be issued in book-entry form, and will be issued in minimum denominations in principal amount of $[________] and integral multiples of $[_______] in excess thereof.

The certificates will represent obligations of the issuing entity and will be secured by collateral consisting of [describe assets of the issuing entity].

The issuing entity will also issue an ownership certificate which will not be entitled to monthly payments of principal and interest, but rather solely to any excess cashflow remaining after all payments on the certificates and certain other fees and expenses of the issuing entity have been made on the related distribution date.

The ownership certificate and the Class [_______] Certificates are not offered by this prospectus supplement.  The Offered Certificates will have an approximate total initial principal amount of $[_______].  Any difference between the total principal amount of the Offered Certificates on the date they are issued and the approximate total principal amount of the Offered Certificates as reflected in this prospectus supplement will not exceed [________]%.

Principal and interest on the certificates will be paid on the [25]th day of each month, beginning in [_______].  However, if the [25]th day is not a business day, payments will be made on the next business day after the [25]th day of the month.

The rights of holders of the Class [____] Certificates to receive payments of principal and interest will be subordinate to the rights of the holders of certificates having a higher priority of distribution, as described in “—Enhancement of Likelihood of Payment on the Certificates—Subordination of Payments” below.  We refer to the Class [____] Certificates as “subordinate” certificates, and we refer to the Class [____] Certificates as “senior” certificates.

Distributions of Interest

On each distribution date, to the extent of available funds, each class of certificates will, subject to the limitations described herein, be entitled to receive accrued and unpaid interest determined on the basis of the outstanding class principal amount of such class immediately prior to such distribution date, the applicable certificate interest rate and the related accrual period.

Interest will accrue on each class of certificates at the applicable annual rates described as follows:  [the least of (1) the applicable annual rate as described in the table on page S-[__], (2) [___]% annually and (3) the available funds rate].

[If the option to purchase the mortgage loans is not exercised by the holder of the ownership certificate on the first distribution date following the month in which the total principal balance of the mortgage loans declines to less than [     ]% of their initial total principal balance as described under “—Optional Purchase of the Mortgage Loans” below, then with respect to the next distribution date and each distribution date thereafter, the interest rate calculation described in the paragraph above will be increased for each class of certificates, by substituting in clause (1) the applicable annual rate as described in the table on page S-[_____], subject in each case to the limitations described above.]  [To be provided as applicable.] 

S-3

[We refer you to “—Optional Purchase of the Mortgage Loans” below.]  

The available funds rate is a limitation generally based on the amount of interest collections received from the mortgage loans during the applicable collection period, net of certain fees and expenses of the issuing entity.

For a complete description of the available funds rate and the priority of distribution of interest, see “Description of the Certificates—Payments of Interest” in this prospectus supplement.

Distributions of Principal

The amount of principal payable on each class of certificates will be determined by (1) funds received on the mortgage loans that are available to make payments of principal on the certificates, (2) formulas that allocate portions of principal payments received on the mortgage loans among different classes of certificates and (3) the application of excess interest to pay principal on the certificates, as described in this prospectus supplement.

Funds received on the mortgage loans may consist of monthly scheduled payments as well as unscheduled payments resulting from prepayments by borrowers, liquidation of defaulted mortgage loans, or purchases of mortgage loans under the circumstances described in this prospectus supplement.

The manner of allocating payments of principal on the mortgage loans will differ, as described in this prospectus supplement, [depending upon whether a distribution date occurs before the stepdown date described in this prospectus supplement or on or after that date, and] depending upon whether the delinquency and loss performance of the mortgage loans is worse than certain levels set by the rating agencies.

We refer you to “Description of the Certificates—Payments of Principal” in this prospectus supplement.

Priority of Distributions

On each distribution date, available funds in respect of the mortgage loans will be distributed in the following order of priority: [Description of flow of funds, payment priorities and allocations to be provided for each series of certificates.]  [To the extent helpful to the understanding of the securities, a graphic illustration of the flow of funds, distribution priorities and allocations will be included.]

Any realized losses on the mortgage loans not covered by any credit enhancement feature will be allocated first to the Investor Certificate, second to the subordinated certificates and third, in the event the insurer defaults on its obligations under the certificate insurance policy, to the senior certificates.

We refer you to “Description of the Certificates — Priority of Distributions and Allocation of Shortfalls”in this prospectus supplement for more information.

Limited Recourse

The only source of cash available to make interest and principal payments on the certificates will be the assets of the issuing entity pledged to secure the certificates.  The issuing entity will have no source of cash other than collections and recoveries on the mortgage loans through insurance or otherwise [and any payments received under the interest rate [cap] [swap] agreement[s] described below].  No other entity will be required or expected to make any payments on the certificates.

Credit Enhancement

The payment structure of this securitization includes excess interest, overcollateralization, subordination [as well as a certificate insurance policy] [or] [The Certificates will not be insured by any surety certificate.] [and interest rate swap agreements] to enhance the likelihood that holders of more senior classes of certificates will receive regular distributions of interest and principal.

The Class [______] Certificates are more likely to experience losses than the Class [______] Certificates and the senior certificates; the Class [______] Certificates are more likely to experience losses than the senior certificates.

S-4

Excess Interest. The mortgage loans owned by the issuing entity will bear interest each month that, in the aggregate, is expected to exceed the amount needed to pay monthly interest on the certificates and certain fees and expenses of the issuing entity.  This “excess interest” received from the mortgage loans each month will be available to absorb realized losses on the mortgage loans and to achieve and maintain overcollateralization at the required levels.

Overcollateralization. On the closing date, the total principal balance of the mortgage loans is expected to approximately equal the total principal amount of the certificates.  Thereafter, to the extent described in this prospectus supplement, commencing with the first distribution date, any interest received on the mortgage loans in excess of the amount needed to pay interest on the certificates and certain fees and expenses of the issuing entity (referred to in this prospectus supplement as “excess interest”) will be used to reduce the total principal amount of the certificates until the total principal balance of the mortgage loans exceeds the total principal amount of the certificates by an amount set by the rating agencies. We call this condition “overcollateralization.” We cannot, however, assure you that sufficient excess interest will be generated by the mortgage loans in the mortgage pool to achieve and maintain the required level of overcollateralization set by the rating agencies.

Subordination. The subordinated certificates will provide credit enhancement for the senior certificates.

The rights of holders of the subordinated certificates to receive payments with respect to the mortgage loans will be subordinated to such rights of the holders of the senior certificates. As described in this prospectus supplement, if losses on the mortgage loans exceed excess interest and overcollateralization, the certificates will incur losses in inverse order of seniority.

Certificate Insurance Policy. [___________] will issue a financial guaranty insurance policy pursuant to which it will irrevocably and unconditionally guarantee payment of the insured payment if the certificate trustee determines that available funds for a distribution date are less than the senior certificate interest payment amount and the senior certificate principal payment amount. The insurer’s claims paying ability is rated [________] by [_______________].

Interest Rate Swap Agreements. On or before the closing date, the issuing entity will enter into [____] interest rate [cap] [swap] agreements[s] with [___], as [cap] [swap] counterparty.  [On each distribution date, the issuing entity will be obligated to make fixed payments under each interest rate swap agreement at a rate of [____]% (for [___]-year hybrid mortgage loans), [___] (for [___]-year hybrid mortgage loans) and [____]% (for [___]-year hybrid mortgage loans), and the swap counterparty will be obligated to make floating payments at LIBOR (as determined pursuant to the related interest rate swap agreement), in each case calculated on a notional amount equal to the lesser of (i) the outstanding aggregate principal balance of the [____]-year hybrid mortgage loans, [____]-year hybrid mortgage loans or [____]-year hybrid mortgage loans, as applicable, or (ii) the applicable scheduled notional amount for the related distribution date, and adjusted to a monthly basis. To the extent that a fixed payment exceeds a floating payment on any distribution date, amounts otherwise available to certificateholders will be applied to make a net payment to the swap counterparty, and to the extent that a floating payment exceeds a fixed payment on any distribution date, the swap counterparty will owe a net payment to the issuing entity. Any net amounts received by the issuing entity under the interest rate swap agreement will be applied to pay interest shortfalls and basis risk shortfalls and achieve and maintain overcollateralization as described in this prospectus supplement.]  [Under the cap agreement[s], the cap counterparty will be required to make monthly payments to the issuing entity for certain specified periods if one-month LIBOR moves above certain specified rates.]  The interest rate [cap] [swap] agreement[s] will provide only temporary, limited protection against upward movements in one-month LIBOR, and, to the extent described in this prospectus supplement, may diminish the amount of basis risk shortfalls experienced by the certificates during the periods the interest rate [cap] [swap] agreement[s] are in effect as specified in the [related] interest rate [cap] [swap] agreement.]

[Third party providers of credit support for 10% or more of the pool assets to be provided as applicable.]

[Other forms of credit enhancement to be identified and described as applicable for each transaction.]

Maturity Date

The maturity date for the certificates will occur on the distribution date in [_______].  As to each class, the actual final distribution date may be earlier, and could be substantially earlier, than that class’s final maturity date.

S-5

Fees and Expenses

Before payments are made on the certificates, and by funds from interest collections, the servicer will be paid a monthly fee, depending on the characteristics of the mortgage loans as described in this prospectus supplement, calculated as [___]% annually, or [____]% annually until the first adjustment date and [___]% annually thereafter, on the principal balances of the related mortgage loans, as described in this prospectus supplement. Such servicer fee will be deducted by the servicer prior to remittance of funds to the trustee for distribution to securityholders.

In addition, the applicable percentage rate described above will increase by an annual percentage ranging from [____]% annually to [___]% annually with respect to each mortgage loan covered by a lender-paid loan-level primary mortgage insurance policy.  The servicer will pay the fees related to the lender-paid loan-level primary mortgage insurance policies on behalf of the issuing entity.

The trustee and the custodian will each be paid a fixed annual fee from investment earnings on funds held in the certificate distribution account.  The master servicer will receive as compensation the investment income on funds held in the certificate distribution account after payment of the fees of the certificate trustee and the custodian.  The issuing entity administrator will not receive any additional compensation with respect to the performance of its duties on behalf of the issuing entity.

The servicer, the master servicer, the trustee, the issuing entity administrator and the custodian will also be entitled to reimbursement of certain expenses from the issuing entity before payments are made on the certificates.

The Mortgage Loans

Statistical Information. The statistical information on the mortgage loans presented herein is based on the principal balance of such mortgage loans as of the cut-off date. Such information does not take into account defaults, delinquencies and prepayments that may have occurred with respect to the mortgage loans since such date. As a result, the statistical distribution of the characteristics in the final mortgage pool as of the closing date will vary from the statistical distribution of such characteristics as presented in this prospectus supplement, although such variance will not be material.

General. On the closing date, the assets of the issuing entity will consist primarily of [___ pool[s] of] [described mortgage loans] with a total principal balance as of [_____], of approximately $[_____].  The mortgage loans will be secured by mortgages, deeds of trust or other security instruments, all of which are referred to in this prospectus supplement as mortgages.  [Describe any second lien mortgage loans.]

The mortgage loans have interest rates that adjust at the intervals and based on the indices described in this prospectus supplement.  Approximately [_____]% of the mortgage loans have original terms to maturity of [___] years, approximately [___]% of the mortgage loans have original terms to maturity of [____] years, and approximately [___]% of the mortgage loans have original terms to maturity of [____] years.

The mortgage loans will not be insured or guaranteed by any government agency.

The Depositor expects that the mortgage loans will have the following approximate characteristics as of the cut-off date:

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Mortgage Pool Summary

	Range or Total	Weighted Average	Total Percentage
Number of Mortgage Loans
Total Principal Balance
Principal Balances
Mortgage Rates
Original Terms to Maturity (in months)
Remaining Terms to Maturity (in months)
Original Loan-to Value Ratios
Number of One-Year LIBOR Mortgage Loans
Number of One-Year CMT Mortgage Loans
Number of Interest Only Mortgage Loans
Geographic Concentration in Excess of 10.00% of the Total Scheduled Principal Balance:
·.... California
Maximum Single Zip Code Concentration
Credit Scores
Number of Mortgage Loans with Prepayment Penalties at Origination
Gross Margins
Maximum Mortgage Rates
Minimum Mortgage Rates
Months to Next Mortgage Rate Adjustment
Initial Caps
Periodic Caps

*   The weighted average is based only on the mortgage loans having credit scores.

[Pre-funding Feature

On the closing date, the securities administrator will deposit up to approximately $[    ] of the net proceeds from the issuance of the certificates, which represents approximately [    ]% of the mortgage loans as of the cut-off date, into a separate pre-funding account established for the mortgage pool, to acquire additional mortgage loans for the mortgage pool. During the pre-funding period (i.e., from the closing date to[    ]) amounts on deposit in the pre-funding account may be withdrawn by the securities administrator from time to time to purchase from the depositor additional mortgage loans meeting the same criteria applicable to the mortgage pool described in this prospectus supplement, provided certain other conditions are satisfied at the time of purchase. The seller has identified additional mortgage loans that are expected to have the characteristics described under “Description of the Mortgage Pool— Conveyance of Subsequent Mortgage Loans.” Funds on deposit in the pre-funding account may only be applied to acquire additional mortgage loans for the mortgage pool.

If funds in the pre-funding account are not completely used for that purpose during the pre-funding period, the remaining funds in the pre-funding account will be paid as a principal prepayment to related certificateholders in accordance with the principal distribution priority provisions described in this prospectus supplement. This distribution will be made on the [    ] distribution date. The depositor anticipates that substantially all of the funds in the pre-funding account will be used to purchase additional mortgage loans prior to the close of the pre-funding period.

At the closing date, the depositor will also deposit approximately $[    ] in a capitalized interest account for use by the securities administrator as needed during the pre-funding period to ensure that all required interest distributions are made on the certificates.

See “DESCRIPTION OF THE MORTGAGE POOL; Conveyance of Subsequent Mortgage Loans” in this prospectus supplement and “THE ISSUING ENTITIES AND THE ISSUING ENTITY ASSETS—The Loans” and “THE ISSUING ENTITIES AND THE ISSUING ENTITY ASSETS—Pre-Funding” in the prospectus for a general description of the characteristics of the initial and subsequent mortgage loans.]

Mortgage Loan Representations and Warranties

The seller has made or assigned certain representations and warranties concerning the mortgage loans to the depositor under the mortgage loan purchase agreement. The depositor’s rights to these representations and warranties will be assigned to the issuing entity under the pooling and servicing agreement and pledged by the issuing entity to the certificate trustee under the pooling and servicing agreement for the benefit of certificateholders.

Following the discovery of a breach of any representation or warranty that materially and adversely affects the value of a mortgage loan, or receipt of notice of that breach, the seller [or originator] will be required to (1) cure that breach, (2) repurchase the affected mortgage loan from the issuing entity or (3) in certain circumstances, substitute another mortgage loan.

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In order to substitute a new mortgage loan for a mortgage loan that has been removed from the trust because of a breach of a representation or warranty, (a) substitution must generally take place within [two] years from the closing date and (b) a mortgage loan that is materially similar to the deleted mortgage loan must be available for substitution.

Mortgage Loan Servicing

The mortgage loans will be master serviced by [______].  The master servicer will oversee the servicing of the mortgage loans by the servicer under the servicing agreements, but will not be ultimately responsible for the servicing of the mortgage loans, except as provided in the pooling and servicing agreement and described in this prospectus supplement.

The mortgage loans will be serviced by [_________________] under the applicable servicing agreement.

If the servicer is removed due to default or otherwise, a successor servicer acceptable to the master servicer and the rating agencies will assume responsibility for the servicing of the mortgage loans, as described in this prospectus supplement.

Optional Termination

On any distribution date on which the total principal balance of the mortgage loans has declined to less than or equal to [___]% of the initial principal balance of the mortgage loans as of the cut-off date, subject to satisfaction of the conditions described in the pooling and servicing agreement, the terminating entity identified in the pooling and servicing agreement may purchase all of the mortgage loans from the trust fund, thereby causing an early retirement of the certificates.

Tax Status

The [issuing entity administrator], on behalf of the trustee, will elect to treat all or a portion of the trust fund as one or more “real estate investment conduits” or “REMIC’s” for federal income tax purposes. Each of the offered certificates, the Class A Certificates [and the Class B Certificates], will represent ownership of “regular interests” in a REMIC. The Class R Certificates will be designated as the sole class of “residual interest” in [each][the] REMIC.

Certain of the offered certificates may be issued with original issue discount for federal income tax purposes.

We refer you to “Material Federal Income Tax Consequences” in this prospectus supplement and in the accompanying prospectus for additional information concerning the application of federal income tax laws to the certificates

ERISA Considerations

A fiduciary of any employee benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), should carefully review with its legal advisors whether the purchase or holding of the Certificates could give rise to a transaction prohibited or not otherwise permissible under applicable law.

Legal Investment

The certificates will [not] will constitute “mortgage related securities” under the Secondary Mortgage Market Enhancement Act of 1984 or SMMEA.

There may be other restrictions on the ability of certain types of investors to purchase the certificates that prospective investors should also consider.

Certificate Rating

Each class of offered certificates is expected to receive a credit rating from one or more nationally recognized statistical rating organizations (“NRSROs”).

These ratings are not recommendations to buy, sell or hold these certificates.  A rating may be changed or withdrawn at any time by the assigning rating agency.

The ratings do not address the possibility that, as a result of principal prepayments, the yield on your certificates may be lower than anticipated.

The ratings do not address the payment of any basis risk shortfalls with respect to the offered certificates.

We refer you to “RATINGS” in this prospectus supplement for a more complete discussion of the certificate ratings.

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RISK FACTORS

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the offered certificates. You should also consider the risk factors described in the accompanying prospectus. All statistical information referred to in this section is based on the mortgage pool as constituted on the cut-off date.

The Current Turbulence in the Financial Markets and Economy May Adversely Affect the Performance and Market Value of Your Securities and These Conditions May Not Improve in the Near Future

Market and economic conditions during the past several years have caused significant disruption in the credit markets. Continued concerns about the availability and cost of credit, the U.S. mortgage market, declining real estate markets in the U.S., economic conditions in the U.S. and Europe and the systemic impact of inflation or deflation, energy costs and geopolitical issues have contributed to increased market volatility and diminished expectations for the U.S. economy. Increased market uncertainty and instability in both U.S. and international capital and credit markets, combined with declines in business and consumer confidence and increased unemployment, have contributed to volatility in domestic and international markets.

As a result of these market conditions, the cost and availability of credit has been and may continue to be adversely affected by illiquid credit markets and wider credit spreads. Concern about the stability of the markets and the strength of counterparties has led many lenders and institutional investors to reduce, and in some cases cease, lending to borrowers. Continued turbulence in the U.S. and international markets and economies may negatively affect the U.S. housing market and in the credit performance and market value of residential mortgage loans.

There is particular uncertainty about the prospects for growth in the U.S. economy. A number of factors influence the potential uncertainty, including, but not limited to, high current unemployment, rising government debt levels, prospective Federal Reserve policy shifts, the withdrawal of government interventions into the financial markets, changing U.S. consumer spending patterns, and changing expectations for inflation and deflation. Income growth and unemployment levels affect borrowers’ ability to repay mortgage loans, and there is risk that economic activity could be weaker than anticipated as the country begins to exit the recent serious recession.

In addition, the difficult economic environment and rate of unemployment and other factors (which may or may not affect real property values) may affect the mortgagors’ timely payment of scheduled payments of principal and interest on the mortgage loans and, accordingly, the actual rates of delinquencies, foreclosures and losses with respect to the mortgage loans. Excessive home building or historically high foreclosure rates resulting in an oversupply of housing in a particular area may increase the amount of losses incurred on defaulted mortgage loans.

These factors and general market conditions could adversely affect the performance and market value of your securities. There can be no assurance that governmental or other actions will improve these conditions in the near future.

Downgrade of Long-term Ratings of Eurozone Nations May Adversely Affect the Market Value of the Securities

In response to the economic situation facing the European Economic and Monetary Union, or Eurozone, based on factors including tightening credit conditions, higher risk premiums on Eurozone sovereigns and disagreement among European policy makers as to how best to address the declining market confidence with respect to the Eurozone, on January 13, 2012, Standard & Poor’s, a division of the McGraw-Hill Companies, Inc. (“S&P”), downgraded the long-term credit ratings on nine members of the Eurozone, including Austria, Cyprus, France, Italy, Malta, Portugal, Slovakia, Slovenia and Spain. The outlooks on the ratings on Austria, Belgium, Cyprus, Estonia, France, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Spain are negative. In addition, S&P lowered the long-term issuer credit rating on the European Financial Stability Facility from ‘AAA’ to ‘AA+’. It is not yet clear how these downgrades and outlooks will impact the market price or the marketability of the offered securities, and no assurance can be given that these ratings actions will not have an adverse effect on the value of the securities.

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Recent Trends in the Residential Mortgage Market May Adversely Affect the Performance and Market Value of Your Securities

Since late 2006, delinquencies, defaults and foreclosures on residential mortgage loans have increased, and they may continue to increase in the future. These increases have not been limited to “subprime” mortgage loans, which are made to borrowers with impaired credit, but have also affected “Alt A” mortgage loans, which are made to borrowers often with limited documentation, and “prime” mortgage loans, which are made to borrowers with better credit who frequently provide full documentation. In addition to higher delinquency, default and foreclosure rates, loss severities on all types of residential mortgage loans have increased due to declines in residential real estate values, resulting in reduced home equity. Nationwide home price appreciation rates generally have been negative since late 2007, and this trend may continue for an indefinite period of time. Higher loan-to-value ratios generally result in lower recoveries on foreclosure, and an increase in loss severities above those that would have been realized had property values remained the same or continued to appreciate.

Another factor that may have contributed to, and may in the future result in, higher delinquency rates is the increase in monthly payments on adjustable rate mortgage loans. Borrowers with adjustable rate mortgage loans are exposed to increased monthly payments when the related mortgage interest rate adjusts upward from the initial fixed rate to the rate computed in accordance with the applicable index and margin. Mortgage loans that provide for the payment of interest, but not principal, for a certain period may also result in higher delinquency rates when, following the interest-only period, the monthly payment with respect to each of these mortgage loans is increased in order to amortize the principal balance of the mortgage loan over the remaining term and to pay interest at the applicable mortgage interest rate.

Current market conditions may impair borrowers’ ability to refinance or sell their residential properties, which may also contribute to higher delinquency and default rates. In response to increased delinquencies and losses with respect to mortgage loans, many mortgage loan originators recently have implemented more restrictive underwriting criteria for mortgage loans, which will likely result in reduced availability of refinancing alternatives for borrowers. These risks would be exacerbated to the extent that prevailing mortgage interest rates increase from current levels. Home price depreciation experienced to date, and any further price depreciation, may also leave borrowers with insufficient equity in their homes to enable them to refinance. Borrowers who intend to sell their homes on or before the maturity of their mortgage loans may find that they cannot sell their property for an amount equal to or greater than the unpaid principal balance of their mortgage loans.  While some mortgage loan originators and servicers have created or otherwise are participating in modification programs in order to assist borrowers with refinancing or otherwise meeting their payment obligations, not all borrowers will qualify for or will take advantage of these opportunities.

In response to these circumstances, federal, state and local authorities have enacted and continue to propose new legislation, rules and regulations relating to the origination, servicing and treatment of mortgage loans in default or in bankruptcy. These initiatives could result in delayed or reduced collections from mortgagors, limitations on the foreclosure process and generally increased servicing costs. Certain of these initiatives could also permit the servicer to take actions, such as with respect to the modification of mortgage loans, that might adversely affect the securities, without any remedy or compensation to the holders of the securities.

The conservatorships of Fannie Mae and Freddie Mac in September 2008 have impacted both the real estate market and the value of real estate assets generally. While Fannie Mae and Freddie Mac currently act as the primary sources of liquidity in the residential mortgage markets, both by purchasing mortgage loans for their own portfolios and by guaranteeing mortgage-backed securities, their long-term role is uncertain as the Obama administration has proposed reducing and eventually eliminating their role in the residential mortgage markets. A reduction in the ability of mortgage loan originators to access Fannie Mae and Freddie Mac to sell their mortgage loans may adversely affect the financial condition of mortgage loan originators. In addition, any decline in the value of securities issued by Fannie Mae and Freddie Mac may affect the value of residential mortgage-backed securities in general.

These adverse changes in market and credit conditions have had, and may continue to have, the effect of depressing the market values of residential mortgage-backed securities generally, and substantially reducing the liquidity of residential mortgage-backed securities generally. These developments may adversely affect the performance, marketability and overall market value of your securities.

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Financial Regulatory Legislative Reform and Related Regulations Could Have a Significant Impact

In response to the financial crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which President Obama signed into law on July 21, 2010. The Dodd-Frank Act requires the creation of new federal regulatory agencies, and grants additional authorities and responsibilities to existing regulatory agencies to identify and address emerging systemic risks posed by the activities of financial services firms. The Dodd-Frank Act also provides for enhanced regulation of derivatives and mortgage-backed securities offerings, restrictions on executive compensation and enhanced oversight of credit rating agencies. Additionally, the Dodd-Frank Act establishes the Bureau of Consumer Financial Protection (the “BCFP”) within the Federal Reserve System, a new consumer protection regulator tasked with regulating consumer financial services and products. The Dodd-Frank Act also limits the ability of federal laws to preempt state and local consumer laws.

The impact of the Dodd-Frank Act will depend significantly upon the content and implementation of the rules and regulations issued on its mandate. It is not yet clear how the Dodd-Frank Act and its associated rules and regulations will impact the mortgage-backed securities market and residential mortgage lending generally, and the issuing entity, investors in the securities offered thereby, the sponsor, the depositor, the servicers and their respective businesses and assets specifically. No assurance can be given that the new regulations will not have an adverse impact on these entities or the value of the securities offered thereby.

The BCFP is charged with issuing regulations to implement amendments to the TILA made by the Dodd-Frank Act. These regulations will expand the existing “ability to pay” requirements under TILA, establish new minimum underwriting standards and impose new limits on prepayment penalties.

In March 2011, the SEC issued a release soliciting public comment on proposed rules that, if adopted, would require, among other things, that the sponsor or an affiliate of the sponsor retain at least 5% of the credit risk of a non-exempt securitization, and in general prohibit the transfer or hedging, and restrict the pledge, of the retained credit risk. In April 2010, the SEC proposed rules, some of which were re-proposed in July 2011, that, if adopted, would further revise substantially Regulation AB and other rules regarding the offering process, disclosure and reporting for publicly-issued asset-backed securities. Among other things, the proposed changes would require (i) enhanced disclosure of loan level information at the time of securitization and on an ongoing basis, (ii) that the transaction agreements provide for review of the underlying assets by an independent credit risk manager if certain trigger events occur and (iii) periodic assessments of an asset-backed security issuer’s continued ability to conduct shelf offerings. We cannot predict what effect the proposed rules will have, if adopted, on the marketability of asset-backed securities such as the securities. In addition, if the proposed rules are adopted, your securities, which may not be subject to all of the requirements included in the proposed rules, may be less marketable than those that are offered in compliance with the proposed rules.

In addition, other regulatory agencies, including the FDIC, recently have proposed or adopted financial reform regulations. It is not clear whether or when any proposed regulations will be adopted, what the final form of any such regulations will be, how they will be implemented, or if the depositor, the servicers or any successor servicer will be affected. No assurance can be given that any proposed regulations will not have an adverse impact on the issuing entity, sponsor, depositor, the servicers or any successor servicer or on the value of the securities.

Prospective investors should independently assess and determine whether they are directly or indirectly subject to Article 122a of the Banking Consolidation Directive (Directive 2006/48/EC (as amended)) (“Article 122a”) as implemented by the Member States of the European Union. Any prospective investor that is subject to Article 122a should independently assess and determine their ability to comply with the initial and ongoing obligations imposed by Article 122a and the regulatory capital treatment that is required with respect to the purchase of an offered security and what impact any such regulatory capital treatment may have on the liquidity or market value of the offered securities, in particular in the event that the minimum risk retention requirement or other obligations imposed by Article 122a are found to be not in compliance. Although the sponsor or one or more affiliates will purchase the Class [___] Securities at the closing, the sponsor is under no obligation to satisfy the minimum 5% net economic interest with respect to the offered securities in one of the forms prescribed by Article 122a, there is no obligation on the part of the sponsor to maintain any level of risk retention in a manner that would comply with Article 122a, and none of the sponsor or affiliates of the sponsor make any representation or assurance to retain any such level of risk retention after the closing date. Investors who are subject to Article 122a should consider carefully investing in the offered securities as a failure to comply with one or more of the requirements set out in Article 122a will result in the imposition of a penal capital charge in respect of the offered securities acquired by the relevant investor.

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Potential Changes in Ratings Present Risks

Since mid-2007, the mortgage market has encountered difficulties which continue and which may adversely affect the performance or market value of your securities. Residential mortgage-backed securities backed by mortgage loans originated in relatively recent years, particularly since 2005, have generally been the focus of attention due to a higher and earlier than expected rate of delinquencies, defaults and foreclosures. Many residential mortgage-backed securities, in particular those that were issued between 2005 and 2007, have been subject to rating agency downgrades. These downgrades have included downgrades of “AAA”-rated securities. There may be further downgrades of residential mortgage-backed securities in the future. In addition, the rating agency rating the securities may change its ratings criteria after issuance and any changes in ratings criteria may adversely affect the ratings assigned to the securities. There can be no assurance that the assigning rating agency will not downgrade the securities or that any other rating agency will not assign ratings to the securities that are lower than those assigned by the rating agency requested to assign ratings to the securities.

None of the sponsor, the depositor, the trustee, the master servicer, the securities administrator, the underwriters or any other person will have any obligation to cause any rating of any of the offered securities to be maintained. Changes affecting the mortgage loans, the parties to the pooling and servicing agreement or other persons may have an adverse effect on the ratings of the offered securities, and thus their market value. Any such adverse changes do not by themselves constitute a default under the servicing agreements or the pooling and servicing agreement.

Pre-offering Review of the Mortgage Loans Underlying the Securities May Not Reveal Aspects of the Mortgage Loans Which Could Lead to Losses

The sponsor has undertaken certain limited loan review procedures with respect to various aspects of certain mortgage loans underlying the securities, including a review of the underwriting of certain of the mortgage loans conducted by each originator and verification of certain aspects of the mortgage loans. In conducting these review procedures, the sponsor relied on information and resources available to it (which were limited and which, in most cases, were not independently verified) and on one or more third party agents. These review procedures were intended to discover certain material discrepancies and possible material defects in the mortgage loans reviewed. However, these procedures did not constitute a re-underwriting of the loans, and were not designed or intended to discover every possible discrepancy or defect. In addition, the sponsor engaged a third party to conduct procedures designed to verify the sponsor’s data regarding characteristics of the mortgage loans, which data were used to generate the numerical information about the mortgage pools included in this prospectus supplement. In addition, the review included the recalculation by a third party of numerical disclosures regarding the mortgage loans selected by the sponsor and appearing in this prospectus supplement. There can be no assurance that any review process conducted uncovered relevant facts that could be determinative of how the reviewed mortgage loans will perform. Investors should note that the sponsor undertook this limited loan file review with respect to a portion of the mortgage loans and did not undertake any loan file review for the remaining mortgage loans.

Furthermore, to the extent that the limited review conducted by the sponsor did reveal factors that could affect how the mortgage loans will perform, the sponsor may have incorrectly assessed the potential severity of those factors. For example, in cases where a third party reviewed an original appraisal and determined that it did not support the original appraised value, the third party reviewed a Limited Desktop Appraisal Analysis or similar appraisal product, such as a field review, to determine whether the original appraisal was correct. The review of the analyses by the sponsor and the seller may, erroneously, not have indicated a defect in the original appraisal, which could result in an increased risk that payments on these mortgage loans may not be received or recovered. Investors are encouraged to make their own determination as the extent to which they place reliance on the limited loan review procedures of the sponsor.

[Risks Related to Mortgage Loans with Interest-Only Payments

Approximately [___] of the mortgage loans to be included in the trust provide for payment of interest at the related mortgage interest rate, but no payment of principal, for a period of [___] years following the origination of the mortgage loan.  Following the interest-only period, the monthly payment with respect to each of these mortgage loans will be increased to an amount sufficient to amortize the principal balance of the mortgage loan over the remaining term and to pay interest at the applicable mortgage interest rate.

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The interest-only mortgage loans may present special default and prepayment risks, particularly for certificates purchased at a discount.

We refer you to “Yield, Prepayment and Weighted Average Life— General” in this prospectus supplement and “Risk Factors — Risks Related to Mortgage Loans with Interest-Only Payments” and “— Changes in U.S. Economic Conditions May Adversely Affect the Performance of Mortgage Loans, Particularly Adjustable Rate Loans of Various Types” in the accompanying prospectus.]

[Special Default Risk of Second Lien Mortgage Loans

Approximately [___]% of the mortgage loans are secured by second liens on the related mortgaged properties. These second lien mortgage loans are subordinate to the rights of the mortgagee under the related first mortgages and may present special risks upon default of any second lien mortgage loans.

We refer you to “Risk Factors — Special Default Risk of Second Lien Mortgage Loans” and “— Risks Related to Simultaneous Second Liens and Other Borrower Debt” in the accompanying prospectus.]

[Risks Related to Simultaneous Second Liens and Other Borrower Debt

Approximately [____]% of the mortgage loans in the trust are first lien mortgage loans with respect to which, at the time of origination, the originator or other lender also originated second lien mortgage loans that may not be included in the trust. The weighted average indicative combined loan-to-value ratio, which is the ratio of the total outstanding principal balance of a first lien mortgage loan and the related simultaneous second lien mortgage loan to the value of the related mortgaged property, of these mortgage loans is [___]%. In addition, other borrowers whose first lien loans are included in the trust may have obtained secondary mortgage financing following origination of the first lien loans.  In addition, borrowers may increase their aggregate indebtedness substantially by assuming consumer debt of various types.  Consequently, investors should consider that borrowers who have less equity in their homes, or who have substantial mortgage and consumer indebtedness, may be more likely to default and may be more likely to submit to foreclosure proceedings.

We refer you to “Risk Factors — Risks Related to Simultaneous Second Liens and Other Borrower Debt” in the accompanying prospectus.]

Geographic Concentration of Mortgage Loans

Approximately [____]% of the mortgage loans to be included in the trust are secured by properties located in [____] and approximately [____]% of the mortgage loans to be included in the trust are secured by properties located in [_______]. The rate of delinquencies, defaults and losses on the mortgage loans may be higher than if fewer of the mortgage loans were concentrated in those states because adverse economic conditions and natural disasters will have a disproportionate impact on the mortgage loans in general.

We refer you to “Yield, Prepayment and Weighted Average Life” in this prospectus supplement and “Risk Factors — Geographic Concentration of the Mortgage Loans” in the accompanying prospectus.  For additional information regarding the geographic concentration of the mortgage loans to be included in the mortgage pool, see the applicable table(s) in Annex A of this prospectus supplement.

Mortgage Loan Interest Rates May Limit Interest Rates on the Certificates

The certificates will accrue interest at [describe interest rate], but those interest rates are subject to certain limitations, generally based on the weighted average interest rates of the mortgage loans in the trust or as otherwise described below, net of certain allocable fees and expenses of the issuing entity and any payments owed on derivative instruments.  The mortgage loans to be included in the trust will have interest rates that either are fixed or adjust based on a variable index, as described in this prospectus supplement.

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Any adjustable rate mortgage loans in the trust may also have periodic maximum and minimum limitations on adjustments to their interest rates, and may have the first adjustment to their interest rates a number of years after their first distribution dates.  In addition, adjustable rate mortgage loans generally have lifetime maximum interest rates.  As a result, your variable rate certificates may accrue less interest than they would accrue if their interest rates were solely based on the specified index plus the specified margin.

A variety of factors could limit the interest rates and adversely affect the yields to maturity on the variable rate securities.  Some of these factors are described below.

The interest rates for your certificates adjust [monthly] based on the [___ index], while the interest rates on the mortgage loans to be included in the trust adjust [monthly][semi-annually] [based on a different index or not adjust at all].  Consequently, the limits on the interest rates on these certificates may prevent increases in the interest rates for extended periods in a rising interest rate environment.

The interest rates on adjustable rate mortgage loans may respond to economic and market factors that differ from those that affect the [____ index] applicable to your variable rate certificates.  It is possible that the interest rates on any adjustable rate mortgage loans may decline while the interest rates on the certificates are stable or rising.  It is also possible that the interest rates on any adjustable rate mortgage loans and the interest rates on the certificates may both decline or increase during the same period, but that the interest rates on your certificates may decline or may increase more slowly or rapidly.

To the extent that fixed rate or adjustable rate mortgage loans are subject to default or prepayment, the interest rates on the certificates may be reduced as a result of the net funds cap limitations described in this prospectus supplement.

We refer you to “Description of the Certificates — Payments of Interest” and “— Credit Enhancement — Overcollateralization” in this prospectus supplement. For a general description of the interest rates of the related mortgage loans, we refer you to “Description of the Mortgage Pool” in this prospectus supplement..

Potential Inadequacy of Credit Enhancement

[The certificates are not insured by any surety certificate.] The credit enhancement features of subordination and loss allocation, excess interest, overcollateralization and limited cross-collateralization, [together with any primary mortgage insurance and financial guaranty insurance policies], are intended to enhance the likelihood that holders of more senior classes of certificates will receive regular payments of interest and principal, but are limited in nature and may be insufficient to cover all losses on the related mortgage loans.

Subordination and Allocation of Losses.  If the applicable subordination is insufficient to absorb losses, then holders of subordinate certificates[, particularly the Class [_____ Certificates,] will likely incur losses and may never receive all of their principal payments.  You should consider that:

· if you buy a Class [____] Certificate and losses on the related mortgage loans exceed the total principal amount of the class of certificates subordinate to your certificates (if any), plus, if applicable to the trust and as specified in this prospectus supplement, any excess interest and any overcollateralization that has been created, the principal amount of your certificates will be reduced proportionately with the principal amounts of the other certificates of your class by the amount of that excess; and

· after the total principal amount of the subordinate certificates has been reduced to zero, losses on the mortgage loans may reduce the principal amounts (or notional amounts) of the senior certificates.

Losses on the related mortgage loans will reduce the loss protection provided by the subordinate certificates to the senior certificates and will increase the likelihood that the senior certificates will not receive all of their expected principal payments.

If overcollateralization is maintained at the required amount and the related mortgage loans generate interest in excess of the amount needed to pay interest and principal on your certificates, the fees and expenses of the issuing entity and any payments owed to a derivatives counterparty, then excess interest may be used to pay you and the other certificateholders the amount of any reduction in the aggregate principal balance of the mortgage loans caused by application of losses.  These payments will generally be made in order of seniority.  We cannot assure you, however, that any excess interest will be generated and, in any event, unless otherwise specified in this prospectus supplement, no interest will be paid to you on the amount by which the principal amount of your certificates was reduced because of the application of losses. 

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Overcollateralization.  In order to create and maintain overcollateralization, it will be necessary that the mortgage loans generate more interest than is needed to pay interest on the certificates, as well as any fees and expenses of the issuing entity and any payments owed to a derivative counterparty.  If the certificates have the benefit of excess interest and/or overcollateralization, we expect that the mortgage loans will generate more interest than is needed to pay those amounts, at least during certain periods, because the weighted average of the interest rates on the mortgage loans is expected to be higher than the weighted average of the interest rates on the certificates plus the weighted average aggregate expense rate.  Any remaining interest generated by the mortgage loans will be used to absorb losses on the mortgage loans and to maintain overcollateralization.  In addition, on the closing date, the total scheduled principal balance of the mortgage loans may exceed the total principal amount of the certificates.  This excess is referred to as “overcollateralization” and will be available to absorb losses.  We cannot assure you, however, that the mortgage loans will generate enough excess interest to maintain this overcollateralization level as set by the applicable rating agencies.  In addition, there may be no amounts available from any interest rate derivative agreement described in this prospectus supplement to cover shortfalls.  The following factors will affect the amount of excess interest that the related mortgage loans will generate:

Every time a mortgage loan is prepaid in whole or in part, total excess interest after the date of prepayment will be reduced because that mortgage loan will no longer be outstanding and generating interest or, in the case of a partial prepayment, will be generating less interest.  The effect of this reduction on your certificates will be influenced by the amount of prepaid loans and the characteristics of the prepaid loans.  Prepayment of a disproportionately high number of high interest rate mortgage loans would have a greater negative effect on future excess interest.

If the rates of delinquencies, defaults or losses on the mortgage loans turn out to be higher than expected, excess interest available for overcollateralization or to absorb losses will be reduced.  Every time a mortgage loan is liquidated or charged off, excess interest will be reduced because that mortgage loan will no longer be outstanding and generating interest.

[Limited Cross-Support. The trust contains [two or more] separate mortgage pools, as specified in this prospectus supplement.  Principal payments on the senior certificates will depend, for the most part, on collections on the mortgage loans in the related pool.  However, as specified in this prospectus supplement, the senior certificates have the benefit of credit enhancement in the form of subordination from one or more of the other pools.  That means that even if the rate of losses on mortgage loans in the pool related to your class of senior certificates is low, losses in an unrelated pool may reduce the loss protection for your certificates.]

[Interest Rate Derivative Agreements. Any amounts received under any interest rate cap or swap agreement will generally be applied as described in this prospectus supplement to pay interest shortfalls and, if applicable, to maintain overcollateralization and cover losses.  However, we cannot assure you that any amounts will be received under that interest rate derivative agreement, or that any such amounts that are received will be sufficient to maintain any required overcollateralization or to cover interest shortfalls and losses on the mortgage loans.]

[Primary Mortgage Insurance. Approximately [___]% of the mortgage loans are first lien mortgage loans which have original loan-to-value ratios greater than 80%. Approximately [___]% and [___]% of those mortgage loans are covered by existing borrower- or lender- paid primary mortgage insurance policies.  The existing borrower- or lender- paid primary mortgage insurance policies will generally have the effect of reducing the original loan-to-value ratios of those covered mortgage loans to the [___]% to [___]%.]  

[In addition, one or more loan-level primary mortgage insurance policies may be acquired on behalf of the trust from primary mortgage insurance providers, providing the initial insurance coverage specified in this prospectus supplement for those first lien mortgage loans with original loan-to-value ratios greater than 80%. ] 

These loan-level primary mortgage insurance policies will generally have the effect of reducing the original loan-to-value ratios of those covered mortgage loans to the percentage specified in this prospectus supplement.  

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However, these policies will only cover first lien mortgage loans and will be subject to various other limitations and exclusions.  In addition, borrower-paid primary mortgage insurance may be subject to cancellation by the related borrower.  As a result, coverage may be rescinded or denied on some mortgage loans.  Primary mortgage insurance providers will generally curtail the insured payments on a foreclosed mortgage loan if the related servicer does not foreclose that mortgage loan within a limited time period determined by the insurance provider.  In addition, because the amount of coverage under these policies depends on the loan-to-value ratio of the related mortgaged property at the inception of these policies, a decline in the value of the related mortgaged property will not result in increased coverage, and the trust may still suffer a loss on a covered mortgage loan.  Accordingly, these primary mortgage insurance policies will provide only limited protection against losses on the mortgage loans.]

[Risks Related to Amounts in the Pre-Funding Account being Applied to Pay Principal on the Certificates]

[If the aggregate principal balance of the additional mortgage loans to be acquired by the trust fund by the end of the pre-funding period is less than the initial pre-funding amount allocable to the mortgage pool, the amount of such differential will be paid to the related certificateholders on the [___] distribution date in the same manner and priority as the mortgage loan collections of principal. Any such payment will reduce the weighted average life of the certificates and may adversely affect the yield of the certificates. Certificateholders would bear the risk of being unable to invest such early payment at a yield that is at least equal to the yield on the certificates. The depositor believes that substantially all of the funds in the pre-funding account will be used for the purchase of additional mortgage loans prior to the end of the pre-funding period.]

Unpredictability and Effect of Prepayments

The rate of prepayments on the mortgage loans will be sensitive to prevailing interest rates.  Generally, if prevailing interest rates decline, mortgage loan prepayments may increase due to the availability of refinancing at lower interest rates.  If prevailing interest rates rise, prepayments on the mortgage loans may decrease.

Borrowers may prepay their mortgage loans in whole or in part at any time; however, some or all of the mortgage loans to be included in the trust may require the payment of a prepayment premium in connection with any voluntary prepayments in full, and certain voluntary prepayments in part, made during periods ranging from the periods specified in this prospectus supplement.  These prepayment premiums may discourage borrowers from prepaying their mortgage loans during the applicable period. [or Borrowers may prepay their mortgage loans in whole or in part at any time without penalty.]

Prepayments on the mortgage loans may occur as a result of solicitations of the borrowers by mortgage loan originators, including the seller and its affiliates, the servicer or servicers, as applicable, and any master servicer.  In addition, the availability of newer mortgage products with more flexible payment terms or that require lower monthly payments, such as “option ARMs,” may result in an increase in the number of borrowers who prepay their mortgage loans to take advantage of new products.

The timing of prepayments of principal may also be affected by liquidations of or insurance payments on the mortgage loans.  In addition, the sponsor, as the seller of the mortgage loans to the depositor, or such other seller as specified in this prospectus supplement, may be required to purchase mortgage loans from the trust in the event that certain breaches of representations and warranties made with respect to the mortgage loans are not cured. These purchases will have the same effect on certificateholders as prepayments of mortgage loans.

A prepayment of a mortgage loan will usually result in a payment of principal on the certificates:

· If you purchase certificates at a discount, especially any principal-only certificates, and principal prepayments on the related mortgage loans are received at a rate slower than you anticipate, then your yield may be lower than you anticipate.

· If you purchase certificates at a premium, especially any interest-only certificates, and principal prepayments on the related mortgage loans are received at a rate faster than you anticipate, then your yield may be lower than you anticipate.

The prepayment experience of the mortgage loans to be included in the trust may differ significantly from that of other first and second lien residential mortgage loans.

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We refer you to “Yield, Prepayment and Weighted Average Life” in this prospectus supplement and “Yield and Prepayment Considerations” in the accompanying prospectus for a description of factors that may influence the rate and timing of prepayments on the mortgage loans.

Delay in Receipt of Liquidation Proceeds; Liquidation Proceeds May Be Less Than Mortgage Balance

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

Risks Associated With New Laws Relating to Mortgage Loan Servicing

Numerous laws, regulations and rules related to the servicing of mortgage loans, including efforts to delay or suspend foreclosure actions for a specified period, have been proposed recently by federal, state and local governmental authorities. A number of these laws have been enacted, including in California. These laws, regulations and rules will result in delays in the foreclosure process, and may lead to reduced payments by borrowers or increased reimbursable servicing expenses. You bear the risk that these regulatory developments will adversely impact your securities, whether due to delayed or reduced distributions or reduced market value.

Violation of Various Federal, State and Local 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 lenders.  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 mortgage loans.

Mortgage loans are also subject to various federal laws, including:

· the federal Truth-in-Lending Act and Regulation Z promulgated thereunder, which require certain disclosures to borrowers regarding the terms of their 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 borrower’s credit experience.

Violations of certain provisions of these federal laws may limit the ability of the servicers to collect all or part of the principal of or interest on the related mortgage loans and in addition could subject the trust to damages and administrative enforcement.

The seller of the mortgage loans made or assigned the representation the mortgage loan sale agreement described in this prospectus supplement that each mortgage loan was originated in compliance with applicable federal, state and local laws and regulations.  In the event of a breach of this representation, the seller [or originator] will be obligated to cure the breach or repurchase or replace the affected mortgage loan in the manner described in this prospectus supplement and under “The Agreements— _______] “ in this prospectus supplement.

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Mortgage Loan Modification Programs and Future Legislative Action May Adversely Affect the Performance and Market Value of Your Securities 

To limit losses on delinquent mortgage loans, in accordance with the servicing agreements, the servicers may use loss mitigation techniques, including forbearance agreements and other modification agreements and pre-foreclosure sales. Modifications of mortgage loans in an attempt to maximize the ultimate proceeds of such mortgage loans may have the effect of, among other things, reducing or otherwise changing the mortgage interest rate, forgiving payments of principal, interest or prepayment charges, extending the final maturity date, capitalizing or deferring delinquent interest and other amounts owed under the mortgage loans, deferring principal payments, with or without interest, or any combination of these or other modifications. Since all of the classes of offered securities receive interest based on the weighted average net mortgage interest rate of the mortgage loans in the related mortgage pool or are subject to a limitation on interest equal to that rate, modifications to mortgage interest rates of the related mortgage loans will reduce interest payable on the related offered securities. In addition, while the U.S. Congress has failed to pass legislation to enhance the power of bankruptcy courts to reduce the principal amount of, or the interest rate on, a mortgage loan of an individual who is a debtor in bankruptcy secured by a primary residence, it is possible that such legislation could be enacted in the future.

A modification may result in reduced interest collections available for distribution to the related securities, reduced distributions of principal or the allocation of a realized loss to the most subordinate class of securities outstanding. Modifications that are designed to maximize collections to the issuing entity in the aggregate may adversely affect a particular class of securities. The servicers are required to consider the interests of all classes of securities as a whole when making servicing decisions. If a servicer reduces the interest rate, extends the payment period or accepts a lesser amount than stated in the mortgage note in satisfaction of the mortgage note, or charges off or sells the mortgage loan, amounts available to make payments on the related securities will be reduced. The actual final distribution date for any class might be later, and could be significantly later, than the final scheduled distribution date if the related servicer extends the maturity date of a mortgage loan beyond the final scheduled distribution date for the securities.

During the third quarter of 2008 and the first quarter of 2009, the federal government, through the Federal Housing Administration and the Federal Deposit Insurance Corporation, commenced implementation of programs designed to provide homeowners with assistance in avoiding residential mortgage loan foreclosures. In addition, certain mortgage lenders and servicers have voluntarily, or as part of settlements with law enforcement authorities, established loan modification programs relating to the mortgages they hold or service. In January 2009, the President announced his “Homeowner Affordability and Stability Plan,” which is focused on reducing foreclosures. These programs may involve, among other things, the modification of mortgage loans to reduce the principal amount of the loans or the rate of interest payable on the loans, or to extend the payment terms of the loans. In addition, members of the U.S. Congress have indicated support for additional legislative relief for homeowners, including a proposed amendment of the bankruptcy laws to permit the modification of mortgage loans in bankruptcy proceedings. These loan modification programs, as well as future law enforcement and legislative or regulatory actions, including amendments to the bankruptcy laws that result in the modification of outstanding mortgage loans, may adversely affect the performance and market value of your securities.

Special Assessments and Energy Efficiency Liens May Take Priority Over the Mortgage Lien

Mortgaged properties securing the mortgage loans may be subject to the lien of special property taxes and/or special assessments. These liens are superior to the liens securing the mortgage loans, irrespective of the date of the mortgage. In some instances, individual borrowers may be able to elect to enter into contracts with governmental agencies for Property Assessed Clean Energy (PACE) or similar assessments that are intended to secure the payment of energy and water efficiency and distributed energy generation improvements that are permanently affixed to their properties, possibly without notice to or the consent of the mortgagee. These assessments also have lien priority over the mortgages securing mortgage loans. No assurance can be given that any mortgaged property so assessed will increase in value to the extent of the assessment lien. Additional indebtedness secured by the assessment lien would reduce the amount of the value of the mortgaged property available to satisfy the affected mortgage loan.

Helping Families Save Their Homes Act

The Helping Families Save Their Homes Act of 2009, Public Law 111-22, 123 Stat. 1632, effective as of May 20, 2009, amends the Truth in Lending Act to require purchasers or assignees of mortgage loans secured by a borrower’s principal dwelling to mail or deliver notice to borrowers of the sale or transfer of their mortgage loan no later than 30 days after a sale or transfer. The sale of the mortgage loans from the depositor to the issuing entity will require that these notices be mailed or delivered reflecting the ownership of the mortgage loans by the issuing entity. Failure to comply with these notice requirements may result in civil claims for compensatory and punitive damages against the issuing entity. Any judgment against, or settlement by, the issuing entity relating to these violations would reduce the funds otherwise available for distribution to investors, and may result in shortfalls or losses on your securities. The servicing agreements will require the servicers to deliver the required notices to borrowers.

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Risks Associated With Potential New Laws Relating to Mortgage Loan Origination or Ownership

The U.S. Congress and various state and local legislatures are considering or have adopted legislation, which, among other things, would permit limited assignee liability for certain violations in the mortgage loan origination process. We cannot predict whether or in what form the U.S. Congress or various state and local legislatures may enact such legislation or how such legislation might impact your securities. We are also unable to predict how changes by federal, state or local authorities to regulations currently in effect relating to assignee liability may affect your securities.

Predatory Lending Laws/High Cost Loans

Various federal, state and local laws have been enacted that are designed to discourage predatory lending practices.  The federal Home Ownership and Equity Protection Act of 1994, commonly known as HOEPA, prohibits inclusion of certain provisions in mortgage loans that have mortgage rates or origination costs in excess of prescribed levels, and requires that borrowers be given certain disclosures prior to the origination of mortgage loans.  Some states have enacted, or may enact, similar laws or regulations, which in some cases impose restrictions and requirements greater than those in HOEPA.

In addition, under the anti-predatory lending laws of some states, the origination of certain mortgage loans (including loans that are not classified as “high cost” loans under applicable law) must satisfy a net tangible benefits test with respect to the related borrower.  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 related originator reasonably believed that the test was satisfied.

Failure to comply with these laws, to the extent applicable to any of the mortgage loans, could subject the trust, as an assignee of the related mortgage loans, to monetary penalties and could result in the borrowers rescinding the affected 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 have included numerous participants within the secondary mortgage market, including some securitization trusts. The cost of defending such cases, including legal fees incurred by the securitization trust, are typically paid out of collections on trust assets and hence reduce the amounts otherwise distributable to trust securityholders.

The seller will represent that the trust does not include any mortgage loans that are subject to HOEPA or that would be classified as “high cost” loans under any similar state or local predatory or abusive lending law.  There may be mortgage loans in the trust that are subject to the state or local requirement that the loan provide a net tangible benefit (however denominated) to the borrower; the seller will represent that these mortgage loans are in compliance with applicable requirements.  If it is determined that the trust includes loans subject to HOEPA or otherwise classified as high cost loans, or which do not comply with applicable net tangible benefit requirements, the seller will be required to repurchase the affected loans and to pay any liabilities incurred by the trust due to any violations of these laws.  If the loans are found to have been originated in violation of predatory or abusive lending laws and the seller does not repurchase the affected loans and pay any related liabilities, certificateholders could incur losses.

Bankruptcy or Insolvency Proceedings Could Delay or Reduce Payments on the Certificates

Each transfer of a mortgage loan to the sponsor [or other seller as described herein], from the seller to the depositor and, in connection with the issuance of any asset-backed securities, from the depositor to the trust, will be intended to be an absolute and unconditional sale of that mortgage loan and will be reflected as such in the applicable documents.  However, in the event of the bankruptcy or insolvency of a prior owner of a mortgage loan, a trustee in bankruptcy or a receiver or creditor of the insolvent party could attempt to recharacterize the sale of that mortgage loan by the insolvent party as a borrowing secured by a pledge of the mortgage loan.  Such an attempt, even if unsuccessful, could result in delays in payments on the certificates.  If such an attempt were successful, it is possible that the affected mortgage loans could be sold in order to liquidate the assets of the insolvent entity.  In the case of the bankruptcy or insolvency of the applicable seller, there can be no assurance that the proceeds of such a liquidation would be sufficient to repay the certificates in full.

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One or more of the transferors may be banks that are subject to regulation by the FDIC. The FDIC recently has indicated that it may treat as property of a bank in receivership or conservatorship (i) any property that is shown as an asset on the financial statements of a bank, or (ii) any property that the bank previously transferred if the bank retains a continuing economic interest in the transferred assets. The FDIC has indicated that it may assert these positions notwithstanding that the assets have been sold as a matter of law. The depositor will take certain steps to try to prevent any of the mortgage loans from being shown as assets on the financial statements of any transferor that is a bank and to try in certain cases to prevent a transferor that is a bank from purchasing securities. The depositor, however, can provide no assurances that its efforts will be successful, nor can it provide any assurance that a court will not accept the FDIC’s position. As a result, should a transferor that is a bank become the subject of a receivership or conservatorship, should the mortgage loans be shown as assets on its financial statements or should it own any securities, and should the FDIC’s position prevail, then the issuing entity may not own all the mortgage loans and there may be delays in payment or losses on the securities. There may also be delays in payments while these issues are being resolved by the FDIC or a court.

DESCRIPTION OF THE MORTGAGE POOL

Wherever reference is made herein to a percentage of some or all of the Mortgage Loans, that percentage (unless otherwise specified) is determined on the basis of the total scheduled principal balance of such Mortgage Loans as of the cut-off date.  [As indicated at “Description of the Certificates — General,” subsequent to the Closing Date, but no later than [_________], the Trust may from time to time acquire subsequent mortgage loans from the Depositor.  The procedures and selection criteria for acquiring subsequent mortgage loans are set forth at “— Conveyance of Subsequent Mortgage Loans” below. The discussion that follows in this Prospectus Supplement will apply to subsequent mortgage loans only where specific reference is made to “Subsequent Mortgage Loans” or “Mortgage Loans.”]

General

On the Closing Date, the Trust is expected to include approximately [________] [describe Mortgage Loans] Mortgage Loans, [______] of which have original terms to maturity from the first due date of the monthly payment of not more than [_______] years, and which have a total scheduled principal balance (after giving effect to monthly payments due on the cut-off date) of approximately $[_______].  Approximately [_______]% of the Mortgage Loans are first lien mortgage loans and approximately [_______]% of the Mortgage Loans are second lien mortgage loans.  Approximately [______]% of the Mortgage Loans have original terms to maturity from the due date of the first monthly payment of 20 years, approximately [_______]% of the Mortgage Loans have original terms to maturity from the due date of the first monthly payment of 25 years, and approximately [_____]% of the Mortgage Loans have original terms to maturity from the due date of the first monthly payment of 30 years.  

The underwriting guidelines generally applied by the Originator in originating the Mortgage Loans are described under “Underwriting Standards” below.  The Mortgage Loans will be acquired by the Depositor from the Seller and the Depositor will, in turn, convey the Mortgage Loans to the Trust.  We refer you to “The Mortgage Loan Purchase Agreement and the Pooling and Servicing Agreement—Sale of the of Mortgage Loans.”

The Mortgage Loans are [_______] rate Mortgage Loans.  Interest on the Mortgage Loans accrues on the basis of [______].

Pursuant to its terms, each Mortgage Loan[, other than a loan secured by a condominium unit,] is required to be covered by a standard hazard insurance policy in an amount generally equal to the lower of the unpaid principal amount thereof or the replacement value of the improvements on the related Mortgaged Loan.  Generally, a condominium association is responsible for maintaining hazard insurance covering the entire building.

[[______] of the Mortgage Loans provide for monthly payments of interest, but not principal, for a period of up to ten years following origination, after which the monthly payments will be increased to amounts sufficient to pay interest and to amortize the principal balances over the remaining terms.  Approximately [______]% of the Mortgage Loans provide for monthly payments of interest, but not principal, for periods shorter than ten years.  If the monthly payment at the end of the interest only period is substantially higher than the interest only payment, that loan may be subject to an increased risk of default.]  [To be provided as applicable.]

[Approximately [______]% of the Mortgage Loans are partially insured by the FHA (the “FHA Mortgage Loans”) or are partially guaranteed by the VA (the “VA Mortgage Loans”).  The benefits of the FHA insurance and VA guaranty as to each of these Mortgage Loans are limited as described herein.  [Some] [None] of the FHA Mortgage Loans and the VA Mortgage Loans will be serviced on a full recourse basis.]

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[As of the cut-off date, approximately [_____]% of the first lien mortgage loans have original Loan-to-Value Ratios in excess of 80%.   Approximately [_____]% of these Mortgage Loans are not covered by existing borrower- or lender-paid loan-level primary mortgage insurance policies.  In addition,  approximately [____]% of the second lien mortgage loans have original combined loan-to-value ratios in excess of 80% and approximately [______]% of the first lien mortgage loans have original Indicative combined loan-to-value ratios in excess of 80%.]  [To be provided as applicable.]

[Approximately [_____]%,[_____]%,[_____]% and [_____]% of the mortgage loans are secured by mortgaged properties located in the states of [_____], respectively.]

[Disclose if any state or geographic region has a 10% or greater concentration.]

The Seller will represent and warrant that no Mortgage Loan is a “high cost” or “covered” loan under federal, state or local predatory lending laws.

[The Fixed Rate Mortgage Loans

The “Fixed Rate Mortgage Loans” consist of approximately [_____] fixed rate Mortgage Loans, with an aggregate principal balance as of the cut-off date of approximately $ [_____].  The Fixed Rate Mortgage Loans had individual principal balances at origination of at least $[_____] but not more than $[_____], with an average principal balance at origination of approximately $[_____].  Approximately[_____]% of the Fixed Rate Mortgage Loans have terms to maturity from the date of origination of not more than thirty years.  The Fixed Rate Mortgage Loans have a weighted average remaining term to calculated maturity of approximately [_____] months as of the cut-off date.  Approximately [_____]% of the Fixed Rate Mortgage Loans are balloon Mortgage Loans.  Approximately [_____]% of the Fixed Rate Mortgage Loans have been modified.]  

[To be provided as applicable.]

[Adjustable Mortgage Rates

As of the cut-off date, [________ ]% of the Mortgage Loans will provide for semi-annual adjustment of the related Mortgage Rate based on the six-month LIBOR index and [______]% of the Mortgage Loans will provide for monthly adjustment of the related Mortgage Rate based on the one-month LIBOR index, each as described under “—The Indices” below.  With respect to each Mortgage Loan, there will be corresponding adjustments to the monthly payment amount, in each case on each Adjustment Date applicable thereto; provided that the first such adjustment for all of the Mortgage Loans will occur, in the case of approximately [_______]% of the Mortgage Loans, after an initial period of approximately six months following origination, in the case of approximately [_______]% of the Mortgage Loans, after an initial period of approximately three years following origination, in the case of approximately [_____]% of the Mortgage Loans, after an initial period of approximately five years following origination and, in the case of approximately _______ [_____]% of the Mortgage Loans, after an initial period of approximately seven years following origination On each Adjustment Date for a Mortgage Loan, the Mortgage Rate will be adjusted to equal the sum, rounded generally to the next highest or nearest multiple of 1/8%, of the related Index and the related Gross Margin, provided that the Mortgage Rate on each such Mortgage Loan will not increase or decrease by more than the related Periodic Cap (ranging from [____]% to [____]%) as specified in the related mortgage note on any related Adjustment Date and will not exceed the related Maximum Rate over the life of such Mortgage Loan or be less than the Minimum Rate.  Effective with the first monthly payment due on each Mortgage Loan after each related Adjustment Date after the interest-only period, if any, has concluded, 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 Caps and Maximum Rates, the Mortgage Rate on each such Mortgage Loan, as adjusted on any related Adjustment Date, may be less than the sum of the related Index and the related Gross Margin, rounded as described herein.  We refer you to “—The Indices” below.

The Mortgage Loans do not permit the related borrower to convert the adjustable Mortgage Rate to a fixed Mortgage Rate.]

[To be provided as applicable.]  [May vary in accordance with structure of transaction.]

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[The Indices

As indicated above, the index applicable to the determination of the Mortgage Rates for the Mortgage Loans will be either the one-month LIBOR index or the six-month LIBOR index as most recently available as of the first business day of the month preceding the month of such Adjustment Date.  In the event that the one-month LIBOR index or the six-month LIBOR index becomes unavailable or otherwise unpublished, the Servicer will select a comparable alternative index over which it has no direct control and which is readily verifiable.  For One-Month LIBOR Loans, the one-month LIBOR index is determined as of the date that occurs twenty-five (25) days before each Adjustment Date.  For the Six-Month LIBOR Loans (including all hybrid loans), the six-month LIBOR index is determined as of the first Business Day of the month immediately preceding the month in which the Adjustment Date occurs.] [Discussion of any other index described in the prospectus and applicable to the Mortgage Loans to be provided, if applicable.  We refer you to “The Trusts and the Trust Assets — The Mortgage Loans — General” in the prospectus.]

[To be provided as applicable.]

[Primary Mortgage Insurance

Approximately [____]% of the Mortgage Loans are 80+ loan-to-value loans.  We refer you to “Description of the Mortgage Pool[s] — General.” Approximately[___]% and [_____]% of the 80+ loan-to-value loans are covered by existing borrower-paid loan-level primary mortgage insurance policies and lender-paid loan-level primary mortgage insurance policies, respectively.  Approximately [____]% of the 80+ loan-to-value loans are not covered by existing borrower- or lender-paid loan-level primary mortgage insurance policies.

These primary mortgage insurance policies provide limited protection against losses on defaulted 80+ loan-to-value loans and such protection is subject to various limitations and exclusions including, for example, losses resulting from fraud.  As a result, coverage may be denied or limited on some 80+ loan-to-value loans.  In addition, because 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 Mortgage Loan covered by a primary mortgage insurance policy  The providers of the primary mortgage insurance policies may also affect the timing and conduct of foreclosure proceedings and other servicing decisions regarding defaulted Mortgage Loans covered by the related primary mortgage insurance policy.  The Servicer is responsible for paying the premiums under the LPMI Policies.  We refer you to “Insurance — Primary Mortgage Insurance Policies” in the prospectus.]

[To be provided as applicable.]

Certain Characteristics of the Mortgage Loans

The Mortgage Loans are expected to have the approximate aggregate characteristics as of the cut-off date, including data regarding how many Mortgage Loans have been modified by each category of modification pursuant to loan modification programs, as set forth in Annex A attached to this prospectus supplement and incorporated by reference herein.  Prior to the issuance of the Bonds, Mortgage Loans may be removed from the Mortgage Pool[s] as a result of incomplete documentation or otherwise, if the Depositor deems such removal necessary or appropriate.

[Delinquency and Loss Information for the Pool Assets

Delinquency and loss information for the mortgage pool, including statistical information regarding delinquencies and losses, will be included.]

[Table of delinquency and loss information of securitized mortgage pool through charge-off.]

[Conveyance of Subsequent Mortgage Loans

On the Closing Date, approximately $[_____] will be deposited by the Issuing Entity Administrator into an eligible account.  During the period from the Closing Date to [_______], the Depositor is expected to purchase from time to time subsequent mortgage loans from the Seller and, in turn, sell all such subsequent mortgage loans to the Trust for inclusion in the Mortgage Pool.  The purchase price for each subsequent mortgage loan will equal its Scheduled Principal Balance as of the date of origination (reduced by principal payments due or paid prior to the purchase date, if any) and will be paid by the Issuing Entity Administrator from the related Pre-Funding Amount.

As of the cut-off date, the mortgage loans expected to be conveyed as the subsequent mortgage loans by the Seller are expected to have the following characteristics:

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Number of Subsequent Mortgage Loans

Total Scheduled Principal Balance

Mortgage Rates:

Weighted Average

Range

Weighted Average Remaining Term to Maturity (in months)

Original Loan-to-Value Ratios:

Weighted Average

Range

Scheduled Principal Balances:

Average

Range

Pursuant to the Pooling and Servicing Agreement, the conveyance of subsequent mortgage loans to the Trust may be made on any Business Day during the Pre-Funding Period, subject to certain conditions in the Pooling and Servicing Agreement being satisfied, including, among others, that:

· [The subsequent mortgage loans conveyed on the subsequent transfer date must satisfy the same representations and warranties applicable to the initial mortgage loans set forth in the Mortgage Loan Purchase Agreement, which representations and warranties have been confirmed by the rating agencies rating the Certificates;

· The subsequent mortgage loans conveyed on the subsequent transfer date are selected in a manner reasonably believed not to be adverse to the interests of the Certificateholders;

· [The Certificate Trustee receives an Officer’s Certificate confirming the satisfaction of each condition precedent specified in the Pooling and Servicing Agreement and opinions of counsel with respect to certain corporate, bankruptcy and tax matters relating to the transfer of subsequent mortgage loans in the forms substantially similar to those delivered on the Closing Date;]

· The conveyance of the subsequent mortgage loans on the subsequent transfer date will not result in a reduction or withdrawal of any ratings assigned to the Offered Certificates;

· [No subsequent mortgage loan conveyed on the subsequent transfer date may be more than one monthly payment delinquent in payment;]

· Each subsequent mortgage loan will have been underwritten substantially in accordance with the applicable originator’s underwriting guidelines;

· No subsequent mortgage loan may have a remaining term to maturity exceeding [     ] months;

· [No subsequent mortgage loan may have a Loan-to-Value Ratio greater than [125]%;]

· The weighted average Mortgage Rate for all the Mortgage Loans at the end of the Pre-Funding Period must not be more than 100 basis points lower than the weighted average Mortgage Rate of the initial mortgage loans;

· Following the conveyance of the subsequent mortgage loans on the subsequent transfer date, the weighted average characteristics of the Mortgage Loans the Mortgage Pool will remain substantially similar to the characteristics of the initial mortgage loans in the Mortgage Pool as of the cut-off date; and

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· [An independent accountant must provide the Depositor, the applicable rating agencies rating the Certificates, the Certificate Trustee and the Underwriters with a letter stating that the characteristics of the subsequent mortgage loans conform to the characteristics described above and in the Pooling and Servicing Agreement.]]

If the Trust does not apply the full pre-funding amount towards the purchase of subsequent mortgage loans prior to the end of the Pre-Funding Period, then such remaining proceeds in the pre-funding account will be paid as a principal prepayment to the related Certificateholders on the [___] Distribution Date.

On the Closing Date, the Issuing Entity Administrator will also establish a capitalized interest account which will be funded by an initial deposit made by the Depositor on the Closing Date of approximately $[____], which represents approximately [_____]% of the total principal balance of the Mortgage Loans as of the cut-off date.  Amounts in the capitalized interest account will be applied by the Issuing Entity Administrator during the Pre-Funding Period to pay interest on that portion of the Certificates supported by the pre-funding amount.  At the end of the Pre-Funding Period, any remaining funds in the capitalized interest account will be paid to the Depositor and the account will be terminated.]

STATIC POOL INFORMATION

Static pool information with respect to the sponsor’s prior securitized pools during the period from [specify date] to [specify date], presented by pool, is available online at http://www.sequoia-reports.com. Access to this web address is unrestricted and free of charge.    Information available at this web address is deemed to be part of this prospectus supplement, except to the extent provided under “Static Pool Information” in the accompanying prospectus.  [A reference to any third-party static pool information is to be provided, as applicable.]

Various factors may affect the prepayment, delinquency and loss performance of the mortgage loans over time. The various mortgage loan pools for which performance information is shown at the above internet addresses had initial characteristics that differed, and may have differed in ways that were material to the performance of those mortgage pools. These differing characteristics include, among others, product type, credit quality, geographic concentration, originator concentration, servicer concentration, average principal balance, weighted average interest rate, weighted average loan-to-value ratio, weighted average term to maturity and the presence or absence of prepayment penalties. We do not make any representation, and you should not assume, that the performance information shown at the above internet addresses is in any way indicative of the performance of the mortgage loans in the trust fund. The mortgage loans will continue to be serviced in accordance with accepted servicing practices through charge-off, which we define as the ultimate liquidation of the loan or any REO acquired in respect of the loan. For purposes of Form 10-D reporting and other such reporting under the Securities Exchange Act, delinquency information on the mortgage loans will be provided through charge-off in thirty (30) day segments, measured as of the end of the month prior to the reporting month.

ADDITIONAL INFORMATION

The depositor has filed the registration statement with the Securities and Exchange Commission (the “SEC”) (Registration No. _________). The depositor is also subject to some of the information requirements of the Exchange Act, and, accordingly, will file reports thereunder with the SEC. The registration statement and the exhibits thereto, and reports and other information filed by the depositors under the Exchange Act can be inspected and copied at the public reference facilities maintained by the Securities and Exchange Commission at 100 F Street, N.E., Washington, D.C. 20549, or by calling the SEC at 1-800-SEC-0330, and at certain of its Regional Offices located as follows: Chicago Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and Northeast Regional Office, 233 Broadway, New York, New York 10279 and electronically through the Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval System at the Securities and Exchange Commission’s web site (http://www.sec.gov).

The description in this prospectus supplement of the trust fund and the mortgaged properties is based upon the mortgage pool as expected to be constituted at the close of business on the cut-off date, as adjusted for the scheduled principal payments due on or before the cut-off date. Prior to the issuance of the offered certificates, mortgage loans may be removed from the trust fund as a result of incomplete documentation or otherwise, if the depositor deems that removal necessary or appropriate. A limited number of other mortgage loans may be added to the trust fund prior to the issuance of the offered certificates. The depositor believes that the information in this prospectus supplement will be substantially representative of the characteristics of the mortgage pool as it will be constituted at the time the offered certificates are issued although the range of mortgage rates and maturities and some other characteristics of the mortgage loans in the trust fund may vary. 

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A current report on Form 8-K will be available to purchasers of the offered certificates and will be filed, together with the pooling and servicing agreement, with the SEC after the initial issuance of the offered certificates. In the event a material number of mortgage loans are removed from or added to the trust fund as described in the preceding paragraph, that removal or addition will be noted in the current report.

Pursuant to the pooling and servicing agreement, the issuing entity administrator will prepare a monthly statement to certificateholders containing the information described under “The Agreements — Certain Matters Under the Pooling and Servicing Agreement — Reports to certificateholders.” The issuing entity administrator may make available each month, to any interested party, the monthly statement to certificateholders via the issuing entity administrator’s website. The issuing entity administrator’s website will be located at [www._______], and assistance in using the website can be obtained by calling the issuing entity administrator’s customer service desk at [_________]. Parties that are unable to use the above distribution option are entitled to have a paper copy mailed to them via first class mail by notifying the issuing entity administrator at the following address: [___________]. The issuing entity administrator will have the right to change the way such reports are distributed in order to make such distributions more convenient and/or more accessible, and the issuing entity administrator will provide timely and adequate notification to such parties regarding any such changes.

In addition, within a reasonable period of time after the end of each calendar year, the issuing entity administrator will, upon request, prepare and deliver to each certificateholder of record during the previous calendar year a statement containing information necessary to enable certificateholders to prepare their tax returns. These statements will not have been examined and reported upon by an independent public accountant.

THE ISSUING ENTITY

General

The issuing entity is a [statutory trust established under the laws of the State of Delaware] [or] [common law trust formed under the laws of the State of New York] by a pooling and servicing agreement, dated as of [_________], 200[__] . The issuing entity was formed for the sole purpose of issuing the certificates. The depositor is the settlor and sole beneficiary of the issuing entity. The depositor is a limited purpose finance corporation the capital stock of which is wholly owned by [_________________] Redwood Trust, Inc., a Maryland corporation. Redwood Trust will be the manager of the issuing entity pursuant to a management agreement entered into with the issuing entity. None of the depositor, Redwood Trust, [_______________] or any of their respective affiliates has guaranteed or is otherwise obligated with respect to payment of the certificates and no person or entity other than the issuing entity is obligated to pay the certificates, except as specifically set forth in this prospectus supplement.

The Issuing Entity’s assets will consist almost entirely of the mortgages which will be pledged to secure the certificates. If the mortgage loans and other collateral securing the certificates are insufficient for payment of the certificates, it is unlikely that significant other assets of the issuing entity will be available for payment of the certificates. The amount of funds available to pay the certificates may be affected by, among other things, realized losses incurred on defaulted mortgage loans.

The pooling and servicing agreement prohibits the Issuing Entity from incurring any indebtedness other than the certificates, or assuming or guaranteeing the indebtedness of any other person.

The Ownership Certificate

The equity ownership in the Trust will be evidenced by the Ownership Certificate.  The holder of the Ownership Certificate will be entitled to receive on each Distribution Date any remaining cashflow from Mortgage Loan collections after all principal and interest on the Certificates and other expenses of the Trust for such Distribution Date have been made.

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DESCRIPTION OF THE CERTIFICATES

General

The Certificates will be issued pursuant to the Pooling and Servicing Agreement. Set forth below are summaries of the specific terms and provisions pursuant to which the Certificates will be issued. The following summaries are subject to, and are qualified in their entirety by reference to, the provisions of the Pooling and Servicing Agreement. When particular provisions or terms used in the Pooling and Servicing Agreement are referred to, the actual provisions (including definitions of terms) are incorporated by reference.

The [Sequoia Mortgage Trust [____]] Mortgage Pass-Through Certificates (the “Certificates”), will consist of the Class A-1 Certificates (the “Senior Certificates”) and the Class B-1 Certificates (the “Subordinated Certificates”). The Issuing Entity will also issue the Investor Certificate (the “Investor Certificate”) as described herein. The Senior Certificates and the Subordinated Certificates are collectively referred to herein as the “Offered Certificates.” Only the Certificates are offered hereby. The Classes of Certificates will have the respective Certificate Interest Rates described on the cover hereof. The Investor Certificate will bear interest at the “Certificate Interest Rate” described herein.

The “Class Principal Amount” of (a) the Senior Certificates (the “Senior Class Principal Amount”) as of any Distribution Date is the Original Senior Class Principal Amount reduced by all amounts previously distributed to holders of the Senior Certificates as payments of principal, (b) the Subordinated Certificates (the “Subordinated Class Principal Amount”) as of any Distribution Date is the lesser of (i) the aggregate of the Stated Principal Balances of the Mortgage Loans, less the Senior Class Principal Amount immediately prior to such date, and (ii) the Original Subordinated Class Principal Amount reduced by all amounts previously distributed to holders of the Subordinated Certificates as payments of principal. The Senior Certificates will have an original Senior Class Principal Amount of $[________] (the “Original Senior Class Principal Amount”) and the Subordinated Certificates will have an original Subordinated Class Principal Amount of $[________] (the “Original Subordinated Class Principal Amount”). The “Invested Amount” of the as of any Distribution Date is the lesser of (i) the aggregate of the Stated Principal Balances of the Mortgage Loans, less the sum of (x) the Senior Class Principal Amount and (y) the Subordinated Class Principal Amount, in each case immediately prior to such date, and (ii) the Original Invested Amount reduced by all amounts previously distributed to the holder of the Investor Certificate in reduction of the Invested Amount. The Investor Certificate will have an original Invested Amount of approximately $[________] (the “Original Invested Amount”).

Book-Entry Certificates

The Certificates [or the Class [___] Certificates] will be book-entry Certificates (each, a Class of “Book-Entry Certificates”). Persons acquiring beneficial ownership interests in the Certificates (“Certificate Owners”) may elect to hold their Certificates through the Depository Trust Company (“DTC”) in the United States, or CEDEL or 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 principal amount of the Certificates and will initially be registered in the name of Cede & Co., the nominee of DTC. CEDEL and Euroclear will hold omnibus positions on behalf of their participants through customers’ securities accounts in CEDEL’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, N.A., will act as depositary for CEDEL and The Chase Manhattan 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 representing Class Principal Amounts of $[________] and in multiples of $1,000 in excess thereof. Except as described below, no person acquiring a Book-Entry Certificate (each, a “beneficial owner”) will be entitled to receive a physical certificate representing such Certificate (a “Definitive Certificate”). Unless and until Definitive Certificates are issued, it is anticipated that the only “Certificateholders” of the Certificates will be Cede & Co., as nominee of DTC. Certificate Owners will not be Certificateholders as that term is used in the Pooling and Servicing Agreement. Certificate Owners are only permitted to exercise their rights indirectly through the participating organizations that utilize the services of DTC, including securities brokers and dealers, banks and trust companies and clearing corporations and certain other organizations (“Participants”) and DTC.

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

Certificate Owners will receive all payments of principal of, and interest on, the Certificates from the Certificate Trustee through DTC and DTC participants. While the Certificates are outstanding (except under the circumstances described below), under the rules, regulations and procedures creating and affecting DTC and its operations (the “Rules”), DTC is required to make book-entry transfers among Participants on whose behalf it acts with respect to the Certificates and is required to receive and transmit payments of principal of, and interest on, the Certificates. Participants and indirect participants which have indirect access to the DTC system, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (“Indirect Participants”), with whom Certificate Owners have accounts with respect to Certificates are similarly required to make book-entry transfers and receive and transmit such payments on behalf of their respective Certificate Owners. Accordingly, although Certificate Owners will not possess certificates, the Rules provide a mechanism by which Certificate Owners will receive payments 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 Certificates, except under the limited circumstances described below. Unless and until Definitive Certificates are issued, Certificate Owners who are not Participants may transfer ownership of Certificates only through Participants and Indirect Participants by instructing such Participants and Indirect Participants to transfer Certificates, by book-entry transfer, through DTC for the account of the purchasers of such Certificates, which account is maintained with their respective Participants. Under the Rules and in accordance with DTC’s normal procedures, transfers of ownership of Certificates will be executed through DTC and the accounts of the respective Participants at DTC will be debited and credited. Similarly, the Participants and Indirect Participants will make debits or credits, as the case may be, on their records on behalf of the selling and purchasing Certificate Owners.

Because of time zone differences, credits of securities received in CEDEL or Euroclear as a result of a transaction with a Participant will be made during subsequent securities settlement processing and dated the business day following the DTC settlement date. Such credits or any transactions in such securities settled during such processing will be reported to the relevant Euroclear or CEDEL Participants on such business day. Cash received in CEDEL or Euroclear as a result of sales of securities by or through a CEDEL Participant (as defined herein) or Euroclear Participant (as defined herein) to a DTC Participant will be received with value on the DTC settlement date but will be available in the relevant CEDEL or Euroclear cash account only as of the business day following settlement in DTC. For information relating to tax documentation procedures relating to the Certificates, see “MATERIAL FEDERAL INCOME TAX CONSEQUENCES — Withholding with Respect to Certain Foreign Investors” and “— Backup Withholding” in the prospectus and “GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES — Certain U.S. Federal Income Tax Documentation Requirements” in Annex B hereto , which Annex B is attached to this prospectus supplement and is incorporated by reference herein.

Payments on Mortgage Loans; Accounts

On or prior to the Closing Date, the Master Servicer will establish and maintain or cause to be established and maintained a separate account or accounts for the collection of payments on the Mortgage Loans (the “Certificate Distribution Account”). On or prior to the Closing Date, the Certificate Trustee will establish an account (the “Distribution Account”), which will be maintained with the Certificate Trustee in trust for the benefit of the Certificateholders. On or prior to the business day immediately preceding each Distribution Date, the Master Servicer will withdraw from the Certificate Distribution Account the Certificate Distribution Amount for such Distribution Date, to the extent of Available Funds on deposit therein, and will deposit such amount in the Distribution Account. The “Certificate Distribution Amount” for any Distribution Date will equal the sum of (i) the Senior Interest Payment Amount, (ii) the Senior Principal Payment Amount, (iii) the Subordinated Interest Payment Amount and (iv) the Subordinated Principal Payment Amount (as each such term is defined herein). Funds credited to the Certificate Account or the Distribution Account may be invested at the direction of the Depositor for the benefit and at the risk of the Depositor in Permitted Investments, as defined in the Master Servicing Agreement, that are scheduled to mature on or prior to the business day preceding the next Distribution Date.

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Payments

Payments on the Certificates will be made by the Certificate Trustee on [the th day of each month], or if such day is not a business day, on the first business day thereafter, commencing in [____________, 200__] (each, a “Distribution Date”), to the persons in whose names such Certificates are registered at the close of business on the last business day of the month preceding the month of such Distribution Date (the “Record Date”).

Payments on each Distribution Date will be made by check mailed to the address of the person entitled thereto as it appears on the applicable certificate register or, in the case of a Certificateholder who holds 100% of a Class of Certificates or who holds Certificates with an aggregate initial Class Principal Amount of $1,000,000 or more and who has so notified the Certificate Trustee in writing in accordance with the Pooling and Servicing Agreement, by wire transfer in immediately available funds to the account of such Certificateholder at a bank or other depository institution having appropriate wire transfer facilities; provided, however, that the final payment in retirement of the Certificates will be made only upon presentment and surrender of such Certificates at the Corporate Trust Office of the Certificate Trustee.

As more fully described herein, payments will be made on each Distribution Date from Available Funds in the following order of priority: (i) to interest on the Senior Certificates; (ii) to principal of the Senior Certificates; (iii) to interest on the Subordinated Certificates; (iv) to principal of the Subordinated Certificates; (v) to interest on the Investor Certificate; (vi) to principal of the Investor Certificate; and (vii) to the holder of the Investor Certificate, all remaining Available Funds, subject to certain limitations set forth herein under “— Principal.”

“Available Funds” with respect to any Distribution Date will be equal to the sum of (i) all scheduled installments of interest (net of the related Expense Fees) and principal due [on the Due Date in the month] in which such Distribution Date occurs and received prior to the related Determination Date, together with any Advances in respect thereof; (ii) all proceeds of any primary mortgage guaranty insurance policies and any other insurance policies with respect to the Mortgage Loans, to the extent such proceeds are not applied to the restoration of the related Mortgaged Property or released to the Mortgagor in accordance with the applicable Servicer’s or the Master Servicer’s normal servicing procedures (collectively, “Insurance Proceeds”) and all other cash amounts received and retained in connection with the liquidation of defaulted Mortgage Loans, by foreclosure or otherwise (“Liquidation Proceeds”), during the [month] preceding the month of such Distribution Date (in each case, net of unreimbursed expenses incurred in connection with a liquidation or foreclosure and unreimbursed Advances, if any); (iii) all partial or full prepayments received during the [month] preceding the month of such Distribution Date; and (iv) amounts received with respect to such Distribution Date as the Substitution Adjustment Amount or purchase price in respect of a Deleted Mortgage Loan or a Mortgage Loan purchased by Redwood Trust [or by the Master Servicer or the Depositor] as of such Distribution Date, reduced by amounts in reimbursement for Advances previously made and other amounts as to which the applicable Servicer or the Master Servicer is entitled to be reimbursed pursuant to the Master Servicing Agreement.

On each Distribution Date after the Subordinated Class Principal Amount and the Invested Amount have been reduced to zero, the amount, if any, by which the Senior Interest Payment Amount and the Senior Principal Payment Amount exceed the Available Funds, shall be paid by the Insurer to the Senior Certificateholders pursuant to the Certificate Insurance Policy.

Interest

The Certificate Interest Rate for each Class of Certificates for each Distribution Date (each, a “Certificate Interest Rate”) is described on the cover hereof. On each Distribution Date, to the extent of funds available therefor, each Class of Certificates and the Investor Certificate will be entitled to receive an amount allocable to interest as described below (as to each such Class or the Investor Certificate, as applicable, the “Interest Payment Amount”) with respect to the related Interest Accrual Period. With respect to each Distribution Date, the “Interest Accrual Period” for each Class of Certificates and the Investor Certificate will be the [calendar month] preceding the month of such Distribution Date.

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The Interest Payment Amount for the Senior Certificates (the “Senior Interest Payment Amount”) will be equal to the sum of (i) interest at the Senior Certificate Interest Rate on the Senior Class Principal Amount, and (ii) the sum of the amounts, if any, by which the amount described in clause (i) above on each prior Distribution Date exceeded the amount actually distributed as interest on such prior Distribution Dates and not subsequently distributed. The Interest Payment Amount for the Subordinated Certificates (the “Subordinated Interest Payment Amount”) will be equal to the sum of (i) interest at the Subordinated Certificate Interest Rate on the Subordinated Class Principal Amount, (ii) interest at the Subordinated Certificate Interest Rate on any Subordinated Principal Carryover Shortfall, (iii) the sum of the amounts, if any, by which the sum of the amounts described in clauses (i) and (ii) above on each prior Distribution Date exceeded the amount actually distributed as interest on such prior Distribution Dates and not subsequently distributed (the “Subordinated Interest Carryover Shortfall”) and (iv) interest at the Subordinated Certificate Interest Rate on any Subordinated Interest Carryover Shortfall (to the extent permitted by applicable law). The Interest Payment Amount for the Investor Certificate (the “Certificate Interest Payment Amount”) will be equal to interest at the Certificate Interest Rate on the Invested Amount. The Senior Certificates will not be entitled to interest on any Senior Interest Payment Amount not paid when due prior to such time as the Certificates are declared immediately due and payable upon the occurrence of an Event of Default as described herein under “— Priority of Distributions and Allocation of Shortfalls.” The Investor Certificate will not be entitled to interest on any Certificate Interest Payment Amount not paid when due.

The interest payable on any Distribution Date as described above, but not the entitlement thereto, for the Subordinated Certificates, and in the event of a default of the Insurer under the Certificate Insurance Policy, the Senior Certificates, will be reduced by their respective proportionate amounts of “Net Interest Shortfalls” for such Distribution Date, if any, based on the amount of interest each Class of Certificates would otherwise be entitled to receive on such Distribution Date before taking into account any reduction in such amounts resulting from such Net Interest Shortfalls. With respect to any Distribution Date, the “Net Interest Shortfall” is equal to the amount by which the sum of (i) the amount of interest which would otherwise have been received with respect to any Mortgage Loan that was the subject of a Relief Act Reduction and (ii) any Prepayment Interest Shortfalls, in each case during the calendar month preceding the month of such Distribution Date, exceeds the sum of (i) the Master Servicing Fee for such period and (ii) the amounts otherwise payable on such Distribution Date to the holder of the Investor Certificate as described in clauses “fifth”, “sixth” and “seventh” under “— Priority of Distributions and Allocation of Shortfalls” below. A “Relief Act Reduction” is a reduction in the amount of monthly interest payment on a Mortgage Loan pursuant to the Servicemembers Civil Relief Act. A “Prepayment Interest Shortfall” is the amount by which interest paid by a borrower in connection with a prepayment of principal on a Mortgage Loan is less than one month’s interest at the related Mortgage Rate on the Stated Principal Balance of such Mortgage Loan.

Accrued interest to be paid on any Distribution Date will be calculated, in the case of each Class of Certificates and the Investor Certificate, on the basis of the related Class Principal Amount or Invested Amount, as applicable, immediately prior to such Distribution Date. Interest will be calculated and payable on the basis of a 360-day year divided into twelve 30-day months.

Principal

General. All payments and other amounts received in respect of principal of the Mortgage Loans will be allocated among the Senior Certificates, the Subordinated Certificates and the Investor Certificate.

Senior Principal Payment Amount. On each Distribution Date, the Available Funds remaining after payment of interest with respect to the Senior Certificates, up to the amount of the Senior Principal Payment Amount for such Distribution Date, will be distributed as principal of the Senior Certificates. The “Senior Principal Payment Amount” for any Distribution Date will equal the Senior Percentage of the sum of (a) the principal portion of the scheduled payment due on each Mortgage Loan [on the related Due Date], (b) the principal portion of the purchase price of each Mortgage Loan that was purchased by Redwood Trust or another person pursuant to the Mortgage Loan Purchase Agreement (as defined herein) [or any optional purchase by the Master Servicer or the Depositor of a default Mortgage Loan] as of such Distribution Date, (c) the Substitution Adjustment Amount in connection with any Deleted Mortgage Loan received with respect to such Distribution Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of principal of Mortgage Loans that are not yet Liquidated Mortgage Loans received during the [calendar month] preceding the month of such Distribution Date, (e) with respect to each Mortgage Loan that became a Liquidated Mortgage Loan during the [calendar month] preceding the month of such Distribution Date, the Stated Principal Balance of such Mortgage Loan, and (f) all partial and full principal prepayments by borrowers received during the [calendar month] preceding the month of such Distribution Date.

“Stated Principal Balance” means, as to any Mortgage Loan and Due Date, the unpaid principal balance of such Mortgage Loan as of such Due Date, as specified in the amortization schedule at the time relating thereto (before any adjustment to such amortization schedule by reason of any moratorium or similar waiver or grace period), after giving effect to any previous partial principal prepayments and Liquidation Proceeds received and to the payment of principal due on such Due Date and irrespective of any delinquency in payment by the related Mortgagor. The “Pool Principal Balance” with respect to any Distribution Date equals the aggregate of the Stated Principal Balances of the Mortgage Loans outstanding on the Due Date in the month preceding the month of such Distribution Date. 

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The “Senior Percentage” for any Distribution Date is the percentage equivalent of a fraction the numerator of which is the Senior Class Principal Amount immediately prior to such date and the denominator of which is the sum of (i) the Senior Class Principal Amount, (ii) the Subordinated Class Principal Amount and (iii) the Invested Amount, in each case immediately prior to such date. The “Subordinated Percentage” for any Distribution Date is the percentage equivalent of a fraction the numerator of which is the Subordinated Class Principal Amount immediately prior to such date and the denominator of which is the sum of (i) the Senior Class Principal Amount, (ii) the Subordinated Class Principal Amount and (iii) the Invested Amount, in each case immediately prior to such date. The “Investor Percentage” for any Distribution Date will be calculated as the difference between 100% and the sum of the Senior Percentage and the Subordinated Percentage for such date.

Subordinated Principal Payment Amount. On each Distribution Date, to the extent of Available Funds therefor, the Subordinated Principal Payment Amount for such Distribution Date will be distributed as principal of the Subordinated Certificates. The “Subordinated Principal Payment Amount” for any Distribution Date will equal the sum of (i) the Subordinated Percentage of the sum of (a) the principal portion of the scheduled payment due on each Mortgage Loan [on the related Due Date], (b) the principal portion of the purchase price of each Mortgage Loan that was purchased by Redwood Trust or another person pursuant to the Mortgage Loan Purchase Agreement [or by the Master Servicer or the Depositor in connection with any optional purchase by the Master Servicer of a defaulted Mortgage Loan] as of such Distribution Date, (c) the Substitution Adjustment Amount in connection with any Deleted Mortgage Loan received with respect to such Distribution Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of principal of Mortgage Loans that are not yet Liquidated Mortgage Loans received during the [calendar month] preceding the month of such Distribution Date, (e) with respect to each Mortgage Loan that became a Liquidated Mortgage Loan during the [calendar month] preceding the month of such Distribution Date, the Stated Principal Balance of such Mortgage Loan and (f) all partial and full principal prepayments by borrowers received during the [calendar month] preceding the month of such Distribution Date and (ii) any Subordinated Principal Carryover Shortfall. The “Subordinated Principal Carryover Shortfall” for any Distribution Date will equal the excess of (a) the Original Subordinated Class Principal Amount reduced by all amounts previously distributed to holders of the Subordinated Certificates as payments of principal or Subordinated Principal Carryover Shortfall, over (b) the Subordinated Class Principal Amount immediately prior to such date.

Invested Amount Payment. On each Distribution Date, to the extent of Available Funds therefor, the Invested Amount Payment for such Distribution Date will be distributed in reduction of the Invested Amount of the Certificate. The “Invested Amount Payment” for any Distribution Date will equal the sum of (i) the Investor Percentage of the sum of (a) the principal portion of the scheduled payment due on each Mortgage Loan [on the related Due Date], (b) the principal portion of the purchase price of each Mortgage Loan that was purchased by Redwood Trust or another person pursuant to the Mortgage Loan Purchase Agreement (as defined herein) [or any optional purchase by the Master Servicer or the Depositor of a defaulted Mortgage Loan] as of such Distribution Date, (c) the Substitution Adjustment Amount in connection with any Deleted Mortgage Loan received with respect to such Distribution Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of principal of Mortgage Loans that are not yet Liquidated Mortgage Loans received during the [calendar month] preceding the month of such Distribution Date, and (e) all partial and full principal prepayments by borrowers received during the [calendar month] preceding the month of such Distribution Date and (ii) with respect to each Mortgage Loan that became a Liquidated Mortgage Loan during the [calendar month] preceding the month of such Distribution Date, the Liquidation Proceeds allocable to principal received with respect to such Mortgage Loan, after application of such amounts pursuant to clause (e) of the definition of Senior Principal Payment Amount and clause (e) of the definition of Subordinated Principal Payment Amount.

Priority of Distributions and Allocation of Shortfalls

Prior to the declaration that the Certificates are due and payable, on any Distribution Date Available Funds will be applied in the following order of priority:

· first, to the Senior Interest Payment Amount;

· second, to the Senior Principal Payment Amount;

· third, to the Subordinated Interest Payment Amount;

· fourth, to the Subordinated Principal Payment Amount;

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· fifth, to the holder of the Residual Certificate, the balance of any remaining Available Funds.

[To the extent helpful to the understanding of the securities, a graphic illustration of the flow of funds, distribution priorities and allocations will be inserted here.]

If a Realized Loss results in the Stated Principal Balances of the Mortgage Loans declining in an amount greater than the sum of (i) the payments of principal on the Senior Certificates, (ii) the payments of principal on the Subordinated Certificates and (iii) the payment in reduction of the Invested Amount, the Senior Percentage, the Subordinated Percentage and the Investor Percentage may shift (as a result of their methods of computation as described above under “— Principal”) such that funds available in the Distribution Account for payments of principal on each future Distribution Date may be allocated in a higher ratio to the Senior Certificates as a result of such shortfall. This shift of the Senior Percentage, the Subordinated Percentage and the Investor Percentage may cause the Senior Certificates to amortize more rapidly, and the Subordinated Certificates and the Investor Certificate to amortize more slowly, than would otherwise have been the case in the absence of such shortfalls. An investor should consider the risk that, in the case of any Certificate purchased at a discount, a slower 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 and, in the case of any Certificate purchased at a premium, a faster than anticipated rate of principal payments on the Mortgage Loans could result in an actual yield to such investor that is lower than the anticipated yield. In addition, an investor in the Certificates should consider the risk that there can be no assurance that investors in the Certificates will be able to reinvest the payments thereon at yields equaling or exceeding the yields on such Certificates. It is possible that yields on any such reinvestments will be lower, and may be significantly lower, than the yields on the Certificates. In general, a “Realized Loss” means, with respect to a Liquidated Mortgage Loan, the amount by which the remaining unpaid principal balance of the related Mortgage Loan exceeds the amount of Liquidation Proceeds applied to the principal balance of the related Mortgage Loan. A “Liquidated Mortgage Loan” is a defaulted Mortgage Loan as to which the Master Servicer has determined that all recoverable liquidation and insurance proceeds have been received.

Under the Pooling and Servicing Agreement, an Event of Default will not occur solely due to the occurrence of Shortfalls that affect only the Subordinated Certificates until all the Senior Certificates have been paid in full and then only if Shortfalls on the Subordinated Certificates have not been paid. In addition, an Event of Default by reason of any Shortfalls that affect the Senior Certificates will occur on any Distribution Date only when the Pool Principal Balance is less than the principal amount of the Senior Certificates outstanding after application of all available amounts on deposit in the Distribution Account on such Distribution Date. Nevertheless, at any time following an Event of Default arising from a Shortfall affecting the Senior Certificates, the holders of outstanding Certificates, whether Senior Certificates or Subordinated Certificates, representing more than 50% in principal amount of all Certificates then outstanding, may declare the Certificates due and payable or take any other action pursuant to the terms of the Pooling and Servicing Agreement. Until the Certificates have been declared due and payable following an Event of Default, the holders of the Subordinated Certificates may not request the Certificate Trustee to take any action, other than the application of available funds in the Distribution Account to pay principal and interest as provided herein, and may not otherwise cause any action to be taken to enforce the obligation of the Issuing Entity to pay principal and interest on the Subordinated Certificates. Additionally, prior to the Certificates being declared due and payable following an Event of Default, the Senior Certificates will not accrue interest in any form on the interest component of any Shortfall attributable to the Senior Certificates. Should an Event of Default occur, payments will be allocated on each Distribution Date in accordance with the priorities described herein under “— Principal”, which would otherwise be applicable on such Distribution Date had an Event of Default not occurred.

If Available Funds are insufficient to make payments on the Senior Certificates, Senior Certificateholders will be dependent upon the ability of the Insurer to meet its obligations under the Certificate Insurance Policy. For any Distribution Date, the amount of Available Funds will be dependent in part upon whether any Realized Losses have been incurred on the Mortgage Loans during the most recent Prepayment Period. Realized Losses on the Mortgage Loans will be allocated first to the Investor Certificate, second to the Subordinated Certificates and third, in the event the Insurer defaults on its obligations under the Certificate Insurance Policy, to the Senior Certificates.

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Stated Maturity

The Stated Maturity for each Class of Certificates is the date determined by the Depositor which is years after the Distribution Date immediately following the latest maturity date of any Mortgage Loan. The Stated Maturity of each Class of Certificates is [___________, 200__].

Structuring Assumptions

Unless otherwise specified, the information in the tables in this Prospectus Supplement has been prepared on the basis of the following assumed characteristics of the Mortgage Loans and the following additional assumptions (collectively, the “Structuring Assumptions”): (i) the Mortgage Loan Pool consists of one Mortgage Loan with the following characteristics:

Principal Balance	Mortgage Rate	Net   Mortgage Rate	Original Term in Maturity  (in Months)	Remaining Term to Maturity   (in months)
$	%	%

(ii) the Mortgage Loans prepay at the specified constant Prepayment Assumptions, (iii) no defaults in the payment by Mortgagors of principal of and interest on the Mortgage Loans are experienced, (iv) scheduled payments on the Mortgage Loans are received on the first day of each month commencing in the calendar month following the Closing Date and are computed prior to giving effect to prepayments received on the last day of the prior month, (v) prepayments are allocated as described herein without giving effect to loss and delinquency tests, (vi) there are no Net Interest Shortfalls and prepayments represent prepayments in full of individual Mortgage Loans and are received on the last day of each month, commencing in the calendar month of the Closing Date, (vii) the scheduled monthly payment for each Mortgage Loan has been calculated based on the assumed mortgage loan characteristics described in item (i) above such that each such mortgage loan will amortize in amounts sufficient to repay the principal balance of such assumed mortgage loan by its remaining term to maturity, (viii) the initial Class Principal Amount or Invested Amount, as applicable, of each Class of Certificates and the Investor Certificate, respectively, is as set forth on the cover page hereof and under “SUMMARY — Securities Other than the Certificates” herein, (ix) interest accrues on each Class of Certificates and the Investor Certificate at the applicable interest rate described on the cover hereof or described herein, (x) payments in respect of the Certificates and the Investor Certificate are received in cash on the th day of each month commencing in the calendar month following the Closing Date, (xi) the closing date of the sale of the Certificates is [__________, 200__], (xii) Redwood Trust is not required to purchase or substitute for any Mortgage Loan and (xiii) [the Master Servicer or the Depositor does not exercise any option to purchase any Mortgage Loans described herein under “— Optional Purchase of Defaulted Loans”] and the Issuing Entity does not exercise any option to redeem the Certificates as described herein under “— Redemption at the Option of the Issuing Entity.” While it is assumed that each of the Mortgage Loans prepays at the specified constant Prepayment Assumptions, this is not likely to be the case. Moreover, discrepancies exist between the characteristics of the actual Mortgage Loans which will be delivered to the Certificate Trustee and characteristics of the Mortgage Loans assumed in preparing the tables herein.

Prepayments of mortgage loans commonly are measured relative to a prepayment standard or model. The model used in this Prospectus Supplement (the “Prepayment Assumption”) represents an assumed rate of prepayment each month relevant to the then outstanding principal balance of a pool of mortgage loans. The Prepayment Assumption 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 pool of mortgage loans, including the Mortgage Loans. A 100% Prepayment Assumption assumes a Constant Prepayment Rate (“CPR”) of [____]% per annum of the then outstanding principal balance of such mortgage loans in the first month of the life of the mortgage loans and an additional [____]% per annum in each month thereafter until the month. Beginning in the month and in each month thereafter during the life of such mortgage loans, a 100% Prepayment Assumption assumes a CPR of [____]% per annum each month. As used in the tables below, a [____]% Prepayment Assumption assumes a prepayment rate equal to [____]% of the Prepayment Assumption. Correspondingly, a [____]% Prepayment Assumption assumes a prepayment rate equal to [____]% of the Prepayment Assumption, and so forth.

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Optional Purchase of Defaulted Loans

The Master Servicer or the Depositor may, at its option, purchase from the Issuing Entity any Mortgage Loan which is delinquent in payment by [____] days or more. Any such purchase will be at a price equal to 100% of the Stated Principal Balance of such Mortgage Loan plus accrued interest thereon at the applicable Mortgage Rate from the date through which interest was last paid by the related Mortgagor or advanced to the first day of the month in which such amount is to be distributed.

Weighted Average Lives of the Certificates

The weighted average life of a Certificate is determined by (a) multiplying the amount of the reduction, if any, of the Class Principal Amount of such Certificate on each Distribution Date by the number of years from the date of issuance to such Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in Class Principal Amount of such Certificate referred to in clause (a).

For a discussion of the factors which may influence the rate of payments (including prepayments) of the Mortgage Loans, see “RISK FACTORS — Yield, Prepayment and Maturity Risks” herein and “RISK FACTORS — Prepayment and Yield Considerations” in the Prospectus.

In general, the weighted average lives of the Certificates will be shortened if the level of prepayments of principal of the Mortgage Loans increases. However, the weighted average lives of the Certificates will depend upon a variety of other factors, including the timing of changes in such rate of principal payments and the priority sequence of distributions of principal of the Classes of Certificates.

The interaction of the foregoing factors may have different effects on the Senior Certificates and the Subordinated Certificates and the effects on any Class may vary at different times during the life of such Class. Accordingly, no assurance can be given as to the weighted average life of any Class of Certificates. Further, to the extent the prices of the Certificates represent discounts or premiums to their respective original Class Principal Amounts, variability in the weighted average lives of such Classes of Certificates will result in variability in the related yields to maturity. For an example of how the weighted average lives of the Classes of Certificates may be affected at various constant Prepayment Assumptions, see the Decrement Tables below.

Decrement Tables

The following tables indicate the percentages of the initial Class Principal Amounts of the Classes of Certificates that would be outstanding after each of the dates shown at various constant Prepayment Assumptions and the corresponding weighted average lives of such Classes. The tables have been prepared on the basis of the Structuring Assumptions. It is not likely that (i) all of the Mortgage Loans will have the characteristics assumed, (ii) all of the Mortgage Loans will prepay at the constant Prepayment Assumptions specified in the tables or at any constant Prepayment Assumption or (iii) all of the Mortgage Loans will prepay at the same rate. Moreover, the diverse remaining terms to maturity of the Mortgage Loans could produce slower or faster principal payments than indicated in the tables at the specified constant Prepayment Assumptions, even if the weighted average remaining term to maturity of the Mortgage Loans is consistent with the remaining terms to maturity of the Mortgage Loans specified in the Structuring Assumptions.

PERCENT OF INITIAL CLASS PRINCIPAL AMOUNTS OUTSTANDING

[DECREMENT TABLES]

Optional Purchase of the Mortgage Loans

On the Initial Purchase Date, the [Servicer] will have the option to purchase the Mortgage Loans, any REO Property and any other property remaining in the Trust Fund for the Purchase Price. If such option is exercised, the Trust Fund will be terminated. [If the [Servicer] fails to exercise such option on the Initial Purchase Date, the applicable Certificate Interest Rate of each class of Offered Certificates will be increased as described under “Summary of Terms — The Certificates — Distributions on the Certificates — Interest Distributions” and the Certificate Interest Rate of the Class [___] Certificates will be increased as described in the definition of “Class [__] Certificate Interest Rate” in “Annex A — Defined Terms.”]

Controlling Class Under the Pooling and Servicing Agreement

For the purposes described in the prospectus under the headings “The Pooling and Servicing Agreement — Modification of Pooling and Servicing Agreement,” “— Events of Default” and “Rights Upon Event of Default,” the “Controlling Class” shall be the Class A-1 Certificateholders or, if the Class A-1 Certificates are no longer outstanding, the Class B-1 Certificateholders.

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Credit Enhancement

Credit enhancement for the Senior Certificates will be provided by the Subordinated Certificates, by the Investor Certificate and by the Certificate Insurance Policy (as defined herein). Credit enhancement for the Subordinated Certificates will be provided by the Investor Certificate.

Subordination 

The rights of holders of the Subordinated Certificates and the Investor Certificate to receive payments with respect to the Mortgage Loans will be subordinated to such rights of the holders of the Senior Certificates and the rights of the holders of the Investor Certificate will be subordinated to such rights of the holders of the Subordinated Certificates, in each case only to the extent described herein.

The subordination of the Subordinated Certificates and the Investor Certificate to the Senior Certificates and the further subordination of the Investor Certificate to the Subordinated Certificates are each intended to increase the likelihood of timely receipt by the holders of Certificates with higher relative payment priority of the maximum amount to which they are entitled on any Distribution Date and to provide such holders protection against losses resulting from defaults on Mortgage Loans to the extent described herein. However, the amount of protection afforded the Subordinated Certificateholders by subordination of the Investor Certificate may be exhausted and Shortfalls in payments on the Subordinated Certificates could result. Any losses realized on the Mortgage Loans in excess of the protection afforded by the Investor Certificate will result in losses on the Subordinated Certificates.

The Certificate Insurance Policy

[description of certificate insurance policy]

The Insurer

[description of insurer]

[Third party providers of credit support for 10% or more of the pool assets to be provided as applicable.]

[Other forms of credit enhancement to be identified and described as applicable for each transaction.]

[Information regarding significant credit enhancement providers, including financial information of each such credit enhancement provider as required by Item 1114(b), to be provided as applicable.]

[Information regarding any entity or group of affiliated entities providing derivative instruments, including financial information of each derivative instrument provider as required by Item 1115(a) and (b), to be provided as applicable.]

The Issuing Entity Administrator

[___________________]  will act as Issuing Entity Administrator for so long as it is also the Master Servicer.  The Issuing Entity Administrator will act as paying agent and Certificate registrar and will be responsible for preparing certain investor reports, including the monthly distribution date statement to Certificateholders and the monthly Distribution Date statement to the Residual Holder, providing all customary tax reports to Certificateholders related to their investment, providing monthly calculations to the Certificate trustee regarding payments to Certificateholders regarding payments to the Residual Holder.  The Issuing Entity Administrator will be compensated by the Master Servicer for its services.  The Issuing Entity Administrator will be entitled to reimbursement from the Trust for certain expenses prior to payment of any amounts to Securityholders.  The office of the Issuing Entity Administrator for purposes of presentation of the Certificates for transfer and exchange and final payment is located at [______________________], or any other address that the Issuing Entity Administrator may designate from time to time by notice to the Certificateholders, the Depositor, the Certificate trustee and the Servicer.

[Disclosure regarding the Issuing Entity Administrator’s experience serving as such in the securitization of similar asset types to be provided.]

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The Issuing Entity Administrator may resign at any time, in which event the Issuing Entity will be obligated to appoint a successor Issuing Entity Administrator.  The Issuing Entity may also remove the Issuing Entity Administrator if the Issuing Entity Administrator ceases to be eligible to continue as such under the Pooling and Servicing Agreement or if the Issuing Entity Administrator becomes incapable of acting, bankrupt, insolvent or if a receiver takes charge of the Issuing Entity Administrator or its property.  Upon such resignation or removal of the Issuing Entity Administrator, the Issuing Entity will be entitled to appoint a successor Issuing Entity Administrator.  Any resignation or removal of the Issuing Entity Administrator and appointment of a successor Issuing Entity Administrator will not become effective until acceptance of the appointment by the successor Issuing Entity Administrator.  If at any time [___________] resigns, or transfers or assigns its rights and obligations, or is removed as Master Servicer, then at such time, [__________] will resign as Issuing Entity Administrator.

[Disclosure regarding the Issuing Entity Administrator’s experience serving as an issuing entity administrator in the securitization of similar asset types to be provided for each transaction.]

The Trustee

[___________________] will be the Trustee under the Pooling and Servicing Agreement.  The Trustee’s on going fees for its services will be paid by the Master Servicer.  The Trustee will be entitled to reimbursement from the Trust for expenses and certain other amounts prior to payment of any amounts to Certificateholders.  The Trustee’s Corporate Trust Office is located at [___________________], or any other address that the Trustee may designate from time to time by notice to the Certificateholders, the Depositor, the Issuing Entity Administrator, the Master Servicer and the Servicer.

[Disclosure regarding the Trustee’s experience serving as a trustee or certificate trustee in the securitization of similar asset types to be provided for each transaction.]

The Trustee’s functions, duties and responsibilities are described under [“The Agreements — The Trustee]” in the prospectus. As compensation for its services, the Trustee will be paid [________________], as set forth under “Fees and Expenses of the Issuing Entity” below.

The Issuing Entity 

On the closing date, and until the termination of the issuing entity pursuant to the pooling and servicing agreement, [Sequoia Mortgage Loan Trust [______________]] (the “issuing entity”) will be a [statutory trust formed under the laws of the State of Delaware] [or] [common law trust formed under the laws of the State of New York]. The issuing entity will be created under the pooling and servicing agreement by the depositor for the sole purpose of issuing the certificates and the investor certificate and its assets will consist of the trust fund.

On the closing date, the assets included in the trust fund will be the only assets of the issuing entity. The issuing entity will not have any liabilities as of the closing date, other than as provided in the pooling and servicing agreement. The fiscal year end of the issuing entity will be December 31 of each year.

The issuing entity will not have any employees, officers or directors. The certificate trustee, the depositor, the master servicer, the issuing entity administrator, the servicer and each custodian will act on behalf of the issuing entity, and may only perform those actions on behalf of the issuing entity that are specified in the pooling and servicing agreement, the servicing agreement or the custodial agreements, as set forth in this prospectus supplement.

The Custodian

[____________] will be the Custodian under the Custodial Agreement.  The Custodian’s on going fees for its services will be paid by the Master Servicer.  The Custodian will be entitled to reimbursement from the Trust for expenses and certain other amounts prior to payment of any amounts to Certificateholders.

[Disclosure regarding the Custodian’s experience serving as a custodian in the securitization of similar asset types to be provided for each transaction.]

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FEES AND EXPENSES OF THE ISSUING ENTITY

In consideration of their duties on behalf of the trust fund, the servicer, the master servicer, the issuing entity administrator, the certificate trustee, the custodian(s) will receive from the assets of the issuing entity certain fees as set forth in the following table:

Fee Payable to:	Frequency of Payment:	Amount of Fee:	How and When Fee Is Payable:
Servicer	[Monthly]	A monthly fee paid to the servicer, from amounts that would otherwise be distributed to certificateholders in respect of interest, calculated on the outstanding principal balance of each mortgage loan, at the applicable servicing fee rate, plus, all income earned on amounts on deposit in the custodial account.	[Withdrawn from the custodial account in respect of each mortgage loan before distribution of any amounts to certificateholders.]
Master Servicer	[Monthly]	All investment earnings on amounts on deposit in the certificate distribution account.	[Retained by the master servicer from the certificate distribution account before distribution of any amounts to certificateholders.]
Issuing Entity Administrator	[Monthly]	A monthly fee paid to the issuing entity administrator, from the master servicing fee.	[Paid by the master servicer from the master servicing fee.]
Trustee	[Monthly]	A fixed annual fee of $[__________].	[Paid by the master servicer from the master servicing fee pursuant to a separate agreement between the trustee and the master servicer.]
Custodian(s)	[Monthly]	A monthly fee paid to each custodian, from the master servicing fee.	[Paid by the master servicer from the master servicing fee.]

The custodial fees set forth in the table above may not be increased without amendment of the related custodial agreement. The servicing fees set forth in the table above may not be increased without amendment of the servicing agreement as described under “ — Servicing — Amendment of the Servicing Agreements” above. None of the other fees set forth in the table above may be changed without amendment of the pooling and servicing agreement as described under “The Agreements — Certain Matters Under the Pooling and Servicing Agreement — Amendment of the Pooling and Servicing Agreement” above.

[Expenses of the servicer, the master servicer, the issuing entity administrator, the certificate trustee and the custodian(s) will be reimbursed before distributions are made on the certificates.]

[May vary in accordance with the structure of the transaction.]

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MATERIAL LEGAL PROCEEDINGS

At the date of this prospectus supplement, other than litigation in the ordinary course of business, such as litigation involving foreclosures or other exercise of its rights as a creditor, and other than as described below, there were no material pending legal proceedings to which any of the sponsor, the seller, the depositor or the issuing entity was a party or of which any of their property was subject, and, other than as described below, the depositor is not aware of any material pending legal proceedings known to be contemplated by governmental authorities against the sponsor, the seller, the depositor or the issuing entity.

On December 23, 2009, the Federal Home Loan Bank of Seattle (the “FHLB-Seattle”) filed a claim in Superior Court for the State of Washington (case number 09-2-46348-4 SEA) against the depositor, Redwood Trust, Inc., Morgan Stanley & Co., and Morgan Stanley Capital I, Inc. (collectively, the “FHLB-Seattle Defendants”). The FHLB-Seattle alleges claims under the Securities Act of Washington (Section 21.20.005, et seq.) and seeks to rescind the purchase of a mortgage pass-through certificate (or, residential mortgage backed securities, “RMBS”) issued as part of the Sequoia Mortgage Trust 2005-4 (“SEMT 2005-4”) securitization transaction and purchased by the FHLB-Seattle. The FHLB-Seattle seeks to collect interest on the original purchase price at the statutory interest rate of 8% per annum from the date of original purchase (net of interest received), as well as attorneys’ fees and costs. On June 10, 2010, the FHLB-Seattle filed an amended complaint. Subsequently, on October 18, 2010, the FHLB-Seattle Defendants filed motions to dismiss the FHLB-Seattle’s complaint. Redwood Trust, Inc. and the depositor additionally moved to dismiss the complaint for lack of personal jurisdiction. The FHLB-Seattle alleges that the FHLB-Seattle Defendants’ offering materials for the SEMT 2005-4 RMBS contained materially untrue statements and omitted material facts about the SEMT 2005-4 RMBS and the credit quality of the mortgage loans that backed the SEMT 2005-4 RMBS. Among other things, the FHLB-Seattle alleges that the FHLB-Seattle Defendants made untrue statements or omissions regarding (1) the loan-to-value ratios of the mortgage loans that backed the SEMT 2005-4 RMBS and the appraisals of the properties that secured them, (2) the occupancy status of those properties, (3) the underwriting standards of the originators of the mortgage loans that backed the SEMT 2005-4 RMBS, and (4) the ratings assigned to the SEMT 2005-4 RMBS. In a series of rulings issued between June 23, 2011 and August 15, 2011, the Washington State Superior Court dismissed the allegations relating to occupancy status and denied other grounds for dismissal. On July 19, 2011, the Court granted Redwood Trust, Inc. and the depositor’s motion to dismiss for lack of personal jurisdiction. Redwood Trust, Inc. and the depositor do not know whether the FHLB-Seattle will appeal or otherwise contest the dismissal, or file a claim in another jurisdiction. The SEMT 2005-4 RMBS that is the subject of the FHLB-Seattle’s claim was issued with an original principal amount of approximately $133 million and, as of December 31, 2011, had a remaining outstanding principal balance of approximately $28.3 million. The depositor and Redwood Trust, Inc. believe that the claims against them in this matter are without merit and intend to defend the action vigorously. On July 19, 2011, the Court granted Redwood Trust, Inc. and the depositor’s motion to dismiss for lack of personal jurisdiction. The FHLB-Seattle’s claims against the underwriters of this RMBS were not dismissed for lack of personal jurisdiction. Redwood Trust, Inc. and the depositor do not know whether FHLB-Seattle will appeal or otherwise contest the dismissal, or file a claim in another jurisdiction.

On August 18, 2010, the depositor received service of process with respect to a case filed on July 15, 2010 in Superior Court for the State of California in San Francisco (case number CGC-10-501610) by The Charles Schwab Corporation (“Schwab”). In the claim, Schwab is suing the depositor and 26 other named defendants (collectively, the “Schwab Defendants”) in relation to RMBS sold or issued by the Schwab Defendants. With respect to the depositor, Schwab alleges a cause of action of negligent misrepresentation under California state law and seeks unspecified damages and attorneys’ fees and costs with respect to a RMBS issued as part of the SEMT 2005-4 securitization transaction (which is the same securitization transaction at issue in the litigation initiated by the FHLB-Seattle described in the preceding paragraph). Among other things, Schwab alleges that the offering materials for the SEMT 2005-4 RMBS contained materially untrue statements or omissions about the SEMT 2005-4 RMBS and the loans securitized in this securitization transaction, including untrue statements or omissions regarding (1) the loan-to-value ratios of the mortgage loans that backed the SEMT 2005-4 RMBS and the appraisals of the properties that secured them, (2) the occupancy status of those properties, (3) the underwriting standards of the originators of the mortgage loans that backed the SEMT 2005-4 RMBS, and (4) the ratings assigned to the SEMT 2005-4 RMBS. On September 22, 2011, the Schwab Defendants moved to dismiss the complaint, which motions are now pending. The RMBS that is the subject of Schwab’s cause of action was issued with an original principal amount of approximately $14.8 million and, as of December 31, 2011, had a remaining outstanding principal balance of approximately $3.1 million. The depositor believes that the claims against it in this matter is without merit and intends to defend the action vigorously.

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On October 15, 2010, the Federal Home Loan Bank of Chicago (the “FHLB-Chicago”) filed a claim in the Circuit Court of Cook County, Illinois (case number 10-CH-45033) against the depositor and more than 45 other named defendants (collectively, the “FHLB-Chicago Defendants”) in relation to RMBS sold or issued by the FHLB-Chicago Defendants or by entities controlled by the FHLB-Chicago Defendants. In an amended complaint filed on March 16, 2011, FHLB-Chicago added as defendants Redwood Trust, Inc. and another one of its subsidiaries, RWT Holdings, Inc. With respect to Redwood Trust, Inc. and the depositor, the FHLB-Chicago alleges that the offering materials for two RMBS issued as part of the Sequoia Mortgage Trust 2006-1 (“SEMT 2006-1”) securitization transaction contained untrue and misleading statements and material representations in violation of Illinois Securities Law (815 ILCS Sections 5/12(F)-(H)) and North Carolina Securities Law N.C.G.S.A. §78A-8(2) & §78A-56(a)) and alleges claims of negligent misrepresentations under Illinois common law. On some of the causes of action, the FHLB-Chicago seeks to rescind the purchase of these RMBS and to collect interest on the original purchase price at the statutory interest rate of 10% per annum from the date of original purchase (net of interest received). On one cause of action, the FHLB-Chicago seeks unspecified damages. The FHLB-Chicago also seeks attorneys’ fees and costs. Among other things, the FHLB-Chicago alleges that the offering materials for the SEMT 2006-1 RMBS contained materially untrue statements or omissions regarding the SEMT 2006-1 RMBS and the loans securitized in this securitization transaction, including untrue statements or omissions regarding (1) the loan-to-value ratios the mortgage loans that backed the SEMT 2006-1 RMBS and the appraisals of the properties that secured them, (2) the occupancy status of those properties, (3) the underwriting standards of the originators of the mortgage loans that backed the SEMT 2006-1 RMBS, (4) the ratings assigned to the SEMT 2006-1 RMBS, and (5) the due diligence performed on the mortgage loans that backed the SEMT 2006-1 RMBS. The first of these two SEMT 2006-1 RMBS was issued with an original principal amount of approximately $105 million and, as of December 31, 2011, had a remaining outstanding principal balance of approximately $42.1 million. The second of these two SEMT 2006-1 RMBS was issued with an original principal amount of approximately $379 million and, as of December 31, 2011, had a remaining outstanding principal balance of approximately $151.7 million. On March 27, 2011, the FHLB-Chicago Defendants moved to dismiss the amended complaint, which motions are now pending. Redwood Trust, Inc, RWT Holdings, Inc. and the depositor believe that the claims against them in this matter are without merit and intend to defend the action vigorously.

The business of the sponsor, the depositor, the seller and their affiliates has included, and continues to include, activities relating to the acquisition and securitization of residential mortgage loans. In addition, the business of the sponsor has, in the past, included activities relating to the acquisition and securitization of debt obligations and other assets through the issuance of collateralized debt obligations (commonly referred to as CDO transactions). Because of their involvement in the securitization and CDO businesses, the sponsor, the depositor, the seller and their affiliates could become the subject of litigation relating to these businesses, including additional litigation of the type described above, and could also become the subject of governmental investigations, enforcement actions, or lawsuits and governmental authorities could allege that these entities violated applicable law or regulation in the conduct of their business.

In fact, the sponsor and its affiliates have received, and responded to, information requests and subpoenas from two governmental authorities (one by the SEC relating to the sponsor’s CDO business and one by the National Credit Union Administration relating to a residential mortgage securitization conducted by the sponsor and the depositor). It is possible that the sponsor, the depositor, the seller or their affiliates might not be successful in defending or responding to any litigation, governmental investigation or related action and any losses incurred as a result of the resolution of any such action or investigation could have a material adverse effect on the sponsor, the depositor, the seller or their affiliates. In any case, regardless of the merits of any allegation or legal action that may be brought against the sponsor, the depositor, the seller or their affiliates, or of their success in defending against such allegations or legal actions, the costs of defending against any such allegation or legal action may be significant or material and could have a material adverse effect on the sponsor, the depositor, the seller or their affiliates.

THE SPONSOR AND THE SELLER

Sponsor General. RWT Holdings, Inc. (“RWT Holdings” or the “Sponsor”), is a Delaware corporation and wholly-owned subsidiary of Redwood Trust, Inc. and is headquartered in Mill Valley, California. RWT Holdings has acquired residential mortgage loans, directly or indirectly, from the originators since it was organized in February 1998. RWT Holdings been active as a sponsor in the securitization market since 2002. As a sponsor, RWT Holdings acquires, directly or indirectly through its subsidiaries, residential mortgage loans in the secondary mortgage market and initiates the securitization of the loans it acquires by transferring the mortgage loans to the depositor, which loans will ultimately be transferred to the issuing entity for the related securitization.

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As of [_____________, 201_], RWT Holdings has sponsored the securitization of approximately $[____] billion of residential mortgage loans ($[_______] in 200[_], $[_______] in 200[_], $[______] in 200[_], $[_______] in 200[_], $[______] in 200[_], $[______] in 201[_], $[____] in 201[_] and $[____] in 201[_]). RWT Holdings buys residential mortgage loans under several loan purchase agreements from mortgage loan originators or sellers nationwide that meet its seller/servicer eligibility requirements. We refer you to “Loan Program—Qualifications of Sellers” in the prospectus for a general description of the characteristics used to determine eligibility of collateral sellers. Prior to acquiring the mortgage loans, RWT Holdings conducts a review of the related mortgage loan seller and of the mortgage loans. RWT Holdings has developed a quality control program to monitor the quality of loan underwriting at the time of acquisition and on an ongoing basis. All loans purchased will be subject to this quality control program. RWT Holdings in certain cases submits a sample of mortgage loans to a third party nationally recognized underwriting review for a compliance check of underwriting and review of income, asset and appraisal information. None of the Sponsor’s prior securitizations have defaulted and RWT Holdings has not experienced an early amortization triggering event in any of its prior securitizations.

RWT Holdings acquires, directly or indirectly through its subsidiaries, mortgage loans secured by first and second liens on one- to four- family residential properties. As a sponsor, RWT Holdings initiates their securitization by transferring the mortgage loans to the depositor, which loans will ultimately be transferred to the issuing entity for the related securitization. RWT Holdings works in coordination with the underwriters and rating agencies in structuring each securitization transaction. RWT Holdings does not currently service mortgage loans but rather contracts with third party servicers for servicing the mortgage loans that it acquires. Third party servicers are assessed based upon the servicing rating and the credit quality of the servicing institution, as well as for their systems and reporting capabilities, review of collection procedures and confirmation of servicers’ ability to provide detailed reporting on the performance of the securitization pool.

Sponsor’s Pre-Offering Review of the Mortgage Loans.  The Sponsor conducted a review of the mortgage loans included in the mortgage pool for the purpose of providing reasonable assurance that the disclosure regarding the mortgage pool in this prospectus supplement is accurate in all material respects. [In conducting the review, the Sponsor engaged third parties to assist it with certain elements of the review.] The review conducted by the Sponsor[, including the portions of the review conducted with the assistance of the third parties,] is referred to herein as the “Sponsor’s Pre-Offering Review.” The Sponsor determines the nature, extent and timing of the Sponsor’s Pre-Offering Review and the level of assistance provided by any third party. The Sponsor does not attribute any of the findings and conclusions of the Sponsor’s Pre-Offering Review to any of the third parties. The results of the review prepared by the third parties engaged by the Sponsor will generally be shared with the underwriters.

[……………..]

Rule 15Ga-1 Repurchases. Information concerning all assets securitized by the Sponsor that were the subject of a demand to repurchase or replace for breach of the representation and warranties is set forth in Annex A attached to this prospectus supplement in a table under the heading “15Ga-1 Repurchases.” The most recent Form ABS-15G filed by the Sponsor, as the securitizer (CIK: 0001530239), was filed on ________, 201__, covers the period January 1, 2011 to ________ __, 201_) and is available online at http://www.sec.gov.

Seller. Redwood Residential Acquisition Corporation (“RRAC” or the “Seller”), is a Delaware corporation and wholly owned subsidiary of RWT Holdings and Redwood Trust, Inc., headquartered in Mill Valley, California. Descriptions of, and references to, RWT Holdings’ acquisition of residential mortgage loans include the acquisition of such loans by RRAC. RRAC was organized in 2009 and commenced its business of acquiring residential mortgage loans for securitization in July 2010. RRAC is licensed to acquire residential mortgage loans and related mortgage servicing rights in states where such a license is required. RRAC does not originate or service loans, is not a seller/servicer approved by Fannie Mae or Freddie Mac, is not a mortgagee approved by the FHA, and is not an insured depository institution. On the closing date for each series of securities where RRAC is acting as seller, RRAC will sell all of its interest in the related mortgage loans to the depositor.  RWT Holdings and RRAC work in coordination with the underwriters and rating agencies in structuring each securitization transaction.  RWT Holdings and RRAC do not currently service mortgage loans but rather contract with third-party servicers for servicing the mortgage loans that they acquire.  Third-party servicers are assessed based upon the servicing rating and credit quality of the servicing institution, as well as for their systems and reporting capabilities, review of collection procedures and confirmation of servicers’ ability to provide detailed reporting on the performance of the securitization pool.

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THE DEPOSITOR

[Sequoia Mortgage Funding Corporation] [or] [Sequoia Residential Funding, Inc.], a Delaware corporation and indirect wholly-owned subsidiary of Redwood Trust, Inc., was organized in September 1999 and is headquartered in Mill Valley, California. The depositor has been engaged since the end of 2001 in the securitization of mortgage loans of the types described in the accompanying prospectus.  Since 2002, Sequoia Residential Funding, Inc. has been the depositor on 30 securitization deals that have issued approximately $[____] billion of residential mortgage loans ($[_______] in 200[_], $[_______] in 200[_], $[______] in 200[_], $[_______] in 200[_], $[______] in 200[_], $[______] in 201[_], $[____] in 201[_] and $[____] in 201[_]) worth of residential mortgage-backed securities. 

The certificate of incorporation of the depositor limits its activities to those necessary or convenient to carry out its securitization activities. The depositor will have limited obligations with respect to a series of securities. The depositor will obtain the mortgage loans from the sponsor/seller and on the closing date will assign all of its interest in the mortgage loans to the trustee for the benefit of certificateholders. In addition, after the issuance of a series of securities, the depositor will have certain obligations with respect to such series, such as the repurchase of mortgage loans as to which there is defective or incomplete documentation or a breach of a representation or warranty, and may have certain approval or consent rights as described in this prospectus supplement.

AFFILIATIONS AND RELATED TRANSACTIONS

[Whether, and how, the Sponsor, Depositor and/or Issuing Entity is an affiliate of any of the following parties as well as, to the extent known and material, whether, and how, any of the following parties are affiliates of any of the other following parties, will be described, if applicable: any Servicer or any other entity involved in the servicing function, including the Master Servicer and the Issuing Entity Administrator; the Certificate Trustee; any Originator; any significant obligor contemplated by Item 1112 of Regulation AB; any enhancement or support provider contemplated by Items 1114 or 1115 of Regulation AB; and any other material party related to the Offered Certificates and contemplated by Item 1100(d)(1) of Regulation AB.]

[The general character of any business relationship or arrangement that is entered into outside the ordinary course of business or on terms other than would be obtained in an arm’s length transaction with an unrelated third party, apart from the establishment of the Trust and the issuance of the Certificates, between any of the parties listed in the preceding paragraph, or any affiliates of such parties, that currently exists or that existed during the past two years and that is material to an investor’s understanding of the Certificates, will be described, if applicable.]

[To the extent material, any specific relationships involving or relating to the Offered Certificates or the Mortgage Pool, including the material terms and approximate dollar amount involved, between or among any of the parties listed in the first paragraph of this section, or any affiliates of such parties, that currently exists or that existed during the past two years, will be described, if applicable.]

THE ORIGINATOR

[_______________________] originated the mortgage loans, directly or through its correspondents. [All Originator(s) of 10% or more of the pool assets to be identified.]

[________________ originated 20% or more of the pool assets.] [Description of the Originator(s)’ [that originated 20% or more of the pool assets] origination program and prior experience to be provided as applicable.]

[Identify in Annex A by named Originator (and in the aggregate for all Originators of less than 10% of pool assets): Number and aggregate principal amount of “exception loans” (to be defined in this section). Also, insert narrative summary disclosure of the characteristics of the exception loans and general disclosure of Originator’s underwriting guidelines and exceptions allowed.]

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THE MASTER SERVICER AND THE SERVICER

Master Servicer

[____________________] is a [_______________] with executive offices located at [________________] [and master servicing offices located at [_________________]].  The Master Servicer is engaged in the business of [master servicing single-family residential mortgage loans secured by properties located in all 50 states and the District of Columbia].

The Servicer or the Subservicer will directly service the Mortgage Loans under the supervision of the Master Servicer.  The Master Servicer, however, will not be ultimately responsible for the servicing of the Mortgage Loans except to the extent described under “Mortgage Loan Servicing” below.

Servicer

[As applicable, provide updated information with respect to (i) whether any prior securitizations of the same asset type involving the Servicer or Subservicer have defaulted or experienced an early amortization or other performance triggering event because of servicing or (ii) whether there has been previous disclosure of material noncompliance with servicing criteria with respect to other securitizations involving the Servicer or Subservicer.] [To the extent that there is a material risk that the Servicer’s or Subservicer’s financial condition could have a material impact on pool performance or performance of the securities, information regarding the Servicer’s or Subservicer’s, as applicable, financial condition will be included here.]

[Insert description of all affiliated and unaffiliated Servicer[s] or Subservicer[s] that service 10% or more of the pool assets, or of any other material servicer identified]

[Insert the following information with respect to any servicer or subservicer:  (i) how long the servicer/subservicer has been servicing assets in general and specifically the assets of the type included in the current transaction, (ii) material changes to the servicer’s/subservicer’s policies and procedures in servicing assets of the same type over the past three years, (iii) to the extent material, information regarding the size, composition and growth of the servicer’s/subservicer’s portfolio of serviced assets of the type to be securitized and information on factors related to the servicer/subservicer that may be material to an analysis of the servicing of the assets or the securities, as applicable, (iv) whether any prior securitizations of the same asset type involving the servicer/subservicer have defaulted or experienced an early amortization or other performance triggering event because of servicing, (v) the extent of outsourcing the servicer/subservicer utilizes or (vi) whether there has been previous disclosure of material noncompliance with servicing criteria with respect to other securitizations involving the servicer/subservicer.]  [To the extent that there is a material risk that the Servicer’s or Subservicer’s financial condition could have a material impact on pool performance or performance of the securities, information regarding the Servicer’s or Subservicer’s, as applicable, financial condition will be included here.]

Delinquency and Foreclosure Experience. 

[To be inserted for each Servicer as applicable.]

[The following tables set forth the delinquency and foreclosure experience of first and second lien adjustable rate residential mortgage loans originated by and serviced by [Servicer] on behalf of securitization trusts and  third parties for whom [Servicer] is servicing similar mortgage loan products, as of the certain dates indicated, each date having a separate table of data.  There can be no assurance, and no representation is made, that the delinquency and foreclosure experience with respect to the Mortgage Loans will be similar to that reflected in the tables below, nor is any representation made as to the rate at which losses may be experienced on liquidation of defaulted Mortgage Loans.  In addition, because the delinquency and foreclosure experience of the mortgage loans in the tables below only reflects such experience as of the end of the previous [      ] calendar quarters, such data may not be reflective of the delinquency and foreclosure experience of the mortgage loans to be expected over an extended period of time.  Accordingly, the information should not be considered to reflect the credit quality of the Mortgage Loans, or as a basis for assessing the likelihood, amount or severity of losses on the Mortgage Loans.

The actual loss and delinquency experience on the Mortgage Loans will depend, among other things, upon the value of the real estate securing such Mortgage Loans, interest rates, economic conditions and the ability of borrowers to make required payments.]

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Delinquencies and Foreclosures⁽¹⁾

	As of [____________________________]
	Number of Loans	Principal Balance		Percent by Principal Balance		Percent by Number of Loans
Current Loans	[     ]	$	[     ]	[     ]	%	[     ]	%
Period of Delinquency(2)
30 to 59 days	[     ]		[     ]	[     ]	%	[     ]	%
60 to 89 days	[     ]		[     ]	[     ]	%	[     ]	%
90 days or more	[     ]		[     ]	[     ]	%	[     ]	%
Foreclosures/ Bankruptcies(3)	[     ]		[     ]	[     ]	%	[     ]	%
Real Estate Owned	[     ]		[     ]	[     ]	%	[     ]	%
Total Portfolio	[     ]		[     ]	[     ]	%	[     ]	%

	As of [____________________________]
	Number of Loans	Principal Balance		Percent by Principal Balance		Percent by Number of Loans
Current Loans	[     ]	$	[     ]	[     ]	%	[     ]	%
Period of Delinquency(2)
30 to 59 days	[     ]		[     ]	[     ]	%	[     ]	%
60 to 89 days	[     ]		[     ]	[     ]	%	[     ]	%
90 days or more	[     ]		[     ]	[     ]	%	[     ]	%
Foreclosures/ Bankruptcies(3)	[     ]		[     ]	[     ]	%	[     ]	%
Real Estate Owned	[     ]		[     ]	[     ]	%	[     ]	%
Total Portfolio	[     ]		[     ]	[     ]	%	[     ]	%

	As of [____________________________]
	Number of Loans	Principal Balance		Percent by Principal Balance		Percent by Number of Loans
Current Loans	[     ]	$	[     ]	[     ]	%	[     ]	%
Period of Delinquency(2)
30 to 59 days	[     ]		[     ]	[     ]	%	[     ]	%
60 to 89 days	[     ]		[     ]	[     ]	%	[     ]	%
90 days or more	[     ]		[     ]	[     ]	%	[     ]	%
Foreclosures/ Bankruptcies(3)	[     ]		[     ]	[     ]	%	[     ]	%
Real Estate Owned	[     ]		[     ]	[     ]	%	[     ]	%
Total Portfolio	[     ]		[     ]	[     ]	%	[     ]	%

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	As of [____________________________]
	Number of Loans	Principal Balance		Percent by Principal Balance		Percent by Number of Loans
Current Loans	[     ]	$	[     ]	[     ]	%	[     ]	%
Period of Delinquency(2)
30 to 59 days	[     ]		[     ]	[     ]	%	[     ]	%
60 to 89 days	[     ]		[     ]	[     ]	%	[     ]	%
90 days or more	[     ]		[     ]	[     ]	%	[     ]	%
Foreclosures/ Bankruptcies(3)	[     ]		[     ]	[     ]	%	[     ]	%
Real Estate Owned	[     ]		[     ]	[     ]	%	[     ]	%
Total Portfolio	[     ]		[     ]	[     ]	%	[     ]	%

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	As of [____________________________]
	Number of Loans	Principal Balance		Percent by Principal Balance		Percent by Number of Loans
Current Loans	[     ]	$	[     ]	[     ]	%	[     ]	%
Period of Delinquency(2)
30 to 59 days	[     ]		[     ]	[     ]	%	[     ]	%
60 to 89 days	[     ]		[     ]	[     ]	%	[     ]	%
90 days or more	[     ]		[     ]	[     ]	%	[     ]	%
Foreclosures/ Bankruptcies(3)	[     ]		[     ]	[     ]	%	[     ]	%
Real Estate Owned	[     ]		[     ]	[     ]	%	[     ]	%
Total Portfolio	[     ]		[     ]	[     ]	%	[     ]	%

_____________

(1)       These tables show mortgage loans which were delinquent or for which foreclosure proceedings had been instituted as of the date indicated.

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

(3)       Exclusive of the number of loans and principal balance shown in the period of delinquency.

ADMINISTRATION OF THE ISSUING ENTITY

Servicing and Administrative Responsibilities

The Subservicer, the Servicer, the Master Servicer, the Issuing Entity Administrator, the Certificate Trustee and the Custodian will have the following responsibilities with respect to the Trust:

[Subservicer] [Servicer]. Performing the servicing functions with respect to the Mortgage Loans and the Mortgaged Properties in accordance with the provisions of the Subservicing Agreement, including, but not limited to:

· [collecting monthly remittances of principal and interest on the Mortgage Loans from the related borrowers, depositing such amounts (net of the related servicing fees) in the Servicing Account, and delivering all amounts on deposit in the Servicing Account to the Master Servicer for deposit in the Certificate Distribution Account on the Servicer Remittance Date;

· collecting amounts in respect of taxes and insurance from the related borrowers, depositing such amounts in the related escrow account, and paying such amounts to the related taxing authorities and insurance providers, as applicable;

· making Monthly Advances with respect to delinquent payments of principal and interest on the Mortgage Loans;

· making Servicing Advances in respect of reasonable and customary “out of pocket” costs and expenses;

· providing monthly loan-level reports to the [Servicer] and the Master Servicer;

· maintaining certain insurance policies relating to the Mortgage Loans; and

· initiating foreclosure proceedings.]

We refer you to “Mortgage Loan Servicing” below.

[Servicer]. [Contractually responsible for the servicing of the Mortgage Loans pursuant to the terms of the Pooling and Servicing Agreement.  [Monitors the performance of the Subservicer under the Subservicing Agreement, including but not limited to:

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· verifying that the Subservicer’s reporting and remitting are mathematically accurate and are being performed in accordance with the terms of the Pooling and Servicing Agreement;

· verifying that the Servicing Account reconciliations are being performed according to Uniform Single Attestation Program for Mortgage Bankers guidelines;

· monitoring the Delinquency Rate and identifying any substantial increases or decreases on a monthly basis; and

· performing the servicing functions with respect to Mortgage Loans described under “Subservicer” above in the event that the Subservicer fails to perform such functions.

We refer you to “Mortgage Loan Servicing” below.]

Master Servicer. Performing the master servicing functions in accordance with the provisions of the Pooling and Servicing Agreement, including but not limited to:

· [[monitoring the Servicer’s performance and enforcing the Servicer’s obligations under the Pooling and Servicing Agreement;]

· collecting monthly remittances from or on behalf of the Servicer for deposit in the Certificate Distribution Account on the Servicer Remittance Date and delivering all amounts on deposit in the Certificate Distribution Account to the Paying Agent for deposit in the Certificate Payment Account on the Master Servicer Remittance Date;

· gathering the monthly loan-level reports delivered by or on behalf of the Servicer and providing a comprehensive loan-level report to the Issuing Entity Administrator with respect to the Mortgage Loans;

· upon the occurrence of a Servicer event of default under the Pooling and Servicing Agreement, at its discretion, terminating the Servicer;

· upon the termination of the Servicer under the Pooling and Servicing Agreement, appointing a successor servicer or succeeding as Servicer; and

· upon the Master Servicer’s becoming the successor Servicer and in the event the terminated Servicer failed to make Advances with respect to a Mortgage Loan, making those Advances to the extent provided in the Pooling and Servicing Agreement.]

We refer you to “Mortgage Loan Servicing” below.

Issuing Entity Administrator. Performing the issuing entity administrator functions in accordance with the provisions of the Administration Agreement, the Pooling and Servicing Agreement, the Trust Agreement and the Pooling and Servicing Agreement, including but not limited to:

· [acting as Certificate Registrar and Paying Agent;

· receiving monthly remittances from the Master Servicer for deposit in the Certificate Payment Account;

· distributing all amounts on deposit in the Certificate Payment Account in accordance with the priorities described under “Description of the Certificates—Payments of Interest,” “—Payments of Principal” and “—Credit Enhancement—Application of Monthly Excess Cashflow” on each Distribution Date;

· performing the calculation of accrual of original issue discount and the amortization of premium on the Securities;

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· preparing and making available on its website a payment statement to Securityholders based on information received from the Servicer and the Master Servicer; and

· preparing and filing periodic reports with the Securities and Exchange Commission on behalf of the Trust with respect to the Certificates.]

We refer you to “The Mortgage Loan Purchase Agreement and the Pooling and Servicing Agreement — Administration,” “— Reports to Securityholders” and “The Trust Agreement and the Pooling and Servicing Agreement — Administration” below.

Trustee. Performing the certificate trustee functions in accordance with the provisions of the Pooling and Servicing Agreement, or causing the Issuing Entity Administrator to perform such functions, pursuant to the Administration Agreement, including but not limited to:

· [examining certificates, statements and opinions required to be furnished to it to ensure they are in the form required under the Pooling and Servicing Agreement;

· enforcing the obligations of each of the Master Servicer and the Issuing Entity Administrator under the Pooling and Servicing Agreement, the Pooling and Servicing Agreement and the Administration Agreement, as applicable;

· upon the occurrence of a Master Servicer event of default under the Pooling and Servicing Agreement, at its discretion (or if so directed by the Residual Holder or Certificateholders having more than 50% of the voting rights applicable to each Class of Certificates affected thereby), terminating the Master Servicer; and

· upon such termination of the Master Servicer under the Pooling and Servicing Agreement, appointing a successor Master Servicer or succeeding as Master Servicer.]

We refer you to “The Trust Agreement and the Pooling and Servicing Agreement—Certain Matters Under the Agreements—Duties of the Certificate Trustee” below.

Depositor. Preparing and filing periodic reports with the SEC on behalf of the trust fund with respect to the Certificates.

Custodian. Performing the custodial functions in accordance with the provisions of the Pooling and Servicing Agreement, including but not limited to:

· [holding and maintaining the Mortgage Loan documents related to the Mortgage Loans on behalf of the Certificate Trustee.]

We refer you to “The Agreements—The Custodial Agreement” in the prospectus.

Issuing Entity Accounts

 All amounts in respect of principal and interest received from the borrowers or other recoveries in respect of the Mortgage Loans [and payments received from the Swap Counterparty under the Swap Agreements] will, at all times before payment thereof to the Certificateholders, be invested in the [Servicing Account, the Certificate Distribution Account, [the Swap Payment Account], [the Cap Account] and the Certificate Payment Account, which accounts will be established in the name of the Certificate Trustee, and the Certificate Distribution Account, which account shall be established in the name of the Issuing Entity Administrator]. Funds on deposit in the Issuing Entity Accounts may be invested by the party responsible for such Issuing Entity Account in Eligible Investments. The Issuing Entity Accounts will be established by the applicable parties listed below, and any investment income earned on each Issuing Entity Account will be retained or distributed as follows:

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Issuing Entity Account	Responsible Party:	Application of any Investment Earnings:
Servicing Account	Servicer (or Subservicer on its behalf)	[Any investment earnings (net of any losses realized) will be paid as compensation to the Servicer (or, if the account is maintained by the Subservicer, the Subservicer) and will not be available for payments to Certificateholders.]
Certificate Distribution Account	Master Servicer	[Any investment earnings (net of the Certificate Trustee Fee, the Custodian Fee and any losses realized) will be paid as compensation to the Master Servicer and will not be available for payments to Certificateholders.]
Distribution Account	Issuing Entity Administrator	[Any investment earnings (net of the Certificate Trustee Fee, the Custodian Fee and any losses realized) will be paid as compensation to the Master Servicer, and will not be available for payments to Certificateholders.]
Certificate Distribution Account	Issuing Entity Administrator	[Amounts on deposit in the Certificate Distribution Account will not be invested.]
[Basis Risk Reserve Fund]	[Issuing Entity Administrator]	[Amounts on deposit in the Basis Risk Reserve Fund will not be invested.]
[Swap Payment Account]	[Issuing Entity Administrator]	[Amounts on deposit in the Swap Payment Account will not be invested.]
[Cap Account]	[Issuing Entity Administrator]	[Amounts on deposit in the Swap Payment Account will not be invested.]
[Capitalized Interest Account]	[Issuing Entity Administrator]	[Any investment earnings (net of any losses realized) will be paid to the Depositor and will not be available for payments to Certificateholders.]
[Pre-Funding Account]	[Issuing Entity Administrator]	[Any investment earnings (net of any losses realized) will be paid to the Depositor and will not be available for payments to Certificateholders.]

If funds deposited in the [Servicing Account, the Certificate Distribution Account, the Certificate Payment Account, the Certificate Distribution Account, [the capitalized interest account], [the pre-funding account]] are invested by the responsible party identified in the table above, the amount of any net losses incurred in respect of any such investments will be deposited in the related Issuing Entity Account by such responsible party, or in the case of the Certificate Payment Account, the Master Servicer, out of its own funds, without any right of reimbursement therefor.

Example of Payments 

The following sets forth an example of collection of payments from borrowers on the Mortgage Loans, transfer of amounts among the Issuing Entity Accounts and payments on the Certificates for the Distribution Date in [_____]:

[_____]	Collection Period:	[Payments due during the related Collection Period ([___]  through [____]) from borrowers will be deposited in the Servicing Account as received and will include scheduled principal and interest payments due during the related Collection Period.]
[_____]	Prepayment Period for partial and full prepayments received from Mortgage Loans:	[Partial principal prepayments and principal prepayments in full received by the Servicer during the related Prepayment Period ([____] through [____]) will be deposited into the Servicing Account for remittance to the Master Servicer on the Servicer Remittance Date ([____] [18]).]
[____] [18]	Servicer Remittance Date:	[The Servicer will remit collections and recoveries in respect of the Mortgage Loans to the Master Servicer for deposit into the Certificate Distribution Account on or prior to the [18]th day of each month (or if the [18]th day is not a Business Day, the immediately preceding Business Day).]

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[____] [24]	Master Servicer Remittance Date:	[The Master Servicer will remit to the Paying Agent amounts on deposit in the Certificate Distribution Account for deposit into the Certificate Payment Account, including any Advances made by the Servicer, the Subservicer or the Master Servicer for that Distribution Date, on or before the Master Servicer Remittance Date.]
[____] [24]	Record Date:	[Payments will be made to Certificateholders of record for all classes of Certificates as of the Business Day immediately preceding the related Distribution Date.]
[____] [25]	Distribution Date:	[On the [25]th day of each month (or if the [25]th day is not a Business Day, the next Business Day), the Paying Agent will make payments from amounts on deposit in the Certificate Payment Account to Certificateholders and, to the extent of funds available after all other required payments are made, will deposit into the Certificate Distribution Account any amounts remaining.]

Succeeding months follow the same pattern.

THE AGREEMENTS

General 

The following summary describes certain terms of the pooling and servicing agreement, the mortgage loan purchase and sale agreement, the deposit trust agreement, the servicing agreements and the custodial agreements (collectively, the “agreements”). The summary does not purport to be complete and is subject to, and qualified in its entirety by reference to, all the provisions of the agreements. The following summary supplements, and to the extent inconsistent with, replaces, the description of the general terms and provisions of the agreements under the heading “The Agreements” in the accompanying prospectus.

The Certificates will be issued pursuant to the Pooling and Servicing Agreement.  Certificates in certificated form will be transferable and exchangeable at the Corporate Trust Office of the Issuing Entity Administrator, which will serve as certificate registrar and paying agent.  The Issuing Entity Administrator will provide to a prospective or actual Certificateholder, without charge, on written request, an electronic copy (without exhibits) of the Pooling and Servicing Agreement, the Trust Agreement and the Pooling and Servicing Agreement.  Requests should be addressed to [     ].

Assignment of the Mortgage Loans 

Under the mortgage loan purchase and sale agreement, [RWT Holdings, Inc.], as seller or sponsor, will sell the mortgage loans to the depositor. The seller will make or assign certain representations, warranties and covenants relating to, among other things, certain characteristics of the mortgage loans. Such representations and warranties will include the representations and warranties set forth under “The Agreements-Representations and Warranties” in the prospectus. Subject to the limitations described below, the seller [or originator] will be obligated as described herein to purchase or substitute a similar mortgage loan for any mortgage loan as to which there exists deficient documentation or as to which there has been an uncured breach of any such representation or warranty relating to the characteristics of the mortgage loan that materially and adversely affects the value of such mortgage loan or the interests of the certificateholders in such mortgage loan (a “defective mortgage loan”).

Pursuant to the Pooling and Servicing Agreement, the Issuing Entity on the Closing Date will pledge, transfer, assign, set over and otherwise convey without recourse to the Certificate Trustee in trust for the benefit of the Certificateholders all right, title and interest of the Issuing Entity in and to each Mortgage Loan and all right, title and interest in and to all other assets included in the Collateral, including all principal and interest received on or with respect to the Mortgage Loans, exclusive of principal and interest due on or prior to the cut-off date.

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In connection with such transfer and assignment, the Issuing Entity will deliver or cause to be delivered to the Certificate Trustee, or a custodian for the Certificate Trustee, among other things, the original promissory note (the “Mortgage Note”) (and any modification or amendment thereto) endorsed in blank without recourse, the original instrument creating a first lien on the related Mortgaged Property (the “Mortgage”) with evidence of recording indicated thereon, an assignment in recordable form of the Mortgage, the title policy with respect to the related Mortgaged Property and, if applicable, all recorded intervening assignments of the Mortgage and any riders or modifications to such Mortgage Note and Mortgage (except for any such document not returned from the public recording office, which will be delivered to the Certificate Trustee as soon as the same is available to the Issuing Entity) (collectively, the “Mortgage File”). [Assignments of the Mortgage Loans to the Certificate Trustee (or its nominee) will be recorded in the appropriate public office for real property records, except in states such as California where, in the opinion of counsel, such recording is not required to protect the Certificate Trustee’s interest in the Mortgage Loans against the claim of any subsequent transferee or any successor to or creditor of the Issuing Entity.]

The Certificate Trustee will review each Mortgage File within [_______] days of the Closing Date (or promptly after the Certificate Trustee’s receipt of any document permitted to be delivered after the Closing Date) and if any document in a Mortgage File is found to be missing or defective in a material respect and the Issuing Entity does not cure such defect within [_______] days of notice thereof from the Certificate Trustee (or within such longer period not to exceed [______] days after the Closing Date as provided in the Mortgage Loan Purchase Agreement in the case of missing documents not returned from the public recording office), the seller will be obligated to purchase the related Mortgage Loan. Rather than purchase the Mortgage Loan as provided above, the seller may remove such Mortgage Loan (a “Deleted Mortgage Loan”) from the Collateral and substitute in its place another mortgage loan (a “Replacement Mortgage Loan”). Any Replacement Mortgage Loan generally will, on the date of substitution, among other characteristics set forth in the Mortgage Loan Purchase Agreement, (i) have a principal balance, after deduction of all scheduled payments due in the month of substitution, not in excess of, and not more than [_____] % less than, the Stated Principal Balance of the Deleted Mortgage Loan (the amount of any shortfall to be deposited in the Certificate Account by the seller and held for distribution to the Certificateholders on the related Distribution Date (a “Substitution Adjustment Amount”)), (ii) have a Mortgage Rate not lower than, and not more than [_____]% per annum higher than, that of the Deleted Mortgage Loan, (iii) have a Loan-to-Value Ratio not higher than that of the Deleted Mortgage Loan, (iv) have a remaining term to maturity not greater than (and not more than [___] less than) that of the Deleted Mortgage Loan, and (v) comply with all of the representations and warranties set forth in the Mortgage Loan Purchase Agreement as of the date of substitution. This cure, purchase or substitution obligation constitutes the sole remedy available to Certificateholders or the Certificate Trustee for omission of, or a material defect in, a Mortgage Loan document.

Each transfer of the mortgage loans from the seller to the depositor and from the depositor to the certificate trustee will be intended to be a sale of the mortgage loans and will be reflected as such in the mortgage loan purchase and sale agreement and the pooling and servicing agreement, respectively. However, in the event of insolvency of either the seller or the depositor, a trustee in bankruptcy or a receiver or creditor of the insolvent party could attempt to recharacterize the sale of the mortgage loans by the insolvent party as a financing secured by a pledge of the mortgage loans. In the event that a court were to recharacterize the sale of the mortgage loans by either the seller or the depositor as a financing, each of the depositor, as transferee of the mortgage loans from the seller, and the certificate trustee will have a security interest in the mortgage loans transferred to it. The certificate trustee’s security interest will be perfected by delivery of the mortgage notes to each custodian.

[On a designated subsequent transfer date, subsequent mortgage loans will be assigned by the depositor to the Certificate Trustee, together with all principal and interest received with respect to such subsequent mortgage loans on and after the applicable subsequent cut-off date (other than monthly payments due on that date) in accordance with the procedures set forth at “Description of the Mortgage Pool—Conveyance of Subsequent Mortgage Loans.”  At the time of the transfer of the subsequent mortgage loans, the Mortgage Loan schedule appearing as an exhibit to the Pooling and Servicing Agreement will be amended to reflect the addition of the subsequent mortgage loans to the Trust.]

Mortgage Loan Servicing 

The servicer will service the mortgage loans pursuant to existing servicing agreements, one between the servicer and the seller and another between the servicer and the transferor to the seller (referred to as the “servicing agreement”). The rights of the seller under the servicing agreement will be assigned to the depositor, and the depositor, in turn, will assign such rights to the trustee for the benefit of certificateholders. Any further transfer of servicing to one or more successor servicers will be subject to the conditions set forth in the pooling and servicing agreement and the servicing agreement, as applicable.

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The servicer will have primary responsibility for servicing the mortgage loans, including, but not limited to, all collection, advancing and loan-level reporting obligations, maintenance of custodial and escrow accounts, maintenance of insurance and enforcement of foreclosure proceedings with respect to the mortgage loans and the mortgaged properties, in accordance with the provisions of the servicing agreement.

Under the servicing agreement, the master servicer has the authority to terminate the servicer for certain events of default which indicate that either the servicer is not performing, or is unable to perform, its duties and obligations under the servicing agreement. If the master servicer terminates the servicer, the master servicer will be required to appoint a successor servicer as provided in the pooling and servicing agreement.

We refer you to “The Agreements — Certain Matters Regarding the Servicer and the Depositor” and — Events of Default; Rights Upon Event of Default” in the accompanying prospectus.

The master servicer is responsible for receiving the monthly servicer reports and remittances and for the oversight of the performance of the servicer under the terms of their underlying servicing agreement. In particular, the master servicer independently calculates monthly loan balances based on servicer data, compares its results to servicer loan-level reports and reconciles any discrepancies with the servicer. The master servicer also reviews the servicing of defaulted loans for compliance with the terms of the pooling and servicing agreement. In addition, upon the occurrence of certain servicer events of default under the terms of any underlying servicing agreement, the master servicer may be required to enforce certain remedies on behalf of the trust against such defaulting servicer.

The master servicer will not be ultimately responsible for the performance of the servicing activities by the servicer, except as described under “— Advances” below. In addition, the master servicer will not be responsible for the supervision of the activities of the servicer related to the resolution of defaulted mortgage loans, including collections, modifications, foreclosure and disposition or management of REO property. If the servicer fails to fulfill its obligations under the servicing agreement, the master servicer will be obligated to terminate the servicer and, within 90 days of such termination, appoint a successor servicer that satisfies the eligibility requirements set forth in the servicing agreement.

The servicer generally may not transfer the servicing to a successor servicer without the consent of the certificate trustee and the master servicer. The pooling and servicing agreement requires that, in the case of transfers to a successor servicer, each rating agency confirm in writing that such transfer of servicing will not result in a qualification, withdrawal or downgrade of the then-current ratings of any of the certificates.

Waiver or Modification of Mortgage Loan Terms. [ ]

Custodial Account. Servicing functions to be performed by the servicer under the servicing agreement include collection and remittance of principal and interest payments, administration of mortgage escrow accounts, collection of certain insurance claims and, if necessary, foreclosure. The servicer may contract with subservicers to perform some or all of the servicer’s servicing duties, but the servicer will not thereby be released from its obligations under the servicing agreement. When used herein with respect to servicing obligations, the term servicer includes a subservicer.

Pursuant to the servicing agreement, the servicer will deposit collections on the mortgage loans into the custodial account established by it. The custodial account is required to be kept segregated from operating accounts of the servicer and to meet the eligibility criteria set forth in the servicing agreement. The servicing agreement does not provide for the investment of amounts on deposit in the custodial account. Any interest earned on deposited amounts will be for the benefit of the servicer.

On or before the closing date, the issuing entity administrator, on behalf of the trustee, will establish the certificate distribution account into which the servicer will remit all amounts required to be deposited therein (net of the servicer’s servicing compensation) on the remittance date specified in the servicing agreement. Generally, the servicer will determine the amount of monthly advances for the related Due Period on or before the related Determination Date, and will furnish to the master servicer information with respect to loan level remittance data for such month’s remittance on the reporting date specified in the servicing agreement.

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Prepayment Interest Shortfalls. When a borrower prepays a mortgage loan in full between Due Dates, the borrower is required to pay interest on the amount prepaid only to the date of prepayment and not thereafter. Principal prepayments by borrowers received by the servicer during the related Prepayment Period for a Distribution Date will be distributed to certificateholders on the related Distribution Date. Thus, less than one month’s interest may have been collected on mortgage loans that have been prepaid in full with respect to any Distribution Date. Pursuant to the servicing agreement, either (i) the related servicing fee for any month will be reduced (but not below zero) by the amount of any Prepayment Interest Shortfall or (ii) the servicer will be required to make payments in respect of Prepayment Interest Shortfalls from its own funds with respect to the mortgage loans. The master servicer is obligated to reduce a portion of its master servicing fee for the related Distribution Date to the extent necessary to fund any Prepayment Interest Shortfalls required to be paid but not paid by the servicer. The amount of interest available to be paid to certificateholders will be reduced by any uncompensated Prepayment Interest Shortfalls.

Advances. Subject to the limitations described in the following paragraph, the servicer will be required to advance prior to each Distribution Date, from its own funds, or funds in the custodial account that are not otherwise required to be remitted to the certificate distribution account for such Distribution Date, an amount equal to the scheduled payment of interest at the related mortgage rate (less the applicable servicing fee rate) and scheduled principal payment on each mortgage loan which were due on the related Due Date and which were not received prior to the related Determination Date (any such advance, a “monthly advance”). The master servicer will be obligated to make any required monthly advance if the servicer fails in its obligation to do so, to the extent provided in the pooling and the servicing agreement and the servicing agreement.

Monthly advances are intended to maintain a regular flow of scheduled interest and principal payments on the certificates rather than to guarantee or insure against losses. The servicer is obligated to make monthly advances with respect to delinquent payments of interest and principal on each mortgage loan serviced by it, to the extent that such monthly advances are, in its reasonable judgment, recoverable from future payments and collections or insurance payments or proceeds of liquidation of the related mortgage loans. Any failure by the servicer to make a monthly advance as required under the servicing agreement will constitute a default thereunder, in which case the master servicer will be required, as successor servicer, to make a monthly advance in accordance with the terms of the pooling and servicing agreement; provided, however, that in no event will the master servicer be required to make a monthly advance that is not, in its reasonable judgment, recoverable from future payments and collections or insurance payments or proceeds of liquidation of the related mortgage loans. If the servicer determines on any Determination Date to make a monthly advance, such monthly advance will be included with the payment to certificateholders on the related Distribution Date. Any failure by the master servicer to make a monthly advance as required under the pooling and servicing agreement will constitute a master servicer default thereunder, in which case the trustee or the successor master servicer will be obligated to make such monthly advance.

Servicing Compensation and Payment of Expenses. The servicer will be entitled to receive, from interest actually collected on each mortgage loan serviced by it, a servicing fee (the “servicing fee”) equal to the product of (1) the principal balance of such mortgage loans as of the first day of the related Due Period and (2) a per annum rate (the “servicing fee rate”) equal to (a) in the case of a mortgage loan that has not reached its first adjustment date, 0.25% annually or (2) in the case of a mortgage loan that has reached its first adjustment date, 0.375% annually. The servicer will also be entitled to receive, to the extent provided in the applicable servicing agreement, additional compensation in the form of prepayment premiums and any interest or other income earned on funds it has deposited in the custodial account pending remittance to the master servicer, as well as late charges and certain fees paid by borrowers and, in certain cases, REO management fees.

As compensation for its services, the master servicer will be entitled to retain interest or other income earned on funds it has deposited in the certificate distribution account pending remittance of such funds by the issuing entity administrator to the certificateholders. The amount of the master servicing fee and the servicer’s servicing fee is subject to adjustment with respect to prepaid mortgage loans, as described above under “— Prepayment Interest Shortfalls.”

Evidence as to Compliance. The servicing agreement will require the servicer to deliver to the trustee, on or before the date in each year specified in the servicing agreement, and, if required, file with the SEC as part of a Report on Form 10-K filed on behalf of each trust, the following documents:

·  a report on its assessment of compliance during the preceding calendar year with all applicable servicing criteria set forth in relevant SEC regulations with respect to asset-backed securities transactions taken as a whole involving the servicer that are backed by the same types of assets as those backing the offered securities, as well as similar reports on assessment of compliance received from certain other parties participating in the servicing function as required by relevant SEC regulations;                 

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·  with respect to each assessment report described in the immediately preceding bullet point, a report by a registered public accounting firm that attests to, and reports on, the assessment made by the asserting party, as set forth in relevant SEC regulations; and            

·  a statement of compliance from the servicer, and similar statements from certain other parties involved in servicing the mortgage loans as required by relevant SEC regulations, signed by an authorized officer, to the effect that: (a) a review of the servicer’s activities during the reporting period and of its performance under the applicable servicing agreement has been made under such officer’s supervision; and (b) to the best of such officer’s knowledge, based on such review, the servicer has fulfilled all of its obligations under the servicing agreement in all materials respects throughout the reporting period or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status thereof.                 

Each custodial agreement provides that the related custodian will certify to the depositor, the trustee, the servicer and the master servicer that all information prepared by it and provided to the master servicer, the servicer or the issuing entity administrator relating to the mortgage loans is accurate and complete in all material respects as of the last day of the period covered by that report and that generally the custodian is in compliance with its obligations to report to the master servicer, the servicer and the issuing entity administrator and is in compliance with its obligations under the related custodial agreement. The pooling and servicing agreement will provide that each year the master servicer will certify to the trustee that for the prior calendar year, the master servicer has performed and fulfilled its duties, responsibilities and obligations under the pooling and servicing agreement in all material respects throughout that year, or, if there has been a default in the fulfillment of any such duties, responsibilities or obligations, specifying each such default known to the master servicer and the nature and status thereof, and the master servicer has received from the servicer an annual certificate of compliance and a copy of the servicer’s annual audit report, in each case to the extent required under the servicing agreement, or, if any such certificate or report has not been received by the master servicer, the master servicer is using its best reasonable efforts to obtain such certificate or report.

The pooling and servicing agreement will also provide that each year during which the master servicer directly services any of the mortgage loans, as servicer, a firm of independent accountants will furnish a statement to the trustee to the effect that such firm has examined certain documents and records relating to the servicing of mortgage loans similar to the mortgage loans by the master servicer and that, on the basis of such examination, such firm is of the opinion that the servicing has been conducted in accordance with the terms of the pooling and servicing agreement, except for (1) exceptions as the firm believes to be immaterial and (2) any other exceptions set forth in such statement.

Events of Default. Events of default under the servicing agreement include (i) any failure of the servicer to remit to the collection any required payment which continues unremedied for a specified period after the giving of written notice of such failure to the servicer; (ii) any failure by the servicer to make a monthly advance as required under the servicing agreement, unless cured as specified therein; (iii) any failure by the servicer duly to observe or perform in any material respect any of its other covenants or agreements in the servicing agreement which continues unremedied for a specified period after the giving of written notice of such failure to the servicer; and (iv) certain events of insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceeding and certain actions by or on behalf of the servicer indicating its insolvency, reorganization or inability to pay its obligations.

If the servicer is in default in its obligations under the servicing agreement, the master servicer may, at its option, terminate the defaulting servicer and either appoint a successor servicer in accordance with the servicing agreement and the pooling and servicing agreement or succeed to the responsibilities of the terminated servicer.

In the event of a default by the servicer under its servicing agreement, the master servicer will have the right to remove the servicer and will exercise that right if it considers such removal to be in the best interest of the certificateholders. In the event that the master servicer removes the servicer, the master servicer will, in accordance with the pooling and servicing agreement, act as successor servicer under the servicing agreement or will appoint a successor servicer reasonably acceptable to the depositor and the trustee. In connection with the removal of the servicer, the master servicer will be entitled to be reimbursed from the assets of the issuing entity for all of its reasonable costs associated with the termination of the servicer and the transfer of servicing to a successor servicer.

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Limitation on Liability of the Servicer and Others. The servicing agreement provides that neither the servicer nor any of the officers, employees or agents of the servicer will be under any liability to the trust for any action taken, or for refraining from taking any action, in good faith pursuant to the servicing agreement, or for errors in judgment. The servicing agreement further provides, however, that such provision will not protect the servicer or any such person against any breach of warranties or representations made by the servicer in the servicing agreement, or the failure of the servicer to perform its obligations in compliance with any standard of care set forth in the servicing agreement, or any liability which would otherwise be imposed by reason of any breach of the terms and conditions of the servicing agreement.

Resignation of Servicer. The servicer may not resign from its obligations and duties under the servicing agreement or assign or transfer its rights, duties or obligations except (i) upon a determination that its duties thereunder are no longer permissible under applicable law, (ii) in certain cases, upon the sale of substantially all of its assets or (iii) upon a sale of its servicing rights with respect to the mortgage loans with the prior written consent of the depositor, which consent may not be unreasonably withheld. No such resignation will become effective until the master servicer or a successor servicer approved by it has assumed the servicer’s obligations and duties under the servicing agreement.

Any person into which the servicer may be merged or consolidated, any person resulting from any merger or consolidation which the servicer is a party, any person succeeding to the business of the servicer or any person to whom the servicer assigns or transfers its duties and obligations, will be the successor of the servicer under the related servicing agreement.

Amendment of the Servicing Agreement. The servicing agreement may generally be amended by written agreement between the servicer and the trustee, as acknowledged by the master servicer, without notice to or consent of the certificateholders.

Administration 

The Issuing Entity Administrator or the Depositor will agree, to the extent provided in the Management Agreement, to provide certain notices and to perform certain other administrative obligations required to be performed by the Issuing Entity, the Certificate Trustee under the Management Agreement, the Pooling and Servicing Agreement and the Trust Agreement. [Neither the Issuing Entity Administrator nor the Depositor will receive additional compensation for their services under the Management Agreement.]

Reports to Certificateholders 

On each Distribution Date, the Issuing Entity Administrator will make available on the Issuing Entity Administrator’s website at [____________] a payment statement containing the items set forth under “The Agreements—Reports to Securityholders” in the prospectus, based solely on information received from the Servicer or the Master Servicer.

Voting Rights 

Voting rights under the Deposit Trust Agreement will be allocated as follows:

·  [98]% to the classes of Certificates in proportion to their respective outstanding Certificate Principal Amounts; and            

·  [2]% to the Residual Holder.            

Termination of the Issuing Entity 

The Trust will terminate upon the payment to the holders of all classes of Certificates of all amounts required to be paid to the holders and upon the last to occur of:

·  the final payment or other liquidation, or any related advance, of the last Mortgage Loan; 

·  the disposition of all property acquired in respect of any Mortgage Loan remaining in the Trust; and 

·  exercise by the Residual Holder of its right to purchase the Mortgage Loans and other property of the Trust as described under “Description of the Certificate—Optional Purchase of the Mortgage Loans.” 

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YIELD, PREPAYMENT AND WEIGHTED AVERAGE LIFE

General 

The yields to maturity (or to early termination) of the Offered Certificates will be affected by the rate of principal payments (including prepayments, which may include amounts received by virtue of purchase, condemnation, insurance or foreclosure) on the Mortgage Loans and the application of excess interest to reduce the Class Principal Amounts of the Certificates.  Yields will also be affected by the extent to which Mortgage Loans bearing higher Mortgage Rates prepay at a more rapid rate than Mortgage Loans with lower Mortgage Rates, the amount and timing of borrower delinquencies and defaults resulting in Realized Losses, the purchase price paid by investors for the Offered Certificates, and other factors.

Yields on the Offered Certificates will be affected by the rate of principal payments on the Mortgage Loans.  Principal prepayments may be influenced by a variety of economic, geographic, demographic, social, tax, legal and other factors, including the credit quality of the Mortgage Loans.  In general, if prevailing interest rates fall below the interest rates on the Mortgage Loans, the Mortgage Loans are likely to be subject to a higher rate of prepayments than if prevailing rates remain at or above the interest rates on the Mortgage Loans.  Conversely, if prevailing interest rates rise above the interest rates on the Mortgage Loans, the rate of prepayment would be expected to decrease.  Other factors affecting prepayment of the Mortgage Loans include such factors as changes in borrowers’ housing needs, job transfers, unemployment, borrowers’ net equity in the mortgaged properties, changes in the values of mortgaged properties, mortgage market interest rates and servicing decisions, as well as refinancings resulting from solicitations by mortgage lenders.  [The Mortgage Loans generally have due-on-sale clauses.]

In addition, the rate of principal prepayments may also be influenced by programs offered by the Subservicer and its affiliates or by other lenders.  Many mortgage lenders solicit borrowers to refinance their loans.  [Lender] does not directly solicit borrowers to refinance, but the availability of [Lender]’s “streamline refi” program, which enables qualifying mortgagors to refinance at greatly reduced cost, may influence some borrowers to do so.  These refinancings may increase the rate of prepayment of the Mortgage Loans.

[The Mortgage Loans have Mortgage Rates that provide for a fixed interest rate during an initial period of six months, three years, five years or seven years from the date of the origination and thereafter provide for adjustments to the Mortgage Rates on either a monthly or semi-annual basis.  When a Mortgage Loan begins its adjustable rate period, increases and decreases in the Mortgage Rate will be limited by the Periodic Cap, the Maximum Rate and the Minimum Rate, if any, and will be based on the applicable Index in effect on the applicable date prior to the related Adjustment Date plus the applicable Gross Margin.  The applicable Index may not rise and fall consistently with mortgage interest rates.  As a result, the Mortgage Rates on the Mortgage Loans at any time may not equal the prevailing mortgage interest rates of similar adjustable rate mortgage loans, and accordingly the prepayment rate may be lower or higher than would otherwise be anticipated.]  [To be provided as applicable.]  Some borrowers who prefer the certainty provided by fixed rate mortgage loans may nevertheless obtain adjustable rate mortgage loans at a time when they regard the mortgage interest rates (and, therefore, the payments) on fixed rate mortgage loans as unacceptably high.  These borrowers may be induced to refinance adjustable rate loans when the interest rates and monthly payments on comparable fixed rate mortgage loans decline to levels which these borrowers regard as acceptable, even though such mortgage interest rates and monthly payments may be significantly higher than the current mortgage interest rates and monthly payments on the borrowers’ adjustable rate mortgage loans.  The ability to refinance a Mortgage Loan will depend on a number of factors prevailing at the time refinancing is desired, including, without limitation, real estate values, the borrower’s financial situation, prevailing mortgage interest rates, the borrower’s equity in the related Mortgaged Property, tax laws and prevailing general economic conditions.

[Substantially all of the Mortgage Loans provide for payment of interest at the related Mortgage Rate, but no payment of principal, for a period of ten years following the origination of the related Mortgage Loan.  Following the applicable interest-only period, the monthly payment with respect to these Mortgage Loans will be increased to an amount sufficient to amortize the principal balance of such Mortgage Loan over its remaining term, and to pay interest at the related Mortgage Rate.]  [To be provided as applicable.]  

The rate of principal payments on the Mortgage Loans will also be affected by the amortization schedules of the Mortgage Loans, the rate and timing of prepayments thereon by the borrowers, liquidations of defaulted Mortgage Loans, repurchases of Mortgage Loans due to certain breaches of representations and warranties or defective documentation, and optional purchases of Mortgage Loans as described herein.  The timing of changes in the rate of prepayments, liquidations and purchases of the Mortgage Loans may, and the timing of Realized Losses will, significantly affect the yield to an investor, even if the average rate of principal payments experienced over time is consistent with an investor’s expectation.  Because the rate and timing of principal payments on the Mortgage Loans will depend on future events and on a variety of factors (as described more fully herein and in the prospectus under “Yield and Prepayment Considerations”), no assurance can be given as to such rate or the timing of principal payments on the Offered Certificates.  In general, the earlier a prepayment of principal of the Mortgage Loans, the greater will be the effect on an investor’s yield.  The effect on an investor’s yield of principal payments occurring at a rate higher (or lower) than the rate anticipated by the investor during the period immediately following the issuance of the Certificates may not be offset by a subsequent like decrease (or increase) in the rate of principal payments.

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From time to time, areas of the United States may be affected by flooding, severe storms, landslides, wildfires, earthquakes or other natural disasters.  Under the Mortgage Loan Purchase Agreement, the Seller will represent and warrant that as of the Closing Date each Mortgaged Property was free of material damage.  In the event of an uncured breach of this representation and warranty that materially and adversely affects the interests of Certificateholders, the Seller will be required to repurchase the affected Mortgage Loan or substitute another mortgage loan therefor.  If any damage caused by flooding, storms, wildfires, landslides or earthquakes (or other cause) occurs after the Closing Date, the Seller will not have any repurchase obligation.  In addition, the standard hazard policies covering the Mortgaged Properties generally do not cover damage caused by earthquakes, flooding and landslides, and earthquake, flood or landslide insurance may not have been obtained with respect to such Mortgaged Properties.  As a consequence, Realized Losses could result.  To the extent that the insurance proceeds received with respect to any damaged Mortgaged Properties are not applied to the restoration thereof, the proceeds will be used to prepay the related Mortgage Loans in whole or in part.  Any repurchases or repayments of the Mortgage Loans may reduce the weighted average lives and will reduce the yields on the Offered Certificates to the extent they are purchased at a premium.

Prepayments, liquidations and purchases of Mortgage Loans will result in payments to holders of Certificates of principal amounts that would otherwise be paid over the remaining terms of such Mortgage Loans.  The rate of defaults on the Mortgage Loans will also affect the rate and timing of principal payments on the Mortgage Loans.  In general, defaults on mortgage loans are expected to occur with greater frequency in their early years, especially with respect to adjustable rate mortgage loans, as increases in monthly payments may result in a default rate higher than on level payment mortgage loans.  Furthermore, the rate of default on Mortgage Loans with high loan-to-value ratios may be higher than for other Mortgage Loans.

Certain characteristics of the Mortgage Loans that may influence the rate of defaults or losses are described under “Risk Factors” and “Description of the Mortgage Pool[s].”

[The inclusion of interest only Mortgage Loans in the Trust will generally, absent other considerations, result in longer weighted average lives of the Offered Certificates than would be the case if these Mortgage Loans provided for monthly payments of principal throughout their terms.  If an investor purchases Offered Certificates at a discount, the yield may be reduced.  In addition, a borrower may view the interest only period as a disincentive to prepayment.]  [To be provided as applicable.]

The yields on the Offered Certificates may be adversely affected by Net Prepayment Interest Shortfalls on the Mortgage Loans.  The yields on the Offered Certificates will be affected by the level of LIBOR from time to time, and by the Mortgage Rates of the Mortgage Loans from time to time as described under “Risk Factors — Mortgage Loan Interest Rates May Limit Interest Rates on the Certificates.”

[In the event that at the end of the Pre-Funding Period not all of the pre-funding amount in the pre-funding account has been used to acquire subsequent mortgage loans for inclusion in the Trust, the related Certificateholders will receive a partial prepayment on the Distribution Date in [________] [___], equal to the amount remaining the applicable pre-funding account. Although no assurance can be given, the Depositor expects that the principal balance of the subsequent mortgage loans to be sold to the Trust will require the application of substantially all of the pre-funding amount and that there should be no material principal prepaid to the Certificateholders.]

[The yields to investors on the Class [_____] Certificates may be adversely affected by the Trust Fund’s acquisition of Subsequent Mortgage Loans, which will reduce the amount and timing of principal distributions on these Certificates.]

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As described herein, excess interest will be applied, to the extent available, as an additional payment of principal on the Certificates to achieve and maintain limited overcollateralization.  The amount of excess interest available on any Distribution Date will be influenced by, among other things:

·  the amount of overcollateralization.  This means the extent to which interest on the Mortgage Loans is accruing on a higher principal balance than the aggregate Class Principal Amounts of the Certificates;       

·  the loss experience of the Mortgage Loans.  For example, excess interest will be reduced as a result of Realized Losses on the Mortgage Loans;       

·  the value of LIBOR;            

·  [to the extent which amounts are received by the Trust under the Swap Agreements; and]       

·  the extent to which the weighted average Net Mortgage Rates of the Mortgage Loans exceed the weighted average of the Certificate Interest Rates of the Certificates.       

No assurance can be given as to the amount or timing of excess interest payable on the Certificates.

[The yields to investors in the Offered Certificates will be affected by the exercise by the Residual Holder of its right to purchase the Mortgage Loans, as described under “Description of the Certificates — Optional Purchase of the Mortgage Loans” herein or their failure to exercise that right.]  [To be provided as applicable.]

If the purchaser of an Offered Certificate offered at a discount from its initial principal amount calculates its anticipated yield to maturity (or early termination) based on an assumed rate of payment of principal that is faster than that actually experienced on the related Mortgage Loans, the actual yield may be lower than that so calculated.  Conversely, if the purchaser of an Offered Certificate offered at a premium calculates its anticipated yield based on an assumed rate of payment of principal that is slower than that actually experienced on the related Mortgage Loans, the actual yield may be lower than that so calculated.  For this purpose, prepayments of principal include not only voluntary prepayments made by the borrower, but repurchases of Mortgage Loans by the Seller due to breaches of representations and warranties.

The Certificate Interest Rates applicable to the Certificates will be affected by the level of LIBOR from time to time, and by the Mortgage Rates of the Mortgage Loans from time to time as described under “Risk Factors—Mortgage Loan Interest Rates May Limit Interest Rates on the Certificates.”

Overcollateralization

The yields of the Offered Certificates will be affected by the application of Monthly Excess Interest as described herein and by the amount of overcollateralization.  The amount of Monthly Excess Interest will be affected by the delinquency, default and prepayment experience of the Mortgage Loans.  There can be no assurance as to whether overcollateralization will be increased to or maintained at the levels described herein.

Subordination of the Subordinate Certificates

As described herein, Certificates having a relatively higher priority of distribution will have a preferential right to receive payments of interest to the extent of Interest Funds and principal to the extent of the Principal Payment Amount.  As a result, the yields of the Subordinate Certificates will be more sensitive, in varying degrees, to delinquencies and losses on the Mortgage Loans than the yields of more senior Certificates.

Weighted Average Life 

Weighted average life refers to the average amount of time that will elapse from the date of issuance of a security to the date of payment to the investor of each dollar paid in net reduction of principal of such security (assuming no losses).  The weighted average lives of the Offered Certificates will be influenced by, among other things, the rate at which principal of the related Mortgage Loans is paid, which may be in the form of scheduled amortization, prepayments or liquidations and the amount of excess interest.

S-56

Prepayments on mortgage loans are commonly measured relative to a constant prepayment standard or model.  The model used in this prospectus supplement for the Mortgage Loans is CPR.  CPR assumes a constant rate of prepayment each month relative to the then outstanding balance of the related pool of mortgage loans for the life of such loans.  

CPR does not purport to be either a historical description of the prepayment experience of the Mortgage Loans or a prediction of the anticipated rate of prepayment of any mortgage loans, including the Mortgage Loans to be owned by the Issuing Entity.  The percentages of CPR in the tables below do not purport to be historical correlations of relative prepayment experience of the Mortgage Loans or predictions of the anticipated relative rate of prepayment of the Mortgage Loans.  Variations in the prepayment experience and the principal balance of the Mortgage Loans that prepay may increase or decrease the percentages of initial Class Principal Amounts (and weighted average lives) shown in the following table.  Such variations may occur even if the average prepayment experience of all such Mortgage Loans equals any of the specified percentages of CPR.

The tables below were prepared based on the following assumptions (collectively, the “Modeling Assumptions”): [(1) the initial Class Principal Amounts are as set forth in the table on page S-[__]; (2) each monthly payment of principal and interest is timely received on the first day of each month commencing in [____]; (3) principal prepayments are received in full on the last day of each month commencing in [___] and there are no Net Prepayment Interest Shortfalls; (4) there are no defaults or delinquencies on the Mortgage Loans; (5) Distribution Dates occur on the [25]th day of each month commencing in [___]; (6) there are no purchases or substitutions of Mortgage Loans (except in the case of an Optional Termination of the Issuing Entity); (7) the Mortgage Rate of each Mortgage Loan is adjusted on the next applicable rate adjustment date and any subsequent adjustment dates to equal the value of the related Index set forth below plus the related Gross Margin subject to the applicable caps and floor; (8) the Adjustment Date with respect to each assumed Mortgage Loan occurs in the month immediately following the applicable interest adjustment date; (9) the value of Six-Month LIBOR is equal to [___]% and remains constant; and the value of One-Month LIBOR is equal to [___]% and remains constant; (10) there is no Optional Termination of the Issuing Entity (except in the case of Weighted Average Life in Years With Optional Termination); (11) the Certificates are issued on [___]; (12) the Servicing Fee Rate for any Mortgage Loan is equal to the rate for such Mortgage Loan as described under “Fees and Expenses of the Trust” herein; and (13) the Mortgage Loans are aggregated into assumed Mortgage Loans having the following characteristics]  [May vary in accordance with structure of transaction]:

S-57

Assumed Characteristics of the Mortgage Loans

Loan Number	Principal Balance  ($)	Gross Mortgage Rate (%)	Net Mortgage Rate (%)	Expense Fee Rate	Remaining Term to Maturity (months)	Original Term to Maturity (months)	Months to Next Rate Adjustment Date	Maximum Rate (%)	Minimum Rate (%)	Gross Margin (%)	Initial Periodic Rate Cap (%)	Subsequent Periodic Rate Cap (%)	Rate Adjustment Frequency (months)	Remaining IO Term (months)	Index Type
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24

The actual characteristics and the performance of the Mortgage Loans will differ from the assumptions used in constructing the tables set forth below, which are hypothetical in nature and are provided only to give a general sense of how the principal cashflows might behave under varying prepayment scenarios.  For example, it is not expected that the Mortgage Loans will prepay at a constant rate until maturity, that all of the Mortgage Loans will prepay at the same rate or that there will be no defaults or delinquencies on the Mortgage Loans.  Moreover, the diverse remaining terms to maturity of the Mortgage Loans could produce slower or faster principal payments than indicated in the tables at the various percentages of CPR specified, even if the weighted average remaining term to maturity are as assumed.  Any difference between such assumptions and the actual characteristics and performance of the Mortgage Loans, or the actual prepayment or loss experience, will cause the percentages of initial Class Principal Amounts outstanding over time and the weighted average lives of the Offered Certificates to differ (which difference could be material) from the corresponding information in the tables for each indicated percentage of CPR.

The Mortgage Loans are expected to have the approximate actual aggregate characteristics as of the cut-off date as set forth in Annex A attached to this prospectus supplement and incorporated by reference herein.

Subject to the foregoing discussion and assumptions, the following tables indicate the weighted average lives of the Offered Certificates and set forth the percentages of the initial Class Principal Amounts of the Offered Certificates that would be outstanding after each of the Distribution Dates shown at various percentages of CPR.

S-58

The weighted average life of a class of Offered Certificates is determined by (1) multiplying the net reduction, if any, of the applicable Class Principal Amount by the number of years from the date of issuance of the Offered Certificate to the related Distribution Date, (2) adding the results and (3) dividing the sum by the aggregate of the net reductions of Class Principal Amount described in (1) above.

Percentage of Initial Class Principal Amount of the
 Class [____] and Class [___] Certificates Outstanding
at the Following Percentages of CPR 

	Class [___] Certificates					Class [___] Certificates
	0%	10%	25%	40%	50%	0%	10%	25%	40%	50%
Initial Percentage
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
[     ]
Weighted Average Life in Years: Without Optional Termination
With Optional Termination

[* Indicates a value between 0.0% and 0.5%.] 

S-59

USE OF PROCEEDS

The Issuing Entity intends to distribute all of the net proceeds of the issuance of the Certificates to the Depositor which will use such proceeds to pay certain indebtedness incurred by Redwood Trust in connection with the acquisition of the Mortgage Loans. Expenses incurred by the Depositor in connection with this offering are expected to be approximately $[_______] before deducting expenses payable by it of approximately $[    ] ($[   ] of which expenses were incurred in connection with the selection and acquisition of the mortgage loans and other assets of the issuing entity).

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

Investors should review the material set forth in this section together with the information in the section “Material Federal Income Tax Consequences” in the prospectus.

[General

For federal income tax purposes, the trust estate [(exclusive of the rights in respect of the additional collateral)] will consist of one or more pools of assets for which one or more elections will be made to treat each such pool as a “real estate mortgage investment conduit” (“REMIC”) within the meaning of section 860D of the Internal Revenue Code, of 1986 (the “Code”). The Class [A and Class B] Certificates will be designated as “regular interests” in the REMIC and the Class R Certificates will represent the “residual interest” in the [upper tier/lower tier] REMIC. Accordingly, prospective investors should review “Material Federal Income Tax Consequences — REMIC Securities” in the prospectus.

Tax Treatment of the Offered Certificates

A holder of a [Class A or Class B] Certificate will be treated for tax purposes: (i) as holding an undivided interest in a REMIC regular interest corresponding to that Class [A or Class B] Certificate [and (ii) as having entered into a limited recourse interest rate cap contract (the “Cap Contract”).] The regular interest corresponding to an offered 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. [The amount of distributions on the regular interest corresponding to an offered certificate may exceed the actual amount of distributions on the offered certificate. Any amount payable on an offered certificate in excess of the amount payable on the corresponding regular interest will be deemed to have been paid to the holder of that offered certificate pursuant to the Cap Contract. Alternatively, any amount payable on the regular interest corresponding to an offered certificate in excess of the amount payable on the offered certificate will be treated as having been received by the holder of that offered certificate and then as having been paid by such holder pursuant to the Cap Contract. Consequently, each beneficial owner of an offered certificate will be required to report income accruing with respect to the regular interest component as discussed under “Material Federal Income Tax Consequences – REMIC Securities – Taxation of Regular Interest Securities” in the prospectus. In addition, each beneficial owner of an offered certificate will be required to report net income with respect to the Cap Contract component and will be permitted to recognize a net deduction with respect to the Cap Contract component, subject to the discussion under “–The Cap Contract Components” below.] Prospective investors should consult their own tax advisors regarding the consequences to them in light of their own particular circumstances of taxing separately the two components comprising each offered certificate.

For federal income tax purposes, the offered certificates [(other than the Cap Contract component in the case of a Class [A and Class B] Certificate)], as regular interests in a REMIC, are treated as debt instruments issued by the REMIC on the date on which those interests are created, and not as ownership interests in the REMIC or its assets. Owners of offered certificates that otherwise report income under a cash method of accounting will be required to report income with respect to the offered certificates under an accrual method.

Original Issue Discount 

The regular interest component of an offered certificate may be treated as having been issued with original issue discount (“OID”). In such case, a beneficial owner of an offered certificate must include any OID with respect to such component in income as it accrues using a constant yield method, regardless of whether the beneficial owner receives currently the cash attributable to such OID. We refer you to “Material Federal Income Tax Consequences — Debt Securities Generally —Original Issue Discount” in the prospectus. The prepayment assumption that will be used for purposes of computing OID, market discount or certificate premium, if any, for federal income tax purposes is a CPR of [ ]%. No representation is made that the mortgage loans will, in fact, prepay at this or any other rate.

S-60

[The Cap Contract Components 

The portion of the overall purchase price of an offered certificate attributable to the Cap Contract component must be amortized over the life of such certificate, taking into account the declining balance of the related regular interest component. Treasury regulations concerning notional principal contracts provide alternative methods for amortizing the purchase price of an interest rate cap contract. Under one method—the level yield constant interest method—the price paid for an interest rate cap is amortized over the life of the cap as though it were the principal amount of a loan bearing interest at a reasonable rate. Prospective investors are urged to consult their tax advisors concerning the methods that can be employed to amortize the portion of the purchase price paid for the Cap Contract component of an offered certificate.

Any payments made to a beneficial owner of an offered certificate in excess of the amounts payable on the corresponding regular interest will be treated as having been received on such certificate pursuant to the Cap Contract, and such excess will be treated as a periodic 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 the Cap Contract component, such excess represents net income for that year. Conversely, to the extent that the amount of that year’s amortized cost exceeds the sum of the periodic payments, such excess shall represent a net deduction for that year. In addition, any amounts payable on such regular interest in excess of the amount of payments on the offered certificates to which it relates will be treated as having been received by the beneficial owners of such certificates and then paid by such owners pursuant to the Cap Contract, and such excess should be treated as a 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 the Cap Contract for such taxable year. Although not clear, net income or a net deduction with respect to the Cap Contract should be treated as ordinary income or as an ordinary deduction.

A beneficial owner’s ability to recognize a net deduction with respect to the Cap Contract component may be limited under Sections 67 and/or 68 of the Code in the case of (1) estates and trusts and (2) individuals owning an interest in such component directly or through a “pass-through entity” (other than in connection with such individual’s trade or business). Pass-through entities include partnerships, S corporations, grantor trusts and non-publicly offered regulated investment companies, but do not include estates, nongrantor trusts, cooperatives, real estate investment trusts and publicly offered regulated investment companies. Further, such a beneficial owner will not be able to recognize a net deduction with respect to the Cap Contract component in computing the beneficial owner’s alternative minimum tax liability.

Because a beneficial owner of a offered certificate will be required to include in income the amount deemed to have been paid by such owner pursuant to the Cap Contract but may not be able to deduct that amount from income, a beneficial owner of a offered certificate may have income that exceeds cash distributions on the offered certificate, in any period and over the term of the offered certificate. As a result, the offered certificates may not be a suitable investment for any taxpayer whose net deduction with respect to the Cap Contract would be subject to the limitations described above.

Alternative federal income tax characterization of the Cap Contract is possible, including treatment of the Cap Contract as debt or an interest in a partnership. The amount, timing and character of the income and deductions for a Class [A or class B] Certificateholder with respect to the Cap Contract would differ if the Cap Contract was held to constitute indebtedness or an interest in a partnership. Because the trust will treat the Cap Contract as a right to receive amounts under a notional principal contract, the servicer will not attempt to satisfy the tax reporting requirements that would apply under these alternative characterizations of the Cap Contract. Investors, including those that are foreign persons, should consult their own tax advisors in determining the federal, state, local and other tax consequences to them of the purchase, ownership and disposition of Class [A or Class B] Certificates.

The Cap Contract will not constitute: (i) a “real estate asset” within the meaning of section 856(c)(5)(B) of the code if held by a real estate investment trust; (ii) a “qualified mortgage” within the meaning of section 860G(a)(3) of the Code or a “permitted investment” within the meaning of section 860G(a)(5) of the Code if held by a REMIC; or (iii) assets described in section 7701(a)(19)(C)(xi) of the Code if held by a thrift. Moreover, other special rules may apply to certain investors, including dealers in securities and dealers in notional principal contracts.

S-61

Upon the sale, exchange, or other disposition of a Class [A or Class B] Certificate, the beneficial owner of the certificate must allocate the amount realized between the two investment components of the certificate based on the relative fair market values of those components at the time of sale, exchange, or other disposition and must treat the sale, exchange or other disposition as a sale, exchange or disposition of the regular interest component and the Cap Contract. Assuming that the certificate is held as a “capital asset” within the meaning of section 1221 of the Code, gain or loss on the disposition of an interest in the Cap Contract should be capital gain or loss. Upon the sale, exchange, or other disposition of the regular interest component of a Class [A or Class B] Certificate, the seller will recognize gain or loss equal to the difference between the amount realized on the sale, exchange, or other disposition and such seller’s adjusted basis in the regular interest component. The adjusted basis generally will equal the seller’s cost, increased by any original issue discount or market discount previously included in the seller’s income, and reduced by distributions previously received by the seller of amounts included in the stated redemption price at maturity of the regular interest component and further reduced by any certificate premium amortized by the seller as an offset to interest income on the regular interest component.]

Information Reporting 

The trustee will furnish or make available, within a reasonable time after the end of each calendar year, to each person who held a Class [ ] Certificate at any time during the year, the information required by applicable rules to assist the holders in preparing their federal income tax returns, or to enable holders to make the information available to beneficial owners or financial intermediaries that hold the certificates on behalf of beneficial owners. In particular, this information will include a statement of the adjusted issue price of the Class [ ] Certificate at the beginning of each accrual period. In addition, the reports will include information necessary to compute the accrual of any market discount that may arise upon secondary trading of Class [ ] Certificates.

Other Matters 

For a discussion of backup withholding and taxation of foreign investors in the offered certificates. We refer you to “Material Federal Income Tax Consequences — Backup Withholding” and “Material Federal Income Tax Consequences — Withholding with Respect to Certain Foreign Investors” in the accompanying prospectus.

ERISA MATTERS

General

 Section 406 of ERISA prohibits, and Section 4975 of the Code imposes adverse tax consequences on, certain transactions between Plans and persons that are “parties in interest” under ERISA or “disqualified persons” under the Code with respect to such Plan.  A violation of these “prohibited transaction” rules may result in an excise tax and other penalties and liabilities under ERISA and the Code for such persons.

Certain transactions involving the assets of a trust might be deemed to constitute prohibited transactions under Section 406 of ERISA and the Section 4975 of the Code with respect to a Plan that purchases securities issued by that trust if assets of the issuing entity were deemed to be assets of the Plan.  Under a regulation issued by the United States Department of Labor (the “Plan Assets Regulation”), the assets of a trust would be treated as plan assets of the Plan for the purposes of ERISA and the Section 4975 Code only if the Plan acquired an “equity interest” in the trust and none of the exceptions contained in the Plan Assets Regulation was applicable.  An equity interest is defined under the Plan Assets Regulation as an interest other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features.

Purchases of the Offered Certificates 

[Although there is little guidance on the subject, at the time of their issuance, the Offered Certificates should be treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulations.  This determination is based in part upon (1) tax counsel’s opinion that Offered Certificates transferred on the Closing Date to parties unrelated to the initial holder of the Ownership Certificate will be classified as debt for U.S. federal income tax purposes and that Retained Certificates, if later sold to a party unrelated to the holder of the Ownership Certificate for cash, will be classified as debt instruments for U.S. federal income tax purposes as of the date of such sale, based on certain assumptions (including that the rating of the Offered Certificates as of the Closing Date has not declined below investment grade) and (2) the traditional debt features of the Offered Certificates, including the reasonable expectation of purchasers of the Offered Certificates that they will be repaid when due, as well as the absence of conversion rights, warrants and other typical equity features.  Based upon the foregoing and other considerations, subject to the considerations described below, the Offered Certificates may be purchased by a Plan.

S-62

Without regard to whether the Offered Certificates are considered an “equity interest” in the Issuing Entity under the Plan Asset Regulations, the acquisition or holding of Offered Certificates by or on behalf of a Plan could be considered to give rise to a prohibited transaction if the Underwriters, the Issuing Entity, the Certificate Trustee, or any of their respective affiliates is or becomes a party in interest or a disqualified person with respect to such Plan.  In that case, certain prohibited transaction exemptions from the prohibited transaction rules could be applicable, depending on the type of Plan involved and the circumstances of the plan fiduciary’s decision to acquire such Offered Certificate.  Included among these exemptions are: PTCE 84-14 (relating to transactions effected by a “qualified professional asset manager”); PTCE 90-1 (relating to transactions involving insurance company pooled separate accounts); PTCE 91-38 (relating to transactions involving bank collective investment funds); PTCE 95-60 (relating to transactions involving insurance company general accounts); and PTCE 96-23 (relating to transactions effected by an “in-house asset manager”).  Even if the conditions specified in one or more of these exemptions are met, the scope of the relief provided by these exemptions might or might not cover all acts that might be construed as prohibited transactions.  There can be no assurance that any of these exemptions, or any other exemption, will be available with respect to any particular transaction involving such Offered Certificates.

Employee benefit plans that are governmental plans (as defined in Section 3(32) of ERISA) and certain church plans (as defined in Section 3(33) of ERISA) are not subject to ERISA requirements but may be subject to Similar Law.

The Offered Certificates should not be purchased with the assets of a Benefit Plan if the Seller, the Depositor, the Certificate Trustee, the Issuing Entity Administrator, the Underwriters or any of their affiliates is a fiduciary or gives investment advice with respect to such Benefit Plan or is an employer maintaining or contributing to such Benefit Plan, unless such purchase and holding of the Offered Certificates would be covered by an applicable prohibited transaction exemption, and will not cause a non-exempt violation of any Similar Law.

Prospective Benefit Plan investors in the Offered Certificates should consult with their legal advisors concerning the impact of ERISA and the Code and any Similar Law, the availability of other exemptions from the prohibited transaction rules that may apply to them, and the potential consequences in their specific circumstances, prior to making an investment in the Offered Certificates.  Each Benefit Plan fiduciary should also determine whether under the general fiduciary standards of investment prudence and diversification, an investment in the Offered Certificates is appropriate for the Benefit Plan, taking into account the overall investment policy of the Plan and the composition of the Benefit Plan’s investment portfolio.

Each purchaser and transferee of an Offered Certificate will be deemed to represent and warrant to the Issuing Entity that (i) it is not acquiring such Certificate for, or with the assets of, a Benefit Plan or (ii) its acquisition and holding of such Certificate will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code which is not covered under an Investor-Based Exemption or some other applicable exemption, and will not cause a non-exempt violation of any Similar Law.]

METHOD OF DISTRIBUTION

Subject to the terms and conditions set forth in the Underwriting Agreement between the depositor, Redwood Trust and the Underwriter, the depositor has agreed to cause the Issuing Entity to sell to the Underwriter, and the Underwriter has agreed to purchase from the Issuing Entity, the certificates. Distribution of the Certificates will be made by the Underwriter from time to time in negotiated transactions or otherwise at varying prices to be determined at the time of sale. In connection with the sale of the certificates, the Underwriter may be deemed to have received compensation from the Issuing Entity in the form of underwriting discounts.

The Underwriter intends to make a secondary market in the certificates, but has no obligation to do so. There can be no assurance that a secondary market for the certificates will develop or, if it does develop, that it will continue or that it will provide certificateholders with a sufficient level of liquidity of investment. The certificates will not be listed on any national securities exchange.

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

S-63

LEGAL MATTERS

The validity of the Certificates will be passed upon for the Issuing Entity by Weintraub Genshlea Chediak Tobin & Tobin Law Corporation, San Francisco, California. Certain tax matters will be passed upon by for the Issuing Entity by Chapman and Cutler LLP, San Francisco, California. [___________] will act as counsel for the underwriter.

RATINGS

The depositor expects that the offered certificates will receive credit ratings from two nationally recognized statistical rating organizations that have been hired to rate the certificates (the “hired NRSROs”).

The ratings assigned by [_________] to collateralized mortgage obligations address the likelihood of the receipt of all payments on the mortgage loans by the related certificateholders under the agreements pursuant to which such certificates are issued. [_________]’s ratings take into consideration the credit quality of the related mortgage pool, including any credit support providers, structural and legal aspects associated with such certificates, and the extent to which the payment stream on the mortgage pool is adequate to make the payments required by such certificates. [_________]’s ratings on such certificates do not, however, constitute a statement regarding frequency of prepayments of the mortgage loans.

The ratings assigned by [_________] to the Senior Certificates address the likelihood of the receipt of all payments on the mortgage loans by the related Certificateholders under the agreements pursuant to which such certificates are issued. [_________]’s ratings take into consideration the credit quality of the related mortgage pool, including any credit support providers, structural and legal aspects associated with such certificates, and the extent to which the payment stream on such mortgage pool is adequate to make payments required by such certificates. [_________]’s ratings on such certificates do not, however, constitute a statement regarding frequency of prepayments on the related mortgage loans.

The ratings assigned by the hired NRSROs do not constitute a statement regarding frequency of prepayments of the mortgage loans. The ratings of the hired NRSROs do not address the possibility that, as a result of principal prepayments, certificateholders may receive a lower than anticipated yield.

The ratings do not address the likelihood that any Basis Risk Shortfall Carryforward Amount will be repaid to Certificateholders from Monthly Excess Cashflow.

The ratings assigned to the Certificates should be evaluated independently from similar ratings on other types of securities. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the hired NRSROs.

The issuing entity is not requesting a rating of the certificates by any rating agency other than the hired NRSROs referred to above; there can be no assurance, however, as to whether any other rating agency will rate the certificates or, if it does, what rating would be assigned by such other rating agency.

In preparing for the offering of the certificates, the sponsor engaged the hired NRSROs to provide ratings on the offered certificate. Accordingly, the sponsor executed an engagement letter with each hired NRSRO setting forth the terms on which each hired NRSRO would provide such ratings. Although the engagement letter with each hired NRSRO states that its fees are not contingent upon the issuance of the certificates, if the certificates are not issued under certain circumstances a portion of the fees of each hired NRSRO may not be payable. In addition, the fees paid to each hired NRSRO at closing include a fee for ongoing surveillance by each hired NRSRO for so long as the certificates are outstanding. However, the hired NRSROs are under no obligation to continue to monitor or provide a rating on the certificates.

S-64

INDEX OF DEFINED TERMS

	Page No.
Adjustment Date
Advances
agreements	S-45
Available Funds	S-27
beneficial owner	S-25
Book-Entry Certificates	S-25
Cap Contract	S-58
capital asset	S-61
Certificate Distribution Account	S-26
Certificate Interest Payment Amount	S-28
Certificate Interest Rate	S-27
Certificates	S-3, S-25
Closing Date	S-3
Code	S-9, S-58
Constant Prepayment Rate	S-32
CPR	S-32
Custodian	S-3
Cut-Off Date	S-3
defective mortgage loan	S-46
Definitive Certificate	S-25
Deleted Mortgage Loan	S-46
Depositor	S-2
Depository Trust Company	S-25
disqualified persons	S-61
Distribution Account	S-26
DTC	S-25
Emergency Economic Stabilization Act of 2008	S-10
Employee Retirement Income Security Act of 1974	S-9
equity interest	S-61
ERISA	S-9
European Depositaries	S-25
excess interest	S-5
Fannie Mae	S-10
Federal Home Loan Mortgage Corporation	S-10
Federal National Mortgage Association	S-10
FHA Mortgage Loans	S-18
Financial Intermediary	S-26
Freddie Mac	S-10
Indirect Participants	S-26
in-house asset manager	S-62
Insurance Proceeds	S-27
Interest Accrual Period	S-27
Interest Payment Amount	S-27
Internal Revenue Code of 1986	S-9
Internal Revenue Code, of 1986	S-58
Invested Amount Payment	S-29
Investor Certificate	S-25
Investor Percentage	S-29
issuing entity	S-35
Issuing Entity	S-2
Issuing Entity Administrator	S-2
Liquidated Mortgage Loan	S-30

I-1

	Page No.
Liquidation Proceeds	S-27
Master Servicer	S-3
Modeling Assumptions	S-54
monthly advance	S-48
Mortgage	S-46
Mortgage File	S-46
Mortgage Note	S-46
mortgage related securities	S-9
Net Interest Shortfalls	S-28
OID	S-58
Original Invested Amount	S-25
original issue discount	S-58
Original Senior Class Principal Amount	S-25
Original Subordinated Class Principal Amount	S-25
Originator	S-3
out of pocket	S-41
overcollateralization	S-5
Participants	S-25
parties in interest	S-61
pass-through entity	S-59
permitted investment	S-59
Plan Assets Regulation	S-61
Pool Principal Balance	S-29
Prepayment Assumption	S-32
Prepayment Interest Shortfall	S-28
President’s Financial Stability Plan	S-10
Public-Private Investment Program	S-10
qualified mortgage	S-59
qualified professional asset manager	S-62
real estate asset	S-59
real estate investment conduits	S-9
real estate mortgage investment conduit	S-58
Realized Loss	S-30
Record Date	S-27
regular interests	S-58
Relevant Depositary	S-25
Relevant Implementation Date	S-i
Relevant Member State	S-i
Relief Act Reduction	S-28
REMIC	S-58
REMIC’s	S-9
Replacement Mortgage Loan	S-46
Residential mortgage-backed securities	S-10
residual interest	S-9, S-58
RMBS	S-10
Rules	S-26
RWT Holdings	S-37
SEC	S-23
Secondary Mortgage Market Enhancement Act of 1984	S-9
Securities and Exchange Commission	S-23
Seller	S-2
senior	S-4
Senior Certificates	S-25

I-2

	Page No.
Senior Class Principal Amount	S-25
Senior Interest Payment Amount	S-28
Senior Percentage	S-29
Senior Principal Payment Amount	S-28
Servicemembers Civil Relief Act	S-28
Servicer	S-3
servicing agreement	S-47
servicing fee	S-48
servicing fee rate	S-49
SMMEA	S-9
Sponsor	S-2
Stated Principal Balance	S-29
streamline refi	S-51
Structuring Assumptions	S-32
subordinate	S-4
Subordinated Certificates	S-25
Subordinated Class Principal Amount	S-25
Subordinated Interest Carryover Shortfall	S-28
Subordinated Interest Payment Amount	S-28
Subordinated Principal Carryover Shortfall	S-29
Subordinated Principal Payment Amount	S-29
Substitution Adjustment Amount	S-46
TALF	S-10
TARP	S-10
Term Asset-Backed Securities Loan Facility	S-10
Troubled Asset Relief Program	S-10
VA Mortgage Loans	S-18

I-3

ANNEX A – CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS

The mortgage loans are expected to have the following approximate aggregate characteristics as of the cut-off date. Prior to the issuance of the certificates, mortgage loans may be removed from the trust fund as a result of incomplete documentation or otherwise, if the depositor deems such removal necessary or appropriate.

Set forth below is a description of certain additional characteristics of the mortgage loans as of the cut-off date (except as otherwise indicated). All percentages of the mortgage loans are approximate percentages by Cut-off Date Principal Balance (except as otherwise indicated). Unless otherwise specified, all Stated Principal Balances of the mortgage loans are as of the cut-off date. In some instances, percentages may not add to 100% due to rounding.

[Cut-off Date Principal Balance

Cut-off Date Principal Balances ($)	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total		$		%		%		$		%

____________

Current Mortgage Rates

Current Mortgage Rates (%)	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________

Original Term

Original Term (Months)	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________

Remaining Term

Remaining Term (Months)	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________

A-1

Original LTV Ratios

Original LTV Ratios (%)	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total		$		%		%		$		%

____________

Credit Score

Credit Score	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total		$		%		%		$		%

____________

Geographic Distribution of Mortgaged Properties

Geographic Distribution	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________

Occupancy Type

Occupancy Type	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total		$		%		%		$		%

____________

Property Type

Property Type	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total		$		%		%		$		%

____________ 

A-2

Loan Purpose

Loan Purpose	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total		$		%		%		$		%

 ____________

Prepayment Penalty

Prepayment Penalty (Years)	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________ 

Interest Only Period

Interest Only Period (Months)	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non- Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________ 

Loan Documentation

Loan Documentation	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________ 

Mortgage Loan Type

Mortgage Loan Type	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________ 

A-3

Underwriting Exception Loans

	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
[Originator Name] [Originator Name]		$		%		%		$		%

Mortgage Loan Modification

Modification	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
[Interest Rate Modification]
[Term Modification]
[Principal Balance Reduction]
[Principal Balance Forbearance]
[           ]
Total:		$		%		%		$		%

Distribution of Seasoning

Months Elapsed Since Origination	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________ 

Prepayment Penalty Description

Prepayment Penalty Description	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________ 

A-4

Margin

Margin (%)	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________ 

Initial Periodic Caps

Initial Periodic Cap (%)	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________ 

Subsequent Periodic Cap

Subsequent Periodic Cap (%)	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________ 

Maximum Mortgage Rate

Maximum Mortgage Rate (%)	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________ 

Next Note Rate Adjustment Date

Next Note Rate Adjustment Date	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________ 

A-5

Originator Concentration

Originator	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________ 

Servicer Concentration

Servicer Concentration	Number of Mortgage Loans	Aggregate Principal Balance Outstanding	Percent of Aggregate Principal Balance Outstanding		Weighted Average Mortgage Rate		Non-Zero Weighted Average Credit Score	Average Principal Balance	Weighted Average Original LTV
Total:		$		%		%		$		%

____________ 

A-6

Rule 15Ga-1 Repurchases

Name of Issuing Entity	Check if Registered	Name of Originator	Total Assets in ABS by Originator			Assets That Were Subject of Demand			Assets That Were Repurchased or Replaced			Assets Pending Repurchase or Replacement (within cure period)			Demand in Dispute			Demand Withdrawn			Demand Rejected
			#	$	(% of principal balance)	#	$	(% of principal balance)	#	$	(% of principal balance)	#	$	(% of principal balance)	#	$	(% of principal balance)	#	$	(% of principal balance)	#	$	(% of principal balance)
Sequoia Mortgage Trust [__], CIK#[_______]	x
SubTotal			0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%
Sequoia Mortgage Trust [__], CIK#[_______]	x
SubTotal			0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%
Total			0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%	0	$	0%

____________

A-7

ANNEX B – GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES

Except in certain limited circumstances, the globally offered Sequoia Mortgage Trust [_________], Collateralized Mortgage Certificates (the “Global Certificates”) will be available only in book-entry form. Investors in the Global Certificates may hold such Global Certificates through any of The Depository Trust Company (“DTC”), CEDEL or Euroclear. The Global Certificates will be tradeable 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 Certificates through CEDEL and Euroclear will be conducted in the ordinary way in accordance with their normal rules and operating procedures and in accordance with conventional Eurocertificate practice (i.e., seven-calendar day settlement).

Secondary market trading between investors holding Global Certificates through DTC will be conducted according to the rules and procedures applicable to U.S. corporate debt obligations and prior collateralized mortgage certificate issues.

Secondary cross-market trading between CEDEL or Euroclear and DTC Participants holding Global Certificates will be effected on a delivery-against-payment basis through the respective Depositaries of CEDEL and Euroclear (in such capacity) and as DTC Participants.

Non-U.S. holders (as described below) of Global Certificates 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 Certificates will be held in book-entry form by DTC in the name of Cede & Co. as nominee of DTC. Investors’ interests in the Global Certificates will be represented through financial institutions acting on their behalf as direct and indirect participants in DTC (each, a “DTC Participant”). As a result, CEDEL 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 Certificates through DTC will follow the settlement practices’ applicable to other collateralized mortgage certificate issues. Investor securities custody accounts will be credited with their holdings against payment in same-day funds on the settlement date.

Investors electing to hold their Global Certificates through CEDEL or Euroclear accounts will follow the settlement procedures applicable to conventional Eurocertificates, except that there will be no temporary global security and no “lock-up” or restricted period. Global Certificates 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 collateralized mortgage certificate issues in same-day funds.

Trading Between CEDEL and/or Euroclear Participants. Secondary market trading between CEDEL Participants or Euroclear Participants will be settled using the procedures applicable to conventional Eurocertificates in same-day funds.

B-1

Trading Between DTC Seller and CEDEL or Euroclear Purchaser. When Global Certificates are to be transferred from the account of a DTC Participant to the account of a CEDEL Participant or a Euroclear Participant, the purchaser will send instructions to CEDEL or Euroclear through a CEDEL Participant or Euroclear Participant at least one business day prior to settlement. CEDEL or Euroclear will instruct the respective Depositary, as the case may be, to receive the Global Certificates against payment. Payment will include interest accrued on the Global Certificates from and including the last coupon distribution 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 Certificates. After settlement has been completed, the Global Certificates will be credited to the respective clearing system and by the clearing system, in accordance with its usual procedures, to the CEDEL 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 Certificates 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 CEDEL or Euroclear cash debt will be valued instead as of the actual settlement date.

CEDEL 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 CEDEL or Euroclear. Under this approach, they may take on credit exposure to CEDEL or Euroclear until the Global Certificates are credited to their accounts one day later.

As an alternative, if CEDEL or Euroclear has extended a line of credit to them, CEDEL 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, CEDEL Participants or Euroclear Participants purchasing Global Certificates would incur overdraft charges for one day, assuming they cleared the overdraft when the Global Certificates were credited to their accounts. However, interest on the Global Certificates would accrue from the value date. Therefore, in many cases the investment income on the Global Certificates earned during that one-day period may substantially reduce or offset the amount of such overdraft charges, although this result will depend on each CEDEL 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 Certificates to the respective European Depository for the benefit of CEDEL 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 CEDEL or Euroclear Seller and DTC Purchaser. Due to time zone differences in their favor, CEDEL Participants and Euroclear Participants may employ their customary procedures for transactions in which Global Certificates are to be transferred by the respective clearing system, through the respective Depositary, to a DTC Participant. The seller will send instructions to CEDEL or Euroclear through a CEDEL Participant or Euroclear Participant at least one business day prior to settlement. In these cases CEDEL or Euroclear will instruct the respective Depositary, as appropriate, to deliver the Global Certificates to the DTC Participant’s account against payment. Payment will include interest accrued on the Global Certificates 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 CEDEL Participant or Euroclear Participant the following day, and receipt of the cash proceeds in the CEDEL 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 CEDEL 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 valued date (i.e., the trade fails), receipt of the cash proceeds in the CEDEL Participant’s or Euroclear Participant’s account would instead be valued as of the actual settlement date.

Finally, day traders that use CEDEL or Euroclear and that purchase Global Certificates from DTC Participants for delivery to CEDEL 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 CEDEL or Euroclear for one day (until the purchase side of the day trade is reflected in their CEDEL or Euroclear accounts) in accordance with the clearing system’s customary procedures;

B-2

(b)          borrowing the Global Certificates in the U.S. from a DTC Participant no later than one day prior to settlement, which would give the Global Certificates sufficient time to be reflected in their CEDEL 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 CEDEL Participant or Euroclear Participant.

CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS

A holder that is not a “United States person” within the meaning of Section 7701(a)(30) of the Internal Revenue Code of 1986 holding a book-entry Certificate through Clearstream, Euroclear or DTC may be subject to U.S. withholding tax at a rate of 30% unless such holder provides certain documentation to the Trustee or to the U.S. entity required to withhold tax (the “U.S. withholding agent”) establishing an exemption from withholding. A holder that is not a United States person may be subject to 30% withholding unless:

I.            the [_______], on behalf of the Trustee, or the U.S. withholding agent receives a statement —

(a)          from the holder on Internal Revenue Service (“IRS”) Form W-8BEN (or any successor form) that —

(i)          is signed by the Certificateholder under penalty of perjury,

(ii)         certifies that such owner is not a United States person, and (iii) provides the name and address of the Certificateholder, or

(b)          from a securities clearing organization, a bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business that —

(i)          is signed under penalties of perjury by an authorized representative of the financial institution,

(ii)         states that the financial institution has received an IRS Form W-8BEN (or any successor form) from the certificateholder or that another financial institution acting on behalf of the certificateholder has received such IRS Form W-8BEN (or any successor form),

(iii)        provides the name and address of the Certificateholder, and

(iv)        attaches the IRS Form W-8BEN (or any successor form) provided by the Certificateholder;

II.           the holder claims an exemption or reduced rate based on a treaty and provides a properly executed IRS Form W-8BEN (or any successor form) to the Issuing Entity Administrator or the U.S. withholding agent;

III.          the holder claims an exemption stating that the income is effectively connected to a U.S. trade or business and provides a properly executed IRS Form W-8ECI (or any successor form) to the [______] or the U.S. withholding agent; or

IV.          the holder is a “nonwithholding partnership” and provides a properly executed IRS Form W-8IMY (or any successor form) with all necessary attachments to the Trustee or the U.S. withholding agent. Certain pass-through entities that have entered into agreements with the Internal Revenue Service (for example “qualified intermediaries”) may be subject to different documentation requirements; and such holders are encouraged to consult with their tax advisors when purchasing the Certificate.

B-3

A book-entry Certificateholder holding through Clearstream or Euroclear provides the forms and statements referred to above by submitting them to the person through which he holds an interest in the book-entry Certificate, which is the clearing agency, in the case of persons holding directly on the books of the clearing agency. Under certain circumstances a Form W-8BEN, if furnished with a taxpayer identification number, (“TIN”), will remain in effect until the status of the beneficial owner changes, or a change in circumstances makes any information on the form incorrect. A Form W-8BEN, if furnished without a TIN, and a Form W-8ECI will remain in effect for a period starting on the date the form is signed and ending on the last day of the third succeeding calendar year, unless a change in circumstances makes any information on the form incorrect.

In addition, a book-entry Certificateholder holding through Clearstream, Euroclear or DTC may be subject to backup withholding unless the holder:

I.           provides a properly executed IRS Form W-8BEN, Form W-8ECI or Form W-8IMY(or any successor forms) if that person is not a United States person;

II.          provides a properly executed IRS Form W-9 (or any substitute form) if that person is a United States person; or

III.         is a corporation, within the meaning of Section 7701(a) of the Internal Revenue Code of 1986, or otherwise establishes that it is a recipient exempt from United States backup withholding.

This summary does not deal with all aspects of federal income tax withholding or backup withholding that may be relevant to investors that are not “United States persons” within the meaning of Section 7701(a)(30) of the Internal Revenue Code. Such investors are encouraged to consult their own tax advisors for specific tax advice concerning their holding and disposing of the book-entry Certificate.

The term “United States person” means (1) a citizen or resident of the United States, (2) a corporation or partnership organized in or under the laws of the United States or any state or the District of Columbia (other than a partnership that is not treated as a United States person under any applicable Treasury regulations), (3) an estate the income of which is includible in gross income for United States tax purposes, regardless of its source, or (4) a trust if a court within the United States is able to exercise primary supervision over the administration of the issuing entity 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 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 so treated also will be considered United States persons.

B-4

You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus. We have not authorized anyone to provide you with any other information or to make any representations not contained in this prospectus supplement and the prospectus. This prospectus supplement and the prospectus do not constitute an offer to sell, or a solicitation of an offer to buy, the securities offered hereby by anyone in any jurisdiction in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make any such offer or solicitation.

$[                             ] (Approximate)

[LOGO] Sequoia MORTGAGE trust

[Mortgage Pass-Through] [Asset-] Backed Certificates

[LOGO]

Sponsor and Seller [RWT Holdings]

[LOGO]
Seller [RRAC]

[LOGO]
Depositor

[LOGO]

Issuing Entity

PROSPECTUS SUPPLEMENT

[INSURER] [LOGO]

[UNDERWRITER(S)] [LOGO]

[Date of prospectus supplement]

Dealers will be required to deliver a prospectus supplement and prospectus when acting as underwriters of the certificates offered hereby and with respect to their unsold allotments or subscriptions. In addition, all dealers selling the certificates, whether or not participating in this offering, may be required to deliver a prospectus supplement and prospectus until ninety days after the date of this prospectus supplement.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PROSPECTUS

Sequoia Mortgage Funding Corporation

or

Sequoia Residential Funding, Inc.

(Depositor)

RWT Holdings, Inc.

(Sponsor)

$5,000,000

(Aggregate Amount)

Asset-Backed Securities

(Issuable in Series)

  Please carefully consider our discussion of some of the risks of investing in the securities under “Risk Factors” beginning on page 1.   The securities will represent obligations of or interests in the related issuing entity only and do not represent an interest in or obligation of either Sequoia Mortgage Funding Corporation or Sequoia Residential Funding, Inc., as the depositor, RWT Holdings, Inc., as the sponsor, or any of their affiliates. The Issuing Entities   Each issuing entity will be established to hold the assets transferred to it by the depositor, either Sequoia Mortgage Funding Corporation or Sequoia Residential Funding, Inc.  The assets of each issuing entity will be specified in the prospectus supplement and may consist of:   ·       residential mortgage loans secured by senior and junior liens on one-to-four family residential properties, including townhouses, condominiums and cooperative dwelling units; ·       various forms of credit enhancement of the types described in this base prospectus; and ·       other related assets described in this base prospectus.

The Securities

The depositor, either Sequoia Mortgage Funding Corporation or Sequoia Residential Funding, Inc., will sell the securities pursuant to a prospectus supplement.  The securities will be grouped into one or more series, each having its own distinct designation.  Each series will consist of either certificates representing interests in the assets of the related issuing entity or bonds secured by the issuing entity assets.

Offers of Securities

The securities may be offered through several different methods, including offerings through underwriters.

THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.

[____________ __, 201_]

IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS

AND EACH ACCOMPANYING PROSPECTUS SUPPLEMENT

Information about each series of securities is contained in two separate documents.

· this prospectus, which provides general information, some of which may not apply to a particular series; and

· the accompanying prospectus supplement for a particular series, which describes the specified terms of the securities of that series.

The prospectus supplement will contain information about a particular series that supplements the information contained in this prospectus.

We have not authorized anyone to provide you with information that is different from that contained in this prospectus and the accompanying prospectus supplement.

You can find a listing of the pages on which many of the terms used in this prospectus are defined under “Index of Defined Terms” beginning on page I-1 of this prospectus.

ii

TABLE OF CONTENTS

	Page No.
RISK FACTORS	1
Ratings on the Securities by the Rating Agencies May Not Accurately Reflect the Risks Associated With Those Securities	1
There Is No Source of Payments for Your Securities Other Than the Assets of the Issuing Entity and Any Credit Enhancements.	1
You Bear the Risk of Losses on the Mortgage Loans; Some Kinds of Mortgage Loans May Be Especially Prone to Default and Losses	1
Risks Related to Adjustable Rate Mortgage Loans	2
Risks Related to Mortgage Loans With Interest-Only Payments	4
Risks Related to Mortgage Loans That Provide for Negative Amortization	4
Special Default Risk of Second Lien Mortgage Loans	5
Risks Relating to Declines in Property Values and Second Lien Mortgage Loans	5
Risks Related to Simultaneous Second Liens and Other Borrower Debt	6
Special Assessments and Energy Efficiency Liens May Take Priority Over the Mortgage Lien	6
Balloon Loans	6
Mortgage Loans With High Original Loan-to-Value Ratios May Present a Greater Risk of Loss	6
Default Risk on High Balance Mortgage Loans	6
Geographic Concentration of Mortgage Loans	7
Aspects of the Mortgage Loan Origination Process May Result in Higher Expected Delinquencies	7
Our Due Diligence of the Mortgage Loans Supporting Your Securities May Not Reveal Aspects of Such Mortgage Loans Which Could Lead to Losses	8
Early or Multiple Payment Defaults May Be Indicative of Higher Rates of Delinquencies and Losses in the Future	9
Mortgage Loan Interest Rates May Limit Interest Rates on the Variable Rate Securities	9
Potential Inadequacy of Credit Enhancement	10
Effect of Creditworthiness of Primary Mortgage Insurers on Ratings of Securities	12
Risks Related to Any Interest Rate Swap Agreement	13
Effect of Creditworthiness of Swap Counterparty on Ratings of Securities	13
Special Risks for Certain Classes of Securities	13
You Will Be Subject to the Risks Associated With Potential Inadequate or Untimely Services From Third-Party Service Providers, Which May Adversely Impact Your Yield; You Will Also Be Dependent on Corporate Trustees to Act on Your Behalf in Enforcing Your Rights	14
Delay in Receipt of Liquidation Proceeds; Liquidation Proceeds May Be Less Than Mortgage Balance	14
There Are Risks Relating to Alternatives to Foreclosure	14
Delinquencies Due to Servicing Transfers	14
Military Action and Terrorist Attacks	15
Unpredictability and Effect of Prepayments	15
Violation of Various Federal, State and Local Laws May Result in Losses on the Mortgage Loans	16
Predatory Lending Laws/High Cost Loans	16
Financial Regulatory Legislative Reform and Related Regulations Could Have a Significant Impact	17
Bankruptcy or Insolvency Proceedings Could Delay or Reduce Payments on the Securities	18
Risks Related to Amounts in Pre-Funding Account(s) Being Applied to Pay Principal on the Securities	18
The Addition of Subsequent Mortgage Collateral to the Pre-Funding Account(s) During the Funding Period May Adversely Affect the Performance of the Securities	18
Risks Related to Owning Book-Entry Securities	18
Limited Ability to Resell Securities	19
The Securities May Not Be Suitable Investments	19
Owners of Original Issue Discount Securities Should Consider Federal Income Tax Consequences	19
THE SPONSOR AND THE SELLER	19
General	19
Sponsor’s Pre-Offering Review of the Mortgage Loans	20

iii

THE DEPOSITORS	20
THE ISSUING ENTITIES AND THE ISSUING ENTITY ASSETS	21
General	21
The Loans	23
Pre-Funding	28
USE OF PROCEEDS	29
LOAN PROGRAM	29
Underwriting Standards	29
Qualifications of Sellers	30
Quality Control	30
Representations and Warranties; Repurchases	31
Status of the Mortgage Loans and Related Assets in the Event of Insolvency of the Seller	33
DESCRIPTION OF THE SECURITIES	33
General	34
Distributions on Securities	36
Categories of Classes of Securities	37
Compensating Interest	40
Reports to Securityholders	40
Optional Termination	42
Optional Purchase of Securities	42
Other Purchases or Redemption	43
Book-Entry Registration of Securities	43
CREDIT ENHANCEMENT	46
General	46
Subordination	47
Derivative Instruments	48
Insurance Policies, Surety Bonds and Guaranties	48
Special Hazard Insurance Policies	49
Cross Support	49
Reserve Accounts	49
Pool Insurance Policies	50
Bankruptcy Bonds	51
Overcollateralization	51
Letter of Credit or Demand Note	51
DERIVATIVES	52
YIELD AND PREPAYMENT CONSIDERATIONS	53
Yield	53
Maturity and Prepayment	56
THE AGREEMENTS	58
Assignment of the Issuing Entity Assets	59
Servicing Provisions	60
Events of Default; Rights Upon Event of Default	70
The Pooling and Servicing Agreement	72
The Pooling and Servicing Agreement and Trustee	73
The Indenture	75
The Indenture Trustee	78
The Trust Agreement	79
The Custodial Agreement	80
The Trustees; Agents	81
Loss Mitigation Advisor; Investment Manager; Other Parties	81
CERTAIN LEGAL ASPECTS OF THE LOANS	82
General	82
Foreclosure/Repossession	83
Environmental Risks	85
Rights of Redemption	87
Anti-Deficiency Legislation; Tax Liens	87
Bankruptcy Laws	88
Due-on-Sale Clauses	89
Prepayment Charges and Prepayments	90
Applicability of Usury Laws	90
Servicemembers Civil Relief Act	91

iv

Junior Mortgages; Rights of Senior Mortgagees	91
Consumer Protection Laws	92
Financial Regulatory Legislative Reform and Related Regulations Could Have a Significant Impact	92
Forfeitures in Drug and RICO Proceedings	93
MATERIAL FEDERAL INCOME TAX CONSEQUENCES	93
General	93
Types of Securities	94
Taxation of Debt Securities Generally	94
REMIC Securities	99
Taxation of Regular Interest Securities	100
Taxation of Holders of Residual Interest Securities	101
Taxation of the REMIC	105
Non-REMIC Debt Securities	106
Special Tax Attributes	107
Withholding With Respect to Certain Foreign Investors	108
Backup Withholding	109
FATCA Tax Regime	110
Tax Return Disclosure Requirements	110
STATE TAX CONSIDERATIONS	110
ERISA CONSIDERATIONS	110
LEGAL INVESTMENT	116
METHOD OF DISTRIBUTION	117
LEGAL MATTERS	118
FINANCIAL INFORMATION	118
STATIC POOL INFORMATION	118
AVAILABLE INFORMATION	119
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE	119
RATING	120
INDEX OF DEFINED TERMS	I-1

v

RISK FACTORS

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the offered securities.  You should also carefully consider the information set forth under “Risk Factors” in the related prospectus supplement.

Ratings on the Securities by the Rating Agencies May Not Accurately Reflect the Risks Associated With Those Securities

The ratings on the securities depend primarily on an assessment by the rating agencies of the mortgage loans and other assets of the issuing entity, any credit enhancement and the ability of the servicers and the master servicer to service the loans.  Rating agencies rate debt securities based upon their assessment of the safety of the receipt of principal and interest payments.  Rating agencies do not consider the risks of fluctuations in fair value or other factors that may influence the value of debt securities and, therefore, the assigned credit rating may not fully reflect the true risks of an investment in the securities.  Credit rating agencies may change their methods of evaluating credit risk and determining ratings on securities backed by mortgage loans.  These changes may occur quickly and often.

The ratings of the securities by the rating agencies:

· only address the likelihood of receipt by holders of securities of distributions in the amount of scheduled payments on the mortgage loans;

· do not take into consideration any of the tax aspects associated with the securities;

· do not address the possibility that, as a result of principal prepayments, the yield on your securities may be lower than anticipated;

· do not address the payment of any basis risk shortfalls with respect to the securities; and

· do not comment as to the market price or suitability of the securities for a particular investor.

Ratings are not recommendations to buy, sell or hold the securities.  A rating may be changed or withdrawn at any time by the assigning rating agency.

There Is No Source of Payments for Your Securities Other Than the Assets of the Issuing Entity and Any Credit Enhancements.

The assets of the issuing entity together with any applicable credit enhancement are the sole source of payments on the related securities.  The securities are not the obligations of any other entity.  None of the sponsor, the seller, the depositor, any underwriter, the trustee, any administrator, any master servicer, any servicer or any of their affiliates will have any obligation to replace or supplement the credit enhancement, or take any other action to maintain the applicable ratings of the securities.  If credit enhancement is not available, holders of securities may suffer losses on their investments.

You Bear the Risk of Losses on the Mortgage Loans; Some Kinds of Mortgage Loans May Be Especially Prone to Default and Losses

Because your securities are backed by mortgage loans, your investment may be affected by losses incurred on the mortgage loans.  Losses on residential mortgage loans can occur for many reasons, including:  poor origination practices; fraud; faulty appraisals; documentation errors; poor underwriting; legal errors; poor servicing practices; weak economic conditions; increases in payments required to be made by borrowers; declines in the value of homes; earthquakes and other natural events; uninsured property loss; over-leveraging of the borrower; costs of remediation of environmental conditions, such as indoor mold; changes in zoning or building codes and the related costs of compliance; acts of war or terrorism; changes in legal protections for lenders; and other personal events affecting borrowers, such as reduction in income, job loss, divorce, or health problems.  To the extent your securities are not covered by credit enhancements, you will bear all of the risks resulting from losses on the mortgage loans.  In addition, several types of mortgage loans which have higher than average rates of default and loss may be included in the entity that issues your security, including adjustable rate, interest-only, negative amortization, second lien, balloon, high loan-to-value ratio, and high balance mortgage loans.

1

Risks Related to Adjustable Rate Mortgage Loans

Recently, an increasingly large proportion of residential mortgage loans originated in the United States have been adjustable rate mortgage loans, including loans that have interest-only or negative amortization features. Mortgage loans that are referred to generally as adjustable rate mortgage loans, or ARMs, may include any of the following types of loans:

· mortgage loans whose interest rate adjusts on the basis of a variable index plus a margin, with the initial adjustment occurring after a specified period of time from origination of the related mortgage loan and adjustments occurring periodically at specified intervals thereafter; these loans may or may not have a low introductory interest rate;

· “hybrid” mortgage loans, whose interest rate is fixed for the initial period specified in the related mortgage note, and thereafter adjusts periodically based on the related index plus a margin;

· “interest-only” mortgage loans, which provide for payment of interest at the related mortgage interest rate, but no payment of principal, for the period specified in the related mortgage note; thereafter, the monthly payment is increased to an amount sufficient to amortize the principal balance of the mortgage loan over the remaining term and to pay interest at the applicable mortgage interest rate;

· “negative amortization” mortgage loans, which may have a low introductory interest rate, and thereafter have a mortgage interest rate which adjusts periodically based on the related index plus a margin; however, the borrower is only required to make a minimum monthly payment which may not be sufficient to pay the monthly interest accrued, resulting in an increase to the principal balance of the mortgage loan by the amount of unpaid interest; and

· “option ARMs,” which combine several of the features described above and permit the borrower to elect whether to make a monthly payment sufficient to pay accrued interest and amortize the principal balance, make an interest-only payment or make a minimum payment that may be insufficient to pay accrued interest (with the unpaid interest added to the principal balance of the loan).

If specified in the related prospectus supplement, the issuing entity may include significant concentrations of these types of adjustable rate mortgage loans, which present special default and prepayment risks.

The primary attraction to borrowers of these adjustable rate mortgage loan products is that initial monthly mortgage loan payments can be significantly lower than fixed rate or level pay mortgage loans under which the borrower pays both principal and interest at an interest rate fixed for the life of the mortgage loan.  As a result, many borrowers have been able to incur substantially greater mortgage debt using one of these adjustable rate mortgage loan products than if they used a fixed rate mortgage loan.

In addition, many borrowers have used adjustable rate mortgage loan products to purchase homes that are comparatively larger or more expensive than they would otherwise have purchased with a fixed rate mortgage loan with relatively higher monthly payments.  These borrowers may have taken out these mortgage loan products in the expectation that either (1) their income will rise by the time their fixed rate period or interest-only period expires, thus enabling them to make the higher monthly payments, or (2) in an appreciating real estate market, they will be able to sell their property for a higher price or will be able to refinance the mortgage loan before the expiration of the fixed rate or interest-only period.

2

When evaluating a mortgage loan application from a prospective borrower for an adjustable rate or interest-only mortgage loan, many mortgage originators determined the amount of loan that borrower could afford based on the borrower’s initial scheduled monthly payments, or the scheduled monthly payments on the first mortgage interest rate reset date, rather than based on the adjusted monthly payments as of future mortgage interest reset dates (in the case of adjustable rate mortgage loans) or the principal amortization date (in the case of interest-only mortgage loans). These origination practices have been changed substantially beginning in 2007 with promulgation of guidelines by the Federal Reserve Board and state mortgage regulators and by the subsequent implementation of more conservative underwriting standards by originators. Unless otherwise specified in the related prospectus supplement, mortgage loan characteristics and debt-to-income ratios set forth in the prospectus supplement will reflect the scheduled mortgage loan payments due or being made as of the “cut-off date,” and will not reflect the mortgage loan payment resets that will occur during the life of the mortgage loan.

In recent years, mortgage interest rates have been at historically low levels.  If mortgage interest rates rise, borrowers will experience increased monthly payments on their adjustable rate mortgage loans.  As the fixed interest rates on hybrid mortgage loans expire and convert to adjustable rates, borrowers may find that the new minimum monthly payments are considerably higher and they may not be able to make those payments.

In addition, without regard to changes in interest rates, the monthly payments on mortgage loans with interest-only or negative amortization features will increase substantially when the principal must be repaid.

Any of these factors, or a combination of these factors, could cause adjustable rate mortgage loan defaults to increase substantially.

Borrowers who intend to avoid increased monthly payments by refinancing their mortgage loans may find that lenders may not in the future be willing or able to offer these adjustable rate mortgage loan products, or to offer these products at relatively low interest rates.  A further decline in housing prices generally or in certain regions of the United States could also leave borrowers with insufficient equity in their homes to permit them to refinance.  In addition, borrowers who intend to sell their properties on or before the expiration of the fixed rate periods or interest-only periods on their mortgage loans may find that they cannot sell their properties for an amount equal to or greater than the unpaid principal balance of their loans, especially in the case of negative amortization mortgage loans.  These events could cause borrowers to default on their mortgage loans.

Rising unemployment and slow wage growth in certain regions of the United States or generally could also impact the ability of many borrowers with adjustable rate mortgage loans to make the higher monthly payments resulting from the expiration of fixed rate periods or interest-only periods, or from increases in interest rates.  If borrowers become unemployed in a slowing economy, or if they find that expected increases in personal income have not occurred, they may be unable to make the higher monthly mortgage payments.

Any of the factors described above, alone or in combination, could adversely affect the yield on your securities. Depending upon the type of security purchased and the price paid, the adverse yield effect could be substantial.

See “— Risks Related to Mortgage Loans With Interest-Only Payments” and “— Risks Related to Mortgage Loans That Provide for Negative Amortization” for further discussion of adjustable rate mortgage loans with interest-only or negative amortization features, respectively.

3

Risks Related to Mortgage Loans With Interest-Only Payments

If specified in the related prospectus supplement, some of the mortgage loans to be included in the trust may provide for payment of interest at the related mortgage interest rate, but no payment of principal, for the period following origination specified in the related prospectus supplement.  Following the applicable interest-only period, the monthly payment with respect to each of these mortgage loans will be increased to an amount sufficient to amortize the principal balance of the mortgage loan over the remaining term and to pay interest at the applicable mortgage interest rate.

If applicable, the presence of these mortgage loans in the issuing entity may, absent other considerations, result in longer weighted average lives of the related securities than would have been the case had these loans not been included in the issuing entity.  In addition, borrowers may view the absence of any obligation to make a payment of principal during the interest-only period following origination specified in the related prospectus supplement as a disincentive to prepayment. Conversely, however, borrowers may be more likely to refinance their mortgage loans when the related interest-only period expires, resulting in increased prepayments.

After a borrower’s monthly payment has been increased to include principal amortization, and assuming the borrower does not refinance the related mortgage loan, delinquency or default may be more likely.

See also “— Risks Related to Adjustable Rate Mortgage Loans” for a discussion of risks related to interest-only mortgage loans and economic conditions.

Risks Related to Mortgage Loans That Provide for Negative Amortization

If specified in the related prospectus supplement, the issuing entity may include mortgage loans that provide for so-called “negative amortization.” Negative amortization mortgage loans generally provide the borrower with a low initial introductory interest rate.  Thereafter, the mortgage interest rate is calculated at the index specified in the related mortgage note plus the applicable margin.  However, the borrower is only required to make (or may elect to make) for the period specified in the related mortgage note a minimum monthly payment on the mortgage loan that may be sufficient to amortize the principal balance of the mortgage loan over the remaining term but not to pay all accrued interest, or may be insufficient to pay accrued interest and not amortize the principal balance at all.

At the end of this initial period, and periodically thereafter, the borrower’s minimum monthly payment is adjusted to reflect the prevailing interest rate, consisting of the current applicable index plus the applicable margin, plus a principal amount sufficient to amortize the mortgage loan over the remaining applicable term.  Typically, the borrower’s monthly payment will not be increased or decreased by more than a periodic cap and is subject to a maximum interest rate, as specified in the related mortgage note.  Nevertheless, although each recalculated monthly payment will be based on the prevailing rate of the applicable index at the time of the payment adjustment date, this index may continue to adjust up or down throughout the course of the period in which the monthly payments do not adjust.

During a period of rising interest rates, as well as before the annual adjustment to the minimum monthly payment made by the borrower, the amount of interest accruing on the principal balance of the related mortgage loan may exceed the amount of the scheduled monthly payment.  As a result, a portion of the accrued interest on the related mortgage loan may become deferred interest that will be added to its principal balance and will also bear interest at the applicable interest rate.

In addition, the amount by which a monthly payment may be adjusted on a payment adjustment date is generally limited and may not be sufficient to amortize fully the unpaid principal balance of a negative amortization mortgage loan over its remaining term to maturity.

Generally, under the circumstances and at the intervals provided in the related mortgage note, the monthly payment due on a negative amortization mortgage loan will be “recast” without regard to the related payment cap in order to provide for payment of the outstanding balance of the mortgage loan over its remaining term.

4

In summary, as interest rates increase (or, in some cases, even if market interest rates remain stable), the principal balance of a negative amortization mortgage loan will increase over time, thereby increasing the monthly payments to be paid by the borrower when principal must be repaid, making refinancing more difficult and increasing the potential adverse effect of macroeconomic trends.  See “— Risks Related to Adjustable Rate Mortgage Loans” above.

In addition, any deferral of interest on negative amortization mortgage loans will result in a reduction of the amount of interest available to be distributed as interest to the securities.  If specified in the related prospectus supplement, the reduction in interest collections may be offset, in part, by applying certain prepayments received on the mortgage loans to interest payments on the securities.  In that case, the excess of any deferred interest on the mortgage loans over the prepayments received on the mortgage loans, or net deferred interest, will be allocated among the classes of securities in an amount equal to the excess of the interest accrued on each such class at its applicable interest rate over the amount of interest that would have accrued if the applicable interest rate for each class had been equal to a rate adjusted for net deferred interest on the related mortgage loans, as described in the related prospectus supplement.  Any such allocation of net deferred interest could, as a result, affect the weighted average maturity of the affected class of securities.

Special Default Risk of Second Lien Mortgage Loans

If the related prospectus supplement specifies that the issuing entity includes mortgage loans that are secured by second liens on the related mortgaged properties, these second lien mortgage loans will be subordinate to the rights of the mortgagee under the related first mortgages.  Generally, the holder of a second lien mortgage loan will be subject to a loss of its mortgage if the holder of the first mortgage is successful in foreclosure of its mortgage, because no second liens or encumbrances survive such a foreclosure.  In addition, due to the priority of the first mortgage, the holder of the second lien mortgage may not be able to control the timing, method or procedure of any foreclosure action relating to the mortgaged property.  Furthermore, any liquidation, insurance or condemnation proceeds received on the second lien mortgage will be available to satisfy the outstanding balance of the mortgage loan only to the extent that the claim of the related first mortgage has been satisfied in full, including any foreclosure costs.  Accordingly, if liquidation proceeds are insufficient to satisfy the mortgage loan secured by the second lien and all prior liens in the aggregate, and if the credit enhancement provided by any excess interest and overcollateralization (if applicable) has been exhausted or is otherwise unavailable to cover the loss, securityholders will bear the risk of delay in payments while any deficiency judgment against the borrower is sought and the risk of loss if the deficiency judgment is not pursued, cannot be obtained or is not realized for any other reason.

Risks Relating to Declines in Property Values and Second Lien Mortgage Loans

An overall decline in residential real estate prices could adversely affect the values of the mortgaged properties and cause the outstanding principal balances of the second lien mortgage loans, together with the senior lien mortgage loans secured by the same mortgaged properties, to equal or exceed the value of the mortgaged properties. This type of a decline would adversely affect the position of a second mortgagee before having the same effect on the related first mortgagee. A rise in interest rates over a period of time and the general condition of a mortgaged property as well as other factors may have the effect of reducing the value of the mortgaged property from the appraised value at the time the second lien mortgage loan was originated. If there is a reduction in the value of a mortgaged property, the ratio of the sum of the principal balances of the second lien mortgage loan and the related first lien mortgage loan to the value of the mortgaged property may increase, reducing the likelihood of liquidation or other proceeds being sufficient to satisfy the second lien mortgage loan after satisfaction of the senior lien.

5

 Risks Related to Simultaneous Second Liens and Other Borrower Debt

At the time of origination of any first lien mortgage loans in the issuing entity, the originators or other lenders may also have made second lien loans to the same borrowers that may or may not be included in the issuing entity.  In addition, other borrowers whose first lien loans are included in the issuing entity may have obtained secondary mortgage financing following origination of the first lien loans.  In addition, borrowers may increase their aggregate indebtedness substantially by assuming consumer debt of various types.  Consequently, investors should consider that borrowers who have less equity in their homes, or who have substantial mortgage and consumer indebtedness, may be more likely to default and may be more likely to submit to foreclosure proceedings.

In addition, the nature of any second lien may influence the prepayment characteristics of the first lien included in the issuing entity.  Borrowers may be more likely to refinance and prepay the first lien when any secondary mortgage financing becomes due in full, and consequently investors should be aware that the rate of prepayment of the first lien mortgage loans in the issuing entity may be affected by any associated second lien loans.

Special Assessments and Energy Efficiency Liens May Take Priority Over the Mortgage Lien

Mortgaged properties securing the mortgage loans may be subject to the lien of special property taxes and/or special assessments. These liens are superior to the liens securing the mortgage loans, irrespective of the date of the mortgage. In some instances, individual borrowers may be able to elect to enter into contracts with governmental agencies for Property Assessed Clean Energy (PACE) or similar assessments that are intended to secure the payment of energy and water efficiency and distributed energy generation improvements that are permanently affixed to their properties, possibly without notice to or the consent of the mortgagee. These assessments also have lien priority over the mortgages securing mortgage loans. No assurance can be given that any mortgaged property so assessed will increase in value to the extent of the assessment lien. Additional indebtedness secured by the assessment lien would reduce the amount of the value of the mortgaged property available to satisfy the affected mortgage loan.

Balloon Loans

If specified in the related prospectus supplement, the mortgage loans to be included in the issuing entity may include balloon loans.  Balloon loans pose a special payment risk because the borrower must pay a large lump sum payment of principal at the end of the loan term.  If the borrower is unable to pay the lump sum or refinance such amount, you may suffer a loss if the collateral for the loan is insufficient and the other forms of credit enhancement are insufficient or unavailable to cover the loss.

Mortgage Loans With High Original Loan-to-Value Ratios May Present a Greater Risk of Loss

As specified in the related prospectus supplement, a certain number of mortgage loans included in the issuing entity may have original loan-to-value ratios of greater than 80%.  Mortgage loans with high loan-to-value ratios, particularly those in excess of 100%, may be more likely to experience default and foreclosure than mortgage loans with low original loan-to-value ratios.

Moreover, mortgage loans with high original loan-to-value ratios are more likely to be subject to a judicial reduction of the loan amount in bankruptcy or other proceedings than mortgage loans with lower original loan-to-value ratios.  If a court relieves a borrower’s obligation to repay amounts otherwise due on a mortgage loan, none of the servicers or the master servicer will be required to advance funds in respect of relieved amounts, and any related loss may reduce the amount available to be paid to securityholders.  In such event, holders of subordinate classes of securities may suffer losses.

Default Risk on High Balance Mortgage Loans

If specified in the related prospectus supplement, a certain percentage of the mortgage loans included in the issuing entity may have a principal balance as of the cut-off date in excess of $1,000,000.  You should consider the risk that the loss and delinquency experience on these high balance loans may have a disproportionate effect on the issuing entity as a whole.

6

Geographic Concentration of Mortgage Loans

The mortgage loans to be included in the issuing entity may be concentrated in one or more states, as specified in the related prospectus supplement.  The rate of delinquencies, defaults and losses on the mortgage loans may be higher than if fewer of the mortgage loans were concentrated in those states because the following conditions will have a disproportionate impact on the mortgage loans in general:

· weak economic conditions in these locations or any other location (which may or may not affect real property values), may affect the ability of borrowers to repay their mortgage loans

on time, particularly in the case of  “option ARMs”, interest-only loans and loans that provide for negative amortization;

· properties in certain jurisdictions may be more susceptible than homes located in other parts of the country to certain types of uninsurable hazards, such as earthquakes, as well as floods, hurricanes, wildfires, mudslides and other natural disasters;

· declines in the residential real estate market of a particular jurisdiction may reduce the values of properties located in that jurisdiction, which would result in an increase in the loan-to-value ratios or combined loan-to-value ratios, as the case may be, particularly in the case of “option ARMs”, interest-only loans and loans that provide for negative amortization; and

· any increase in the market value of properties located in a particular jurisdiction would reduce the loan-to-value ratios or combined loan-to-value ratios, as the case may be, of the mortgage loans and could, therefore, make alternative sources of financing available to the borrowers at lower interest rates, which could result in an increased rate of prepayment of the mortgage loans.

Natural disasters, such as wildfires, severe storms and flooding affecting regions of the United States from time to time may result in prepayments of mortgage loans.

For additional information regarding the geographic concentration of the mortgage loans to be included in the issuing entity, see the geographic distribution table or tables in the related prospectus supplement.

Aspects of the Mortgage Loan Origination Process May Result in Higher Expected Delinquencies

Various factors in the process of originating the mortgage loans assigned or pledged to the trust may have the effect of increasing delinquencies and defaults on the mortgage loans.  These factors may include any or all of the following:

Appraisal Quality.  During the mortgage loan underwriting process, appraisals are generally obtained on each prospective mortgaged property.  The quality of these appraisals may vary widely in accuracy and consistency.  In some cases, the appraiser may feel pressure from the lender to provide an appraisal in the amount necessary to enable the originator to make the loan, whether or not the value of the property justifies such an appraised value.  In addition, in some cases, the lender may not require a full appraisal for the prospective mortgaged property or it may use an automated valuation model, which is a computer generated appraisal report created using formulas based on various factors, including sales trends, title records, neighborhood analysis, tax assessments and other available information regarding the prospective mortgaged property.  Inaccurate or inflated appraisals may result in an increase in the number and severity of losses on the mortgage loans.

7

Underwriting Guideline Exceptions. Although mortgage originators generally underwrite mortgage loans in accordance with their pre-determined loan underwriting guidelines, from time to time and in the ordinary course of business, originators will make exceptions to these guidelines.  Loans originated with exceptions may result in a higher number of delinquencies and loss severities than loans originated in strict compliance with the designated underwriting guidelines.

Non-owner Occupied Properties. Mortgage loans secured by properties acquired by investors for the purposes of rental income or capital appreciation, or properties acquired as second homes, tend to have higher frequency of default and/or higher loss severities than properties that are regularly occupied by the related borrowers.  In a default, real property investors who do not reside in the mortgaged property may be more likely to abandon the related mortgaged property, increasing the severity of the default.

Fraud.  Fraud committed in the origination process may increase delinquencies and defaults on the mortgage loans.  For example, a borrower may present fraudulent documentation to a lender during the mortgage loan underwriting process, which may enable the borrower to obtain a mortgage loan in an amount or with terms for which the borrower would not otherwise qualify.  In addition, increasingly frequent incidences of identity theft involving borrowers, particularly in the case of mortgage loans originated under streamlined origination programs, may result in an increased number of fraudulent mortgage loans that are not secured by a mortgaged property.  You should consider the potential effect of fraud by borrowers and other third parties on the yield on your securities.

Self-employed Borrowers.  Self-employed borrowers may be more likely to default on their mortgage loans than salaried or commissioned borrowers and generally have less predictable income.  In addition, many self-employed borrowers are small business owners who may be personally liable for their business debt.  Consequently, you should consider that a higher number of self-employed borrowers may result in increased defaults on the mortgage loans in the issuing entity.

First-time Borrowers.  First-time homebuyers are often younger, have shorter credit histories, are more highly leveraged and have less experience with undertaking mortgage debt and maintaining a residential property than other borrowers.  The presence of loans to first time buyers in the mortgage pool may increase the number of defaults on the mortgage loans.

Although the aspects of the mortgage loan origination process described above may be indicative of the performance of the mortgage loans, information regarding these factors may not be available for the mortgage loans held by the issuing entity, unless specified in the prospectus supplement.

See “Loan Program — Underwriting Standards” in this prospectus and see the prospectus supplement for a description of the characteristics of the related mortgage loans and for a general description of the underwriting guidelines applied in originating the related mortgage loans.

Our Due Diligence of the Mortgage Loans Supporting Your Securities May Not Reveal Aspects of Such Mortgage Loans Which Could Lead to Losses

We undertake due diligence efforts with respect to various aspects of the mortgage loans that support your securities, including investigating the strengths and weaknesses of the originator and servicer of the loans and verifying certain aspects of the underlying loans themselves as well as other factors and characteristics that may be material to the performance of the loans.  In making the assessment and otherwise conducting due diligence, we rely on resources available to us and, in some cases, investigation by third parties.  There can be no assurance that any due diligence process that we conduct will uncover relevant facts that could be determinative of how the mortgage loans will perform.  Moreover, our ability to mitigate losses on mortgage loans transferred to an issuing entity is significantly limited by contractual and other constraints of the securitization structure in which such loans are held, including REMIC rules.

8

Early or Multiple Payment Defaults May Be Indicative of Higher Rates of Delinquencies and Losses in the Future

As specified in the related prospectus supplement, a certain number of mortgage loans included in the issuing entity may be delinquent as of the applicable cut-off date or may have been delinquent in payment in the last twelve months on one or more due dates.

Prior delinquencies and, in particular, first or early payment defaults, may be an indication of underwriting errors in assessing the financial means and/or credit history of the borrower or of an adverse change in the financial status of the borrower.  These mortgage loans are likely to experience rates of delinquency, foreclosure and bankruptcy that are higher, and that may be substantially higher, than those experienced by mortgage loans whose borrowers have more favorable payment histories

Mortgage Loan Interest Rates May Limit Interest Rates on the Variable Rate Securities

The securities generally will have either fixed or variable interest rates.  However, as specified in the related prospectus supplement, the interest rates on your securities may be subject to certain limitations, generally based on the weighted average interest rates of the mortgage loans in the issuing entity or as otherwise described in the related prospectus supplement, net of certain allocable fees and expenses of the issuing entity and any payments owed on derivative instruments.  The mortgage loans to be included in the issuing entity will have interest rates that either are fixed or adjust based on a variable index, as described in the related prospectus supplement.

Any adjustable rate mortgage loans in the issuing entity may also have periodic maximum and minimum limitations on adjustments to their interest rates, and may have the first adjustment to their interest rates a number of years after their first payment dates.  In addition, adjustable rate mortgage loans generally have lifetime maximum interest rates.  As a result, your variable rate securities may accrue less interest than they would accrue if their interest rates were solely based on the specified index plus the specified margin.

A variety of factors could limit the interest rates and adversely affect the yields to maturity on the variable rate securities.  Some of these factors are described below.

The interest rates for your securities may adjust monthly based on the one-month LIBOR index or another index, while the interest rates on the mortgage loans to be included in the issuing entity may either adjust less frequently, adjust based on a different index or not adjust at all.  Consequently, the limits on the interest rates on these securities may prevent increases in the interest rates for extended periods in a rising interest rate environment.

The interest rates on adjustable rate mortgage loans may respond to economic and market factors that differ from those that affect the one-month LIBOR index or the index applicable to your variable rate securities.  It is possible that the interest rates on any adjustable rate mortgage loans may decline while the interest rates on the related securities are stable or rising.  It is also possible that the interest rates on any adjustable rate mortgage loans and the interest rates on the related securities may both decline or increase during the same period, but that the interest rates on your securities may decline or may increase more slowly or rapidly.

To the extent that fixed rate or adjustable rate mortgage loans are subject to default or prepayment, the interest rates on the related securities may be reduced as a result of the net funds cap limitations described in the related prospectus supplement.

See “Yield and Prepayment Considerations” in this prospectus and see the prospectus supplement for a description of the interest rates applicable to your securities and for a general description of the interest rates of the related mortgage loans.

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Potential Inadequacy of Credit Enhancement

If specified in the related prospectus supplement, the features of subordination and loss allocation, excess interest, overcollateralization and limited cross-collateralization, together with any primary mortgage insurance and financial guaranty insurance policies, are intended to enhance the likelihood that holders of more senior classes of securities will receive regular payments of interest and principal, but are limited in nature and may be insufficient to cover all losses on the related mortgage loans.

Subordination and Allocation of Losses.  If the applicable subordination is insufficient to absorb losses, then securityholders will likely incur losses and may never receive all of their principal payments.  You should consider that:

· if you buy a subordinate security and losses on the related mortgage loans exceed the total principal amount of any securities subordinate to your securities (if any), plus, if applicable to the issuing entity and as specified in the related prospectus supplement, any excess interest and any overcollateralization that has been created, the principal amount of your securities will be reduced proportionately with the principal amounts of the other securities of your class by the amount of that excess; and

· if specified in the related prospectus supplement, after the total principal amount of the subordinate securities has been reduced to zero, losses on the mortgage loans may reduce the principal amounts (or notional amounts) of the senior securities.

Losses on the related mortgage loans will reduce the loss protection provided by the subordinate securities to the senior securities and will increase the likelihood that the senior securities will not receive all of their expected principal payments.

If the securities have the benefit of overcollateralization and excess interest, and if overcollateralization is maintained at the required amount and the related mortgage loans generate interest in excess of the amount needed to pay interest and principal on your securities, the fees and expenses of the issuing entity and any payments owed to a derivatives counterparty, then excess interest may be used to pay you and the other securityholders of the related securities the amount of any reduction in the aggregate principal balance of the mortgage loans caused by application of losses.  These payments will generally be made in order of seniority.  We cannot assure you, however, that any excess interest will be generated and, in any event, unless otherwise specified in the related prospectus supplement, no interest will be paid to you on the amount by which the principal amount of your securities was reduced because of the application of losses.

Overcollateralization. If the securities have the benefit of excess interest and overcollateralization, as specified in the related prospectus supplement, then in order to create and maintain overcollateralization, it will be necessary that the mortgage loans generate more interest than is needed to pay interest on the related securities, as well as any fees and expenses of the issuing entity and any payments owed to a derivative counterparty.  If the securities have the benefit of excess interest and/or overcollateralization, we expect that the mortgage loans will generate more interest than is needed to pay those amounts, at least during certain periods, because the weighted average of the interest rates on the mortgage loans is expected to be higher than the weighted average of the interest rates on the related securities plus the weighted average aggregate expense rate.  Any remaining interest generated by the mortgage loans will be used to absorb losses on the mortgage loans and to maintain overcollateralization.  In addition, on the closing date, the total scheduled principal balance of the mortgage loans may exceed the total principal amount of the securities.  This excess is referred to as “overcollateralization“ and will be available to absorb losses.  We cannot assure you, however, that the mortgage loans will generate enough excess interest to maintain this overcollateralization level as set by the applicable rating agencies.  In addition, there may be no amounts available from any interest rate derivative agreement described in the related prospectus supplement to cover shortfalls.  The following factors will affect the amount of excess interest that the related mortgage loans will generate:

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Every time a mortgage loan is prepaid in whole or in part, total excess interest after the date of prepayment will be reduced because that mortgage loan will no longer be outstanding and generating interest or, in the case of a partial prepayment, will be generating less interest.  The effect of this reduction on your securities will be influenced by the amount of prepaid loans and the characteristics of the prepaid loans.  Prepayment of a disproportionately high number of high interest rate mortgage loans would have a greater negative effect on future excess interest.

If the rates of delinquencies, defaults or losses on the mortgage loans turn out to be higher than expected, excess interest available for overcollateralization or to absorb losses will be reduced.  Every time a mortgage loan is liquidated or charged off, excess interest will be reduced because that mortgage loan will no longer be outstanding and generating interest.

Limited Cross-Support.  The issuing entity may contain two or more separate mortgage pools, as specified in the related prospectus supplement.  Principal payments on the senior securities will depend, for the most part, on collections on the mortgage loans in the related pool.  However, as specified in the related prospectus supplement, the senior securities may have the benefit of credit enhancement in the form of subordination from one or more of the other pools.  That means that even if the rate of losses on mortgage loans in the pool related to your class of senior securities is low, losses in an unrelated pool may reduce the loss protection for your securities.

Interest Rate Derivative Agreements.  If specified in the related prospectus supplement, any amounts received under any interest rate cap or swap agreement will generally be applied as described in the related prospectus supplement to pay interest shortfalls and, if applicable, to maintain overcollateralization and cover losses.  However, we cannot assure you that any amounts will be received under that interest rate derivative agreement, or that any such amounts that are received will be sufficient to maintain any required overcollateralization or to cover interest shortfalls and losses on the mortgage loans.

Primary Mortgage Insurance.  If specified in the related prospectus supplement, some of the first lien mortgage loans which have original loan-to-value ratios greater than 80% may be covered by existing borrower- or lender-paid primary mortgage insurance policies.  The existing borrower- or lender-paid primary mortgage insurance policies will generally have the effect of reducing the original loan-to-value ratios of those covered mortgage loans to the percentage or percentages specified in the related prospectus supplement.

In addition, if specified in the related prospectus supplement, one or more loan-level primary mortgage insurance policies may be acquired on behalf of the issuing entity from primary mortgage insurance providers, providing the initial insurance coverage specified in the related prospectus supplement for those first lien mortgage loans with original loan-to-value ratios greater than 80%.

These loan-level primary mortgage insurance policies will generally have the effect of reducing the original loan-to-value ratios of those covered mortgage loans to the percentage specified in the related prospectus supplement.

However, these policies will only cover first lien mortgage loans and will be subject to various other limitations and exclusions.  In addition, borrower-paid primary mortgage insurance may be subject to cancellation by the related borrower.  As a result, coverage may be rescinded or denied on some mortgage loans.  Primary mortgage insurance providers will generally curtail the insured payments on a foreclosed mortgage loan if the related servicer does not foreclose that mortgage loan within a limited time period determined by the insurance provider.  In addition, because the amount of coverage under these policies depends on the loan-to-value ratio of the related mortgaged property at the inception of these policies, a decline in the value of the related mortgaged property will not result in increased coverage, and the issuing entity may still suffer a loss on a covered mortgage loan.  Accordingly, these primary mortgage insurance policies will provide only limited protection against losses on the mortgage loans.

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Effect of Creditworthiness of Primary Mortgage Insurers on Ratings of Securities

If the related prospectus supplement specifies that one or more loan-level primary mortgage insurance policies have been acquired on behalf of the issuing entity from one or more primary mortgage insurance providers, then the ratings assigned to your securities by the applicable rating agencies will be based in part on the financial strength ratings assigned to the insurer or insurers providing the primary mortgage insurance coverage described above.  However, these financial strength ratings assigned to the insurer or insurers could be qualified, reduced or withdrawn at any time.  In addition, you should consider that a credit rating does not assure you that the insurer or insurers will not default on their obligations.

Any qualification, reduction or withdrawal of the financial strength ratings assigned to the insurer or insurers could result in reduction of the ratings assigned to your securities, which could in turn affect the liquidity and market value of your securities.

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Risks Related to Any Interest Rate Swap Agreement

If the related prospectus supplement specifies that the issuing entity or related supplemental interest issuing entity includes one or more interest rate swap agreements, then any net swap payment payable to the swap counterparty under the terms of those interest rate swap agreements will reduce amounts available for payment to securityholders, and may reduce payments of interest on the securities. If the rate of prepayments on the mortgage loans is faster than anticipated, the scheduled notional amounts on which payments due under the interest rate swap agreements are calculated may exceed the total principal balance of the mortgage loans, thereby increasing the relative proportion of interest collections on the mortgage loans that must be applied to make swap payments to the swap counterparty and, under certain circumstances, requiring application of principal received on the mortgage loans to make net swap payments to the swap counterparty. Therefore, a rapid rate of prepayments during periods in which the issuing entity makes net payments to a swap counterparty could adversely affect the yields on the securities.

Effect of Creditworthiness of Swap Counterparty on Ratings of Securities

If the related prospectus supplement specifies that the issuing entity includes one or more interest rate swap agreements, in the event that the issuing entity, after application of all interest and principal received on the related mortgage loans, cannot make the required swap payments to the swap counterparty, a swap termination payment as described in the related prospectus supplement may be owed to the swap counterparty.  Any termination payment payable to the swap counterparty in the event of early termination of any interest rate swap agreement will likely reduce amounts available for payment to securityholders.

If the related prospectus supplement specifies that the issuing entity includes one or more interest rate swap agreements, the ratings on your securities will be dependent in part upon the credit ratings of the swap counterparty or its credit support provider.  If a credit rating of the swap counterparty or its credit support provider is qualified, reduced or withdrawn, or if the swap counterparty or its credit support provider defaults on its obligations, and a substitute counterparty or credit support provider is not obtained in accordance with the terms of the interest rate swap agreement, the ratings of your securities may be qualified, reduced or withdrawn.  In such event, the value and marketability of those securities will be adversely affected.

Special Risks for Certain Classes of Securities

The related prospectus supplement may specify that certain classes of securities are interest-only or principal-only securities.  These securities will have yields to maturity (or early termination) — the yield you will receive if you hold a security until it has been paid in full — that are highly sensitive to prepayments on the related mortgage loans.

If you purchase any of these classes of securities, you should consider the risk that you may receive a lower than expected yield under the following circumstances:

· in the case of any interest-only securities, a faster than expected rate of prepayments on the mortgage loans in the issuing entity; and

· in the case of any principal-only securities, a slower than expected rate of prepayments on the mortgage loans in the issuing entity.

Prepayments on the mortgage loans, including liquidations, purchases and insurance payments, could result in the failure of investors in any interest-only securities to fully recover their initial investments.  Prepayments on the mortgage loans may occur as a result of solicitations of the borrowers by mortgage loan providers, including the seller and its affiliates and any master servicer or servicer.

Exercise by a party that has a right to purchase the mortgage loans, as described in the related prospectus supplement, will adversely affect the yields on any interest-only securities.

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You Will Be Subject to the Risks Associated With Potential Inadequate or Untimely Services From Third-Party Service Providers, Which May Adversely Impact Your Yield; You Will Also Be Dependent on Corporate Trustees to Act on Your Behalf in Enforcing Your Rights

The mortgage loans underlying your securities will be serviced by third-party service providers. Should a servicer experience financial difficulties, it may not be able to perform these obligations. Servicers who have sought bankruptcy protection may, due to application of provisions of bankruptcy law, not be required to make advance payments to you of amounts due from loan obligors. Even if a servicer were able to advance amounts in respect of delinquent loans, its obligation to make the advances may be limited to the extent that it does not expect to recover the advances due to the deteriorating credit or other characteristics of delinquent loans. In addition, as with any externally provided service, there are risks associated with potential inadequate or untimely services for other reasons. Servicers may not advance funds that would ordinarily be due because of errors, miscalculations, or other reasons. Many borrowers require notices and reminders to keep their loans current and to prevent delinquencies and foreclosures, which servicers may fail to provide. In the current economic environment, many servicers are experiencing higher volumes of delinquent loans than they have in the past and, as a result, there is a risk that their operational infrastructures cannot properly process the increased volume.

You will also be dependent on corporate trustees to act on behalf of you and other holders of securities in enforcing your rights.  Under the terms of most securities, you do not have the right to directly enforce remedies against the issuer of the security, but instead must rely on a trustee to act on behalf of you and other security holders.  Should a trustee not be required to take action under the terms of the securities, or fail to take action, you could experience losses.

Delay in Receipt of Liquidation Proceeds; Liquidation Proceeds May Be Less Than Mortgage Balance

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

There Are Risks Relating to Alternatives to Foreclosure

Certain mortgage loans are or may become delinquent after the closing date.  A servicer may either foreclose on a delinquent mortgage loan or, under certain circumstances, work out an agreement with the related mortgagor, which may involve waiving or modifying any term of the mortgage loan or charging off a portion of the principal of the mortgage loan.  The servicer may also permit a “short sale” of the mortgaged property for less than the amount due on the mortgage loans or sell the mortgage loan for less than the amount due on the mortgage loan.  If a servicer extends the payment period or accepts a lesser amount than stated in the mortgage note in satisfaction of the mortgage note or charges off or sells the mortgage loan, your yield may be reduced.

Delinquencies Due to Servicing Transfers

Servicing of mortgage loans may be transferred in the future to other servicers in accordance with the provisions of the pooling and servicing agreement or sale and servicing agreement, as applicable, and the related servicing agreement as a result of, among other things, (1) the occurrence of unremedied events of default in servicer performance under a servicing agreement or (2) the exercise by the seller of its right to terminate a servicer without cause.

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All transfers of servicing involve some risk of disruption in collections due to data input errors, misapplied or misdirected payments, inadequate borrower notification, system incompatibilities and other reasons.  As a result, the affected mortgage loans may experience increased delinquencies and defaults, at least for a period of time, until all of the borrowers are informed of the transfer and the related servicing mortgage files and records and all the other relevant data has been obtained by the new servicer.  There can be no assurance as to the extent or duration of any disruptions associated with the transfer of servicing or as to the resulting effects on the yields on the securities.

Military Action and Terrorist Attacks

The effects that military action by U.S. forces in Afghanistan or other regions, terrorist attacks in the United States or other incidents and related military action may have on the performance of the mortgage loans in the issuing entity or on the values of mortgaged properties cannot be determined at this time.  Investors should consider the possible effects on delinquency, default and prepayment experience of the related mortgage loans.  Federal agencies and non-government lenders may defer, reduce or forgive payments and delay foreclosure proceedings in respect of loans to borrowers affected in some way by possible future events.  In addition, the activation of additional U.S. military reservists or members of the National Guard may significantly increase the proportion of mortgage loans whose mortgage rates are reduced by application of the Servicemembers Civil Relief Act, as amended, or similar state or local laws.  The amount of interest available for payment to securityholders will be reduced by any reductions in the amount of interest collectible as a result of application of the Servicemembers Civil Relief Act, as amended, or similar state or local laws and no servicer, master servicer nor any other party will be required to fund any interest shortfall caused by any such reduction.

Unpredictability and Effect of Prepayments

The rate of prepayments on the mortgage loans will be sensitive to prevailing interest rates.  Generally, if prevailing interest rates decline, mortgage loan prepayments may increase due to the availability of refinancing at lower interest rates.  If prevailing interest rates rise, prepayments on the mortgage loans may decrease.

Borrowers may prepay their mortgage loans in whole or in part at any time; however, some or all of the mortgage loans to be included in the issuing entity may require the payment of a prepayment premium in connection with any voluntary prepayments in full, and certain voluntary prepayments in part, made during periods ranging from the periods specified in the related prospectus supplement.  These prepayment premiums may discourage borrowers from prepaying their mortgage loans during the applicable period.

Prepayments on the mortgage loans may occur as a result of solicitations of the borrowers by mortgage loan originators, the servicer or servicers, as applicable, and any master servicer.  In addition, the availability of newer mortgage products with more flexible payment terms or that require lower monthly payments, such as “option ARMs,” may result in an increase in the number of borrowers who prepay their mortgage loans to take advantage of new products.

The timing of prepayments of principal may also be affected by liquidations of or insurance payments on the mortgage loans.  In addition, RRAC, as the seller of the mortgage loans to the depositor, or such other seller as specified in the related prospectus supplement, may be required to purchase mortgage loans from the issuing entity in the event that certain breaches of representations and warranties made with respect to the mortgage loans are not cured.  These purchases will have the same effect on securityholders as prepayments of mortgage loans.

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A prepayment of a mortgage loan will usually result in a payment of principal on the securities:

· If you purchase securities at a discount, especially any principal-only securities, and principal prepayments on the related mortgage loans are received at a rate slower than you anticipate, then your yield may be lower than you anticipate.

· If you purchase securities at a premium, especially any interest-only securities, and principal prepayments on the related mortgage loans are received at a rate faster than you anticipate, then your yield may be lower than you anticipate.

The prepayment experience of the mortgage loans to be included in the issuing entity may differ significantly from that of other first and second lien residential mortgage loans.

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

Violation of Various Federal, State and Local 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 lenders.  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 mortgage loans.

Mortgage loans are also subject to various federal laws, including:

· the federal Truth-in-Lending Act and Regulation Z promulgated thereunder, which require certain disclosures to borrowers regarding the terms of their 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 borrower’s credit experience.

Violations of certain provisions of these federal laws may limit the ability of the servicers to collect all or part of the principal of or interest on the related mortgage loans and in addition could subject the issuing entity to damages and administrative enforcement.

The related seller of the mortgage loans will make or assign a representation in the mortgage loan sale agreement described in the related prospectus supplement that each mortgage loan was originated in compliance with applicable federal, state and local laws and regulations.  In the event of a breach of this representation, that seller or other party described in the related prospectus supplement will be obligated to cure the breach or repurchase or replace the affected mortgage loan in the manner described in the related prospectus supplement and under “LOAN PROGRAM—Representations by Sellers; Repurchases” in this prospectus.

Predatory Lending Laws/High Cost Loans

Various federal, state and local laws have been enacted that are designed to discourage predatory lending practices.  The federal Home Ownership and Equity Protection Act of 1994, commonly known as HOEPA, prohibits inclusion of certain provisions in mortgage loans that have mortgage rates or origination costs in excess of prescribed levels, and requires that borrowers be given certain disclosures prior to the origination of mortgage loans.  Some states have enacted, or may enact, similar laws or regulations, which in some cases impose restrictions and requirements greater than those in HOEPA.

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In addition, under the anti-predatory lending laws of some states, the origination of certain mortgage loans (including loans that are not classified as “high cost” loans under applicable law) must satisfy a net tangible benefits test with respect to the related borrower.  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 related originator reasonably believed that the test was satisfied.

Failure to comply with these laws, to the extent applicable to any of the mortgage loans, could subject the issuing entity, as an assignee of the related mortgage loans, to monetary penalties and could result in the borrowers rescinding the affected 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 have included numerous participants within the secondary mortgage market, including some securitization trusts.

The seller will make or assign a representation that the issuing entity does not include any mortgage loans that are subject to HOEPA or that would be classified as “high cost” loans under any similar state or local predatory or abusive lending law. There may be mortgage loans in the issuing entity that are subject to the state or local requirement that the loan provide a net tangible benefit (however denominated) to the borrower; the seller make or assign a representation that these mortgage loans are in compliance with applicable requirements. If it is determined that the issuing entity includes loans subject to HOEPA or otherwise classified as high cost loans, or which do not comply with applicable net tangible benefit requirements, the seller or other party described in the related prospectus supplement will be required to repurchase the affected loans and to pay any liabilities incurred by the issuing entity due to any violations of these laws. If the loans are found to have been originated in violation of predatory or abusive lending laws and the seller or such other party does not repurchase the affected loans and pay any related liabilities, securityholders could incur losses.

Financial Regulatory Legislative Reform and Related Regulations Could Have a Significant Impact

In response to the financial crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which President Obama signed into law on July 21, 2010. The Dodd-Frank Act requires the creation of new federal regulatory agencies, and grants additional authorities and responsibilities to existing regulatory agencies to identify and address emerging systemic risks posed by the activities of financial services firms. The Dodd-Frank Act also provides for enhanced regulation of derivatives and mortgage-backed securities offerings, restrictions on executive compensation and enhanced oversight of credit rating agencies. Additionally, the Dodd-Frank Act establishes the Bureau of Consumer Financial Protection (the “BCFP”) within the Federal Reserve System, a new consumer protection regulator tasked with regulating consumer financial services and products. The Dodd-Frank Act also limits the ability of federal laws to preempt state and local consumer laws.

The impact of the Dodd-Frank Act will depend significantly upon the content and implementation of the rules and regulations issued on its mandate. It is not yet clear how the Dodd-Frank Act and its associated rules and regulations will impact the mortgage-backed securities market and residential mortgage lending generally, and the issuing entity, investors in the securities offered thereby, the sponsor, the depositor, the servicers and their respective businesses and assets specifically. No assurance can be given that the new regulations will not have an adverse impact on these entities or the value of the securities offered hereby.

The BCFP is charged with issuing regulations to implement amendments to TILA made by the Dodd-Frank Act. These regulations will expand the existing “ability to pay” requirement under TILA, establish new minimum underwriting standards and impose new limits on prepayment penalties. To the extent the regulations ultimately adopted may impact investors in series of securities offered hereby, they will be described in the related prospectus supplement.

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Bankruptcy or Insolvency Proceedings Could Delay or Reduce Payments on the Securities

Each transfer of a mortgage loan to RRAC (or to such other seller specified in the related prospectus supplement), from the seller to the depositor and from the depositor to the issuing entity, will be intended to be an absolute and unconditional sale of that mortgage loan and will be reflected as such in the applicable documents.  However, in the event of the bankruptcy or insolvency of a prior owner of a mortgage loan, a trustee in bankruptcy or a receiver or creditor of the insolvent party could attempt to recharacterize the sale of that mortgage loan by the insolvent party as a borrowing secured by a pledge of the mortgage loan.  Such an attempt, even if unsuccessful, could result in delays in payments on the securities.  If such an attempt were successful, it is possible that the affected mortgage loans could be sold in order to liquidate the assets of the insolvent entity.  In the case of the bankruptcy or insolvency of the applicable seller, there can be no assurance that the proceeds of such a liquidation would be sufficient to repay the securities in full.

One or more of the transferors may be banks that are subject to regulation by the FDIC. The FDIC recently has indicated that it may treat as property of a bank in receivership or conservatorship (i) any property that is shown as an asset on the financial statements of a bank, or (ii) any property that the bank previously transferred if the bank retains a continuing economic interest in the transferred assets. The FDIC has indicated that it may assert these positions notwithstanding that the assets have been sold as a matter of law. The depositor will take certain steps to try to prevent any of the mortgage loans from being shown as assets on the financial statements of any transferor that is a bank and to try in certain cases to prevent a transferor that is a bank from purchasing securities. The depositor, however, can provide no assurances that its efforts will be successful, nor can it provide any assurance that a court will not accept the FDIC’s position. As a result, should a transferor that is a bank become the subject of a receivership or conservatorship, should the mortgage loans be shown as assets on its financial statements or should it own any securities, and should the FDIC’s position prevail, then the issuing entity may not own all the mortgage loans and there may be delays in payment or losses on the securities. There may also be delays in payments while these issues are being resolved by the FDIC or a court.

Risks Related to Amounts in Pre-Funding Account(s) Being Applied to Pay Principal on the Securities

Amounts remaining in any pre-funding account at the end of the related funding period will be distributed as prepayment of principal to investors on the distribution date immediately following the end of the funding period in the manner specified in the related prospectus supplement.  Any such payment will reduce the weighted average life of the securities and may adversely affect the yield of the securities.  Securityholders will bear any reinvestment risk resulting from such prepayment, such risk being the inability to invest such early payment at a yield that is at least equal to the yield on the securities.

The Addition of Subsequent Mortgage Collateral to the Pre-Funding Account(s) During the Funding Period May Adversely Affect the Performance of the Securities

Although subsequent mortgage collateral must satisfy the characteristics described in the related prospectus supplement, subsequent mortgage collateral may have different characteristics, including, without limitation, a more recent origination date than the initial mortgage collateral.  As a result, the addition of subsequent mortgage collateral to the pre-funding account may adversely affect the performance of the related securities.

Risks Related to Owning Book-Entry Securities

Limited Liquidity of Securities. Issuance of the securities in book-entry form may reduce their liquidity in the secondary trading market because investors may be unwilling to purchase securities for which they cannot obtain physical certificates.

Limited Ability to Transfer or Pledge Securities. Since transactions in the book-entry securities can be effected only through the Depository Trust Company (“DTC”), participating organizations, indirect participants and certain banks, your ability to transfer or pledge a book-entry security to persons or entities that do not participate in the DTC system or otherwise to take actions in respect of such securities, may be limited due to lack of a physical certificate.

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Delays in Distributions.  You may experience some delay in the receipt of distributions on book-entry securities because the distributions will be forwarded by the trustee to DTC for DTC to credit the accounts of its participants which will thereafter credit them to your account either directly or indirectly through indirect participants, as applicable.

Limited Ability to Resell Securities

The underwriter will not be required to assist in resales of the securities, although it may do so.  A secondary market for any class of securities may not develop.  If a secondary market does develop, it might not continue or it might not be sufficiently liquid to allow you to resell any of your securities.

The Securities May Not Be Suitable Investments

The securities may not be a suitable investment if you require a regular or predictable schedule of payments, or payment on any specific date.  Because the mortgage loans in the issuing entity may include a substantial proportion of loans whose future performance is difficult to predict, such as adjustable rate mortgage loans and interest-only loans, and for the other factors relating to the mortgage loans discussed above, the yields and the aggregate amount and timing of distributions on your securities may be subject to substantial variability from period to period and over the lives of the securities.  An investment in these types of securities involves significant risks and uncertainties and should only be considered by sophisticated investors who, either alone or with their financial, tax and legal advisors, have carefully analyzed the mortgage loans and the securities and understand the risks.  In addition, investors should not purchase classes of securities that are susceptible to special risks, such as subordinate securities, interest-only securities and principal-only securities, unless the investors have the financial ability to absorb a substantial loss on their investment.

Owners of Original Issue Discount Securities Should Consider Federal Income Tax Consequences

An investor owning a security issued with original issue discount will be required to include original issue discount in ordinary gross income for federal income tax purposes as it accrues, in advance of receipt of the cash attributable to such income.  Accrued but unpaid interest on accrual securities will be treated as original issue discount for this federal income tax purpose.  (See “MATERIAL FEDERAL INCOME TAX CONSEQUENCES—Taxation of Debt Securities Generally—Original Issue Discount.”)

THE SPONSOR AND THE SELLER

General

RWT Holdings, Inc. (“RWT Holdings” or the “Sponsor”) is a Delaware corporation and wholly owned subsidiary of Redwood Trust, Inc. and is headquartered in Mill Valley, California.  RWT Holdings has acquired residential mortgage loans, directly or indirectly, from originators since it was organized in February 1998.  RWT Holdings has been a sponsor in the securitization market since 2002.  As a sponsor, RWT Holdings acquires, directly or indirectly through its subsidiaries, residential mortgage loans in the secondary mortgage market and initiates the securitization of these loans by having them transferred to the depositor, which ultimately transfers them to the issuing entity for the related securitization.

As of September, 2011, RWT Holdings has sponsored the securitization of approximately $26.69 billion of residential mortgage loans ($4,077,538,500 in 2002, $6,198,200,700 in 2003, $10,199,107,364 in 2004, $1,440,123,400 in 2005, $1,035,362,200 in 2006, $2,833,909,600 in 2007 and $237,838,333 in 2010 and $670,664,551 in 2011).  RWT Holdings acquires, directly or indirectly through its subsidiaries, residential mortgage loans secured by first and second liens on one- to four-family residential properties under several loan purchase agreements from mortgage loan originators or sellers nationwide that meet its seller/servicer eligibility requirements.  See “LOAN PROGRAM—Qualifications of Sellers” in this prospectus for a general description of the characteristics used to determine eligibility of collateral sellers.  Prior to acquiring the mortgage loans, RWT Holdings conducts a review of the related mortgage loan seller and of the mortgage loans.  RWT Holdings has developed a quality control program to monitor the quality of loan underwriting at the time of acquisition and on an ongoing basis.  All loans purchased will be subject to this quality control program.

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Redwood Residential Acquisition Corporation (“RRAC” or the “Seller”), is a Delaware corporation and wholly owned subsidiary of RWT Holdings and Redwood Trust, Inc., headquartered in Mill Valley, California. Descriptions of, and references to, RWT Holdings’ acquisition of residential mortgage loans include the acquisition of such loans by RRAC. RRAC was organized in 2009 and commenced its business of acquiring residential mortgage loans for securitization in July 2010. RRAC is licensed to acquire residential mortgage loans and related mortgage servicing rights in states where such a license is required. RRAC does not originate or service loans, is not a seller/servicer approved by Fannie Mae or Freddie Mac, is not a mortgagee approved by the FHA, and is not an insured depository institution. On the closing date for each series of securities where RRAC is acting as seller, RRAC will sell all of its interest in the related mortgage loans to the depositor.  RWT Holdings and RRAC work in coordination with the underwriters and rating agencies in structuring each securitization transaction.  RWT Holdings and RRAC do not currently service mortgage loans but rather contract with third-party servicers for servicing the mortgage loans that they acquire.  Third-party servicers are assessed based upon the servicing rating and credit quality of the servicing institution, as well as for their systems and reporting capabilities, review of collection procedures and confirmation of servicers’ ability to provide detailed reporting on the performance of the securitization pool.

Sponsor’s Pre-Offering Review of the Mortgage Loans

 As described in the prospectus supplement, the Sponsor will conduct a review of the mortgage loans to be included in the mortgage pool for the purpose of providing reasonable assurance that the disclosure regarding the mortgage pool in the prospectus supplement is accurate in all material respects. In conducting the review, the Sponsor may engage third parties to assist it with certain elements of the review. The review conducted by the Sponsor, including the portions of the review conducted with the assistance of the third parties, is referred to herein as the “Sponsor’s Pre-Offering Review.” The Sponsor will determine the nature, extent and timing of the Sponsor’s Pre-Offering Review and the level of assistance provided by any third party. Unless otherwise provided in the related prospectus supplement, the Sponsor will not attribute any of the findings and conclusions of the Sponsor’s Pre-Offering Review to any of the third parties. The results of the review prepared by the third parties engaged by the Sponsor will generally be shared with the underwriters.

Unless otherwise provided in the prospectus supplement, the Sponsor’s Pre-Offering Review will include a credit and compliance component and a component consisting of a review of the independent appraisals of the mortgaged properties obtained by the originators in connection with the origination of the mortgage loans. None of the procedures conducted as part of the Sponsor’s Pre-Offering Review will constitute, either separately or in combination, an independent underwriting of the mortgage loans. The Sponsor’s Pre-Offering Review also will include a component consisting of procedures designed to verify the Sponsor’s data regarding the characteristics of the mortgage loans, which data are used to generate the numerical information about the mortgage pool included in the prospectus supplement.

THE DEPOSITORS

The prospectus supplement will identify whether the depositor is Sequoia Mortgage Funding Corporation or Sequoia Residential Funding, Inc. Sequoia Mortgage Funding Corporation is a Delaware corporation organized on January 31, 1997 and Sequoia Residential Funding, Inc., is a Delaware corporation organized on September 1, 1999, in each case for the limited purpose of acquiring, owning and transferring trust assets and selling interests therein or bonds secured thereby. Sequoia Mortgage Funding Corporation is a qualified REIT subsidiary of Redwood Trust, Inc. Sequoia Residential Funding, Inc. is a subsidiary of RWT Holdings, Inc. RWT Holdings, Inc. is a taxable REIT subsidiary of Redwood Trust, Inc. Redwood Trust, Inc. is a publicly owned real estate investment trust and is listed on the New York Stock Exchange under the symbol “RWT.” Each depositor maintains its principal office at One Belvedere Place, Mill Valley, California 94941. The telephone number is (415) 389-7373.

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Each depositor is generally engaged in the business of serving as depositor of one or more trusts that may authorize, issue, sell and deliver bonds or other evidences of indebtedness or certificates of interest that are secured by a pledge or other assignment of, or represent an interest in, mortgage loans.  Each depositor is also generally engaged to a limited extent in the business of acquiring, owning, holding, transferring, assigning, pledging and otherwise dealing with mortgage related assets.  Each depositor generally acquires mortgage loans from RRAC, or if specified in the prospectus supplement, from another seller of mortgage loans, in each case in privately negotiated transactions.

The certificate of incorporation of each depositor provides that the depositor may not conduct any activities other than those related to the issue and sale of one or more series and to serve as depositor of one or more trusts that may issue and sell bonds or securities.  After the issuance of the securities, the related depositor may be required (to the extent specified in the related agreements) to perform certain actions on a continual basis, including but not limited to:

· upon the discovery of the breach of any representation or warranty made by the seller or other party named in the prospectus supplement in respect of a mortgage loan that materially and adversely affects the value of that mortgage loan, to cause the seller or such other party to repurchase the mortgage loan from the trustee, or deliver a substitute mortgage loan as described herein;

· to make all initial filings establishing or creating a security interest over the mortgage loans and make all filings necessary to maintain the effectiveness of any original filings necessary under the relevant UCC to perfect the trustee’s security interest in or lien on the mortgage loans;

· to arrange for replacement interest rate cap contracts, interest rate swap agreements and yield supplement agreements in the event the applicable derivative instrument is terminated early;

· to appoint a successor trustee or securities administrator, as applicable, in the event either the trustee or the securities administrator resigns, is removed or becomes ineligible to continue servicing in such capacity under the related agreement;

· to prepare and file, or cause the preparation and filing of, any reports required under the Exchange Act;

· to notify the rating agencies and any other relevant parties of the occurrence of any event of default or other event specified in the related agreements;

· to exercise any approval or consent rights retained under the servicing agreements; and

· to provide the trustee, the securities administrator and the master servicer with any information they may reasonably require to comply with the terms of the agreements.

THE ISSUING ENTITIES AND THE ISSUING ENTITY ASSETS

General

Either Sequoia Mortgage Funding Corporation or Sequoia Residential Funding, Inc., the depositor, will establish a trust as the issuing entity for each series of asset-backed securities and convey to the related trustee certain assets, as specified in the prospectus supplement.  Each issuing entity will be created as of the first day of the month in which the securities are issued or another date which will be specified in the prospectus supplement (the “cut-off date”).  All references in this prospectus to “pool,” “certificates,” “bonds,” “securities,” “depositor” or “securityholders” should be deemed to apply to one specific series, issuing entity and prospectus supplement, unless otherwise noted.

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The certificates of a series (“certificates”) will represent interests in the assets of the issuing entity related to that series and the bonds of a series (“bonds”) will be secured by the pledge of the issuing entity assets related to that series.  The issuing entity assets for each series will be held by the trustee for the benefit of the related securityholders.  The securities will be entitled to payment from the assets of the issuing entity or other assets pledged for the benefit of the securityholders, as specified in the prospectus supplement, and will not be entitled to payments in respect of the assets of any other issuing entity established by the depositor.

The issuing entity assets will be acquired by the depositor, either directly or through affiliates, from one or more sellers which may be affiliates of the depositor, and conveyed without recourse (except as herein described) by the depositor to the issuing entity .  Each seller will have originated or acquired the loans as described in the prospectus supplement.  Loans acquired by the depositor will have been originated in accordance with the underwriting criteria described under “LOAN PROGRAM—Underwriting Standards” or as otherwise described in the prospectus supplement.

The depositor will cause the issuing entity assets to be assigned or pledged to the trustee named in the prospectus supplement for the benefit of the holders of the securities (“certificateholders,” or “bondholders,” as the case may be).  For a fee, one or more servicers named in the prospectus supplement will service the issuing entity assets, either directly or through other servicing institutions, or subservicers, pursuant to servicing agreements assigned to the trustee.  With respect to loans serviced by a servicer through a subservicer, such servicer will remain liable for its servicing obligations under the related agreement as if the servicer were servicing such loans. To the extent described in the prospectus supplement, a master servicer may be named to monitor the servicers.

  With respect to each issuing entity, prior to the initial offering of the securities, the issuing entity will have no assets or liabilities.  No issuing entity is expected to engage in any activities other than acquiring, managing and holding the trust assets and other assets specified in the prospectus supplement and the proceeds thereof, issuing securities and making payments and distributions thereon and certain related activities.  No issuing entity is expected to have any source of capital other than its assets and any related credit enhancement.

If specified in the applicable prospectus supplement, the issuing entity for a series will be a special purpose statutory trust organized under the laws of the State of Delaware or such other state as is specified.

The property of the issuing entity for each series of securities will generally consist of (including any combination of):

· mortgage loans secured by properties of the types described in this prospectus;

· amounts held from time to time in the collection account, distribution account or other account established for a series of securities;

· mortgaged properties that secured a mortgage loan and that are acquired on behalf of the securityholders by foreclosure, deed in lieu of foreclosure or repossession;

· any reserve fund established pursuant to the agreements for a series of securities, if specified in the prospectus supplement;

· any security insurance policy, pool insurance policy, special hazard insurance policy, bankruptcy bond, interest rate cap agreement, interest rate swap agreement, currency swap agreement or other form of credit enhancement described in this prospectus and specified in the prospectus supplement;

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· any servicing agreements relating to mortgage loans in the issuing entity, to the extent that these agreements are assigned to the trustee;

· any primary mortgage insurance policies or limited purpose surety bonds relating to mortgage loans in the issuing entity; and

· investments held in any fund or account or any guaranteed investment contract and income from the reinvestment of these funds, if specified in the prospectus supplement.

The prospectus supplement may specify that a certain amount or percentage of a mortgage loan will not be sold by the depositor or by the seller of the mortgage loan, but will be retained by that party (the “retained interest“).

Therefore, amounts received with respect to retained interest in a mortgage loan included in the issuing entity for a series will not be included in the issuing entity but will be payable to the seller of the respective asset, or to the master servicer if any), servicer, depositor or another party, free and clear of the interest of securityholders under the agreements.

If so specified in the applicable prospectus supplement, the depositor, an affiliate of the depositor or an unaffiliated loan seller will have the right or obligation to purchase, or to substitute a replacement mortgage loan that satisfies the substitution criteria specified in the related prospectus supplement for, mortgage loans due to breaches of representations and warranties, defaults or such other reason as is specified in the prospectus supplement.  If so specified in the applicable prospectus supplement, the depositor, an affiliate of the depositor, as servicer or the master servicer will have the right to purchase a specified amount or percentage of the mortgage loans, or specified mortgage loans, under the circumstances described in the prospectus supplement.

The Loans

The loans included in an issuing entity will be mortgage loans secured by one-to-four-family residential properties.  The loans may be either first or junior lien loans and will be closed-end loans. There will be no revolving credit line loans.  As described in the prospectus supplement, the loans may be underwritten to “A” quality standards or to standards below “A” quality (e.g., Alt-A, A minus or subprime).

The loans will have monthly payments due on the first day of each month or on such other day of the month specified in the prospectus supplement.  The payment terms of the loans to be included in an issuing entity will be described in the prospectus supplement and may include any of the following features (or combination thereof):

· Interest may be payable at a fixed rate, a rate adjustable from time to time in relation to an index, a rate that is fixed for a period of time or under certain circumstances and is followed by an adjustable rate, a rate that otherwise varies from time to time, a rate that is convertible from an adjustable rate to a fixed rate, or a rate that is convertible from one index to another, in each case as specified in the prospectus supplement.  Changes to an adjustable rate may be subject to periodic limitations, maximum rates, minimum rates or a combination of such limitations.  Accrued interest may be deferred and added to the principal of a loan for such periods and under such circumstances as may be specified in the prospectus supplement.

· Principal may be payable on a level debt service basis to fully amortize the loan over its term, may be calculated on the basis of an assumed amortization schedule that is significantly longer than the original term to maturity or on an interest rate that is different from the loan rate or may not be amortized during all or a portion of the original term.  Certain loans may provide for monthly payments of interest but no payments of principal for either the first five or ten years or any other period specified after origination.  Certain loans may require payment of all or a substantial portion of the principal upon maturity, commonly referred to as a “balloon payment.”  Principal may include interest that has been deferred and added to the principal balance of the loan.

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· Monthly payments of principal and interest may be fixed for the life of the loan, may increase over a specified period of time or may change from period to period.

· Loans may include limits on periodic increases or decreases in the amount of monthly payments and may include maximum or minimum amounts of monthly payments.

· Prepayments of principal may be subject to a prepayment fee, which may be fixed for the life of the loan or may change over time.  Certain loans may permit prepayments after expiration of certain periods, commonly referred to as “lockout periods.”  Other loans may permit prepayments without payment of a fee unless the prepayment occurs during specified time periods.  The loans may include “due on sale“ clauses which permit the mortgagee to demand payment of the entire loan in connection with the sale or certain transfers of the related property.  Other loans may be assumable by persons meeting the then applicable standards set forth in the underlying loan documents.

Types of adjustable rate mortgage loans with the above features that may be included in an issuing entity include the following:

· “standard“ adjustable rate mortgage loans whose interest rate adjusts on the basis of a variable index plus a margin, with the initial adjustment typically occurring one year or less after origination of the related mortgage loan and adjustments occurring periodically thereafter;

· “hybrid“ mortgage loans, whose interest rate is fixed for the initial period specified in the related mortgage note (typically for a period of a year or more after origination), and thereafter adjusts periodically based on the related index;

· “interest-only“ mortgage loans, which provide for payment of interest at the related mortgage interest rate, but no payment of principal, for the period specified in the related mortgage note; thereafter, the monthly payment is increased to an amount sufficient to amortize the principal balance of the mortgage loan over the remaining term and to pay interest at the applicable interest rate borne by such mortgage loan;

· “negative amortization” mortgage loans, which may have a low introductory interest rate, and thereafter have a mortgage interest rate which adjusts periodically based on the related Index; however, the borrower is only required to make a minimum or specified monthly payment which may not be sufficient to pay the monthly interest accrued, resulting in an increase to the principal balance of the mortgage loan by the amount of unpaid interest; and

· “option ARMs,” which combine several of the features described above and permit the borrower to elect whether to make a monthly payment sufficient to pay accrued interest and amortize the principal balance, make an interest-only payment or make a minimum payment that may be insufficient to pay accrued interest (with the unpaid interest added to the principal balance of the mortgage loan).

An issuing entity may contain buydown loans.  A buydown loan includes provisions whereby a third party partially subsidizes the monthly payments of the borrower on the related loan during the early years of repayment under the loan, the partial subsidy being made from a buydown fund contributed by the third party at the time of origination of the loan.  A buydown fund will be in an amount equal either to the discounted value or full aggregate amount of future payment subsidies.  The underlying assumption of a buydown plan is that the income of the borrower will increase during the buydown period as a result of normal increases in compensation and inflation, so that the borrower will be able personally to make the full loan payments at the end of the buydown period without the continued assistance of the partial subsidy.  To the extent that this assumption as to increased income is not fulfilled, the possibility of default on a buydown loan is increased.  The prospectus supplement will contain information with respect to any buydown loan concerning limitations on the interest rate paid by the borrower initially, on annual increases in the interest rate and on the length of the buydown period.

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If provided for in the applicable prospectus supplement, an issuing entity may contain mortgage loans under which the monthly payments by the borrower during the early years following origination are less than the amount of interest that would otherwise be payable (“GPM loans”).  GPM loans generally provide for a schedule of fixed, gradually increasing monthly payments over time.  If stated in the related prospectus supplement, the resulting difference in payment on the early payments due under a GPM loan will be compensated for from amounts on deposit in a segregated fund (“GPM fund”).  In lieu of cash deposit, the depositor may deliver to the trustee a letter of credit guaranteed investment contract or another instrument acceptable to the related rating agency to fund the GPM fund.

If specified in the related prospectus supplement, an issuing entity may contain re-performing loans, which are generally previously delinquent loans that have been brought current, mortgage loans that are subject to a repayment plan or bankruptcy plan and that had arrearages of at least three monthly payments when the repayment plan or bankruptcy plan was entered into, and mortgage loans that have been modified.  These mortgage loans may be acquired from a wide variety of sources through bulk or periodic sales.  The rate of default on re-performing mortgage loans may be higher than the rate of default on mortgage loans that have not previously been in arrears.  An issuing entity will not contain any non-performing loans as of the related cut-off date.

If specified in the applicable prospectus supplement, the mortgage loans may include “step-down” mortgage loans, which permit the servicer to reduce the interest rate on the mortgage loan if the borrower has been current in its monthly payments of principal and interest.  The amount by which the mortgage rate may be reduced and the period during which the mortgage loan must have been current will be specified in the mortgage note.

The interest rate of an adjustable rate mortgage loan in an issuing entity may adjust in accordance with one or more of the following indices as specified in the applicable prospectus supplement:

· U.S. Dollar LIBOR (“LIBOR”), which is the average of the London Interbank Offer Rate, a rate at which banks in London, England, lend U.S. dollars to other banks in the U.S. dollar wholesale or interbank money markets for a specified duration.

· London Interbank Offer Swap Rate (“LIBORSWAP”), a rate which is the difference between the negotiated and fixed rate of a swap, with the spread determined by characteristics of market supply and creditor worthiness.

· Constant Maturity Treasury (“CMT”) Indices, which is the weekly or monthly average yield on United States Treasury securities adjusted to a specified constant maturity, as published by the Federal Reserve Board.

· Treasury Bill (“T-Bill”) Indices, which is a rate based on the results of auctions that the U.S. Department of Treasury holds for its Treasury bills, notes or bonds or is derived from its daily yield curve.

· Federal Funds Rate, which is the interest rate that banks charge each other on overnight loans made between them, as determined by the Federal Reserve Board.

· Prime Rate (“Prime Rate”) Index, which is an index based on the interest rate that banks charge to their most credit-worthy customers for short-term loans.  The Prime Rate may differ among financial institutions.

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· Monthly Treasury Average (“MTA”) Index, which is a per annum rate equal to the 12-month average yields on United States Treasury securities adjusted to a constant maturity of one year, as published by the Federal Reserve Board.

· Cost of Funds Index (“COFI”), which is the monthly weighted average cost of funds for savings institutions that are member institutions of various federal banking districts, most commonly the 11th District members of the Federal Home Loan Bank of San Francisco.

The Indices described above which are applicable to the mortgage loans for a particular issuing entity will be disclosed in the related prospectus supplement.

If stated in the applicable prospectus supplement, an issuing entity may include mortgage loans that provide for payments at monthly intervals or at bi-weekly, semi-monthly, quarterly, semi-annual, annual or other intervals, or that provide for payments of interest only for a period of time; and that have terms to more than 40 years; or that have such other characteristics as are specified in the applicable prospectus supplement.

The real property that secures repayment of the loans is referred to in this prospectus as the mortgaged properties.  In the case of junior lien loans, such liens generally will be subordinated to one or more senior liens on the related mortgaged properties as described in the prospectus supplement.  Loans will be secured by mortgages or deeds of trust or other similar security instruments creating a lien on a mortgaged property.  Some liens will be subordinated to one or more senior liens on the related mortgaged properties as described in the prospectus supplement.  The properties relating to loans will consist of detached or semi-detached one-to four-family dwelling units, townhouses, rowhouses, individual condominium units, manufactured homes, individual units in planned unit developments, and certain other dwelling units.  Such properties may include vacation and second homes, investment properties and dwellings situated on leasehold estates.  The loans may include cooperative apartment loans secured by security interests in shares issued by private, nonprofit, cooperative housing corporations and in the related proprietary lease or occupancy agreements granting exclusive rights to occupy specific dwelling units in the cooperatives’ building.  In the case of leasehold interests, the term of the leasehold will exceed the scheduled maturity of the loan by at least five years, unless otherwise specified in the prospectus supplement.

The properties may be located in any one of the fifty states, the District of Columbia, Guam, Puerto Rico or any other territory of the United States.

Loans with certain loan-to-value ratios and/or certain principal balances may be covered wholly or partially by primary mortgage guaranty insurance policies.  The existence, extent and duration of any such coverage will be described in the prospectus supplement.

Certain loans, in addition to being secured by real property, may be secured by a security interest in a limited amount of additional collateral owned by the borrower or a third-party guarantor.  Such additional collateral may no longer be required when the principal balance of such additional collateral mortgage loan is reduced to a predetermined amount set forth in the related pledge agreement or guaranty agreement, as applicable, or when the loan-to-value ratio for such additional collateral mortgage loan is reduced to the applicable loan-to-value ratio for such additional collateral mortgage loan by virtue of an increase in the appraised value of the mortgaged property as determined by the related servicer.

Each prospectus supplement will contain information to the extent then specifically known to the depositor, with respect to the loans contained in the pool, generally including:

· the original principal balance of the mortgage loans;

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· the total principal balance of the mortgage loans as of the applicable cut-off date (and if there is more than one servicer, the balance by servicer);

· the types and percentages of mortgaged properties securing the mortgage loans;

· the range of original terms to maturity of the mortgage loans;

· the range of remaining terms to maturity of the mortgage loans;

· the range of ages of the mortgage loans;

· mortgage loan purpose (e.g., whether a purchase or refinance);

· the range of original and remaining amortization period for the mortgage loans;

· the range of principal balances and average principal balance of the mortgage loans;

· the earliest origination date and latest maturity date of the mortgage loans;

· the loan-to-value and debt service coverage ratios, as applicable;

· mortgage loans having loan-to-value ratios at origination exceeding 80%;

· the number of fixed rate mortgage loans and the number of adjustable rate mortgage loans;

· the interest rate or range of interest rates borne by the mortgage loans;

· the weighted average of interest rate borne by the mortgage loans;

· the geographical distribution of the mortgage loans;

· the total principal balance of buydown loans or GPM loans, if applicable;

· the total principal balance of mortgage loans that are subject to negative amortization, if applicable;

· the delinquency status of the mortgage loans as of the cut-off date;

· with respect to adjustable rate mortgage loans, the adjustment dates, the relevant indices, the highest, lowest and weighted average margin, the limitations on the adjustment of the interest rates on any adjustment date and over the life of the loans; and

· whether the mortgage loan provides for an interest-only period and whether the principal balance of that mortgage loan is fully amortizing or is amortized on the basis of a period of time that extends beyond the maturity date of the mortgage loan.

The total principal balance of the mortgage loans in an issuing entity as stated in the related prospectus supplement is subject to a permitted variance of plus or minus five percent.

The “loan-to-value ratio” of a loan at any given time is the fraction, expressed as a percentage, the numerator of which is the principal balance of the loan and the denominator of which is the collateral value of the property.  The “combined loan-to-value ratio” of a loan at any given time is the ratio, expressed as a percentage, of (i) the sum of (a) the principal balance of the loan and (b) the outstanding principal balance of any senior mortgage loan(s) to (ii) the collateral value of the property.  The “effective loan-to-value ratio” of a loan at any given time is the fraction, expressed as a percentage, the numerator of which is the principal balance of the loan, less the amount secured by additional collateral, if any, and the denominator of which is the collateral value of the property.

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The “collateral value” of a property, other than with respect to certain loans the proceeds of which were used to refinance an existing mortgage loan (each, a “refinance loan”), is the lesser of (a) the appraised value determined in an appraisal obtained at origination of such loan and (b) the sales price for the property if the proceeds of the loan are used to purchase the related property.  In the case of a refinance loan, the collateral value of the related property is the appraised value of the property as determined by an appraisal obtained at the time of refinancing.

No assurance can be given that collateral values of the properties have remained or will remain at the levels at which they are originally calculated. If the residential real estate market should experience an overall decline in property values such that the sum of the outstanding principal balances of the loans and any primary or secondary financing on the properties, as applicable, in a particular pool become equal to or greater than the value of the properties, the actual rates of delinquencies, foreclosures and losses experienced with respect to that pool could be higher than those now generally experienced in the mortgage lending industry. In addition, adverse economic conditions and other factors (which may or may not affect real property values) may affect the timely payment by borrowers of scheduled payments of principal and interest on the loans and, accordingly, the actual rates of delinquencies, foreclosures and losses with respect to any pool. To the extent that such losses are not covered by subordination provisions or alternative arrangements, such losses will be borne by the securityholders of the affected series to the extent that the credit enhancement provisions relating to the series do not protect the securityholders from such losses.

Pre-Funding

If stated in the related prospectus supplement, a portion of the issuance proceeds of the securities of a particular series will be deposited in a pre-funding account to be established with the trustee, which will be used to acquire additional mortgage loans from time to time during the time period specified in the related prospectus supplement.  Prior to the application of amounts on deposit in the related pre-funding account to purchase additional mortgage loans, those amounts may be invested in one or more investments permitted under the applicable agreements.  See “THE AGREEMENTS—Servicing Provisions—Investment of Funds” for a description of the types of eligible investments that may be permitted under the applicable agreements.

Additional mortgage loans that are purchased with amounts on deposit in a pre-funding account will be required to satisfy certain eligibility criteria set forth in the related prospectus supplement.  The eligibility criteria for additional mortgage loans will be consistent with the eligibility criteria of the mortgage loans included in the related issuing entity as of the closing date subject to the exceptions stated in the related prospectus supplement.

Although the specific parameters of a pre-funding account with respect to any issuance of securities will be specified in the related prospectus supplement, it is anticipated that:

· the period during which additional mortgage loans may be purchased from amounts on deposit in the related pre-funding account will not exceed 90 days from the related closing date, unless otherwise specified; and

· the additional mortgage loans to be acquired by the related issuing entity will be subject to the same representations and warranties as the mortgage loans included in the related issuing entity on the closing date, although additional criteria may also be required to be satisfied, as described in the related prospectus supplement.

In no event will the period during which additional mortgage loans may be purchased exceed one year.  In addition, no more than 50% of the proceeds of the offering of a particular series may be used to fund the pre-funding account.

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USE OF PROCEEDS

The net proceeds to be received from the sale of the securities will be applied by the depositor to the purchase of issuing entity assets and payment of related expenses or will be used by the depositor for general corporate purposes.  Each depositor expects to sell securities in series from time to time, but the timing and amount of offerings of securities will depend on a number of factors, including the volume of issuing entity assets acquired by the depositor, prevailing interest rates, availability of funds and general market conditions.

LOAN PROGRAM

The loans will have been purchased by the depositor, either directly or through affiliates, from sellers.  Unless otherwise specified in the prospectus supplement, the loans acquired by the depositor will have been originated in accordance with the underwriting criteria described below.

Underwriting Standards

Each seller or other party named in the related prospectus supplement will represent and warrant that all loans originated and/or sold by it to the depositor will have been underwritten in accordance with standards described in the prospectus supplement.

Underwriting standards are applied by or on behalf of a lender to evaluate the borrower’s credit standing and repayment ability, and the value and adequacy of the related property as collateral.  In general, a prospective borrower applying for a mortgage loan is required to fill out a detailed application designed to provide to the underwriting officer pertinent credit information.  As part of the description of the borrower’s financial condition, the borrower generally is required to provide a current list of assets and liabilities and a statement of income and expenses, as well as an authorization to apply for a credit report which summarizes the borrower’s credit history with local merchants and lenders and any record of bankruptcy or other significant public records.  In most cases, an employment verification is obtained from an independent source (typically the borrower’s employer), which verification reports the length of employment with that organization, the borrower’s current salary and whether it is expected that the borrower will continue such employment in the future.  If a prospective borrower is self-employed, the borrower may be required to submit copies of signed tax returns.  The borrower may also be required to authorize verification of deposits at financial institutions where the borrower has demand or savings accounts.

In determining the adequacy of the property as collateral, an appraisal will generally be made of each property considered for financing.  The appraiser is required to inspect the property and verify that it is in good repair and that construction, if new, has been completed.  The appraisal is based on the market value of comparable homes, the estimated rental income (if considered applicable by the appraiser) and the cost of replacing the home.

Once all applicable employment, credit and property information is received, a determination generally is made as to whether the prospective borrower has sufficient monthly income available:

· to meet the borrower’s monthly obligations on the proposed mortgage loan (generally determined on the basis of the monthly payments due in the year of origination) and other expenses related to the property (such as property taxes and hazard insurance); and

· to meet monthly housing expenses and other financial obligations and monthly living expenses.

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The underwriting standards applied by a seller, particularly with respect to the level of loan documentation and the borrower’s income and credit history, may be varied in appropriate cases where factors such as low combined loan-to-value ratios or other favorable credit aspects exist.

If specified in the prospectus supplement, a portion of the loans in the pool may have been originated under a limited documentation program.  Under a limited documentation program, more emphasis is placed on the value and adequacy of the property as collateral and other assets of the borrower than on credit underwriting.  Under a limited documentation program, certain credit underwriting documentation concerning income or income verification and/or employment verification is waived.  The prospectus supplement will indicate the types of limited documentation programs pursuant to which the loans were originated and the underwriting standards applicable to such limited documentation programs.

In the case of a loan secured by a leasehold interest in real property, the title to which is held by a third-party lessor, the seller will represent and warrant, among other things, that the remaining term of the lease and any sublease is at least five years longer than the remaining term on the related mortgage note.

Certain of the types of loans that may be included in an issuing entity may involve additional uncertainties not present in traditional types of loans.  For example, certain of such loans may provide for escalating or variable payments by the borrower.  These types of loans are underwritten on the basis of a judgment that the borrowers have the ability to make the monthly payments required initially.  In some instances, however, a borrower’s income may not be sufficient to permit continued loan payments as such payments increase.  These types of loans may also be underwritten primarily upon the basis of combined loan-to-value ratios or other favorable credit factors.

From time to time and in the ordinary course of business, lenders may approve loans that do not comply with all of the applicable underwriting standards (“exception loans”), provided sufficient compensating factors are present.  For example, lenders may permit debt-to-income ratios to exceed guidelines if one or more compensating factors are present such as low loan-to-value, borrower high liquid net worth or documented excess funds in reserves, or strong borrower credit history and credit scores.  There are no limitations on the specific underwriting standards that may be waived by the lenders and there are no requirements of specific compensating factors that must be present.  Lenders exercise a significant amount of discretion as to when an exception loan should still be approved.  There are no limitations on the amount of exception loans that may be included in the assets of the issuing entity backing securities offered hereby.  The prospectus supplement will set forth the number and aggregate principal amount of exception loans known to the sponsor and will include a narrative summary disclosure of the characteristics of the exception loans.

Qualifications of Sellers

Except as otherwise set forth herein or in the prospectus supplement, each seller must be an institution experienced in originating and servicing loans of the type contained in the pool in accordance with accepted practices and prudent guidelines, and must maintain satisfactory facilities to originate and service those loans; each seller must be a seller/servicer approved by either Fannie Mae or Freddie Mac; and each seller must be a mortgagee approved by the FHA or an institution the deposit accounts of which are insured by the Federal Deposit Insurance Corporation.

Quality Control

A quality control program has been developed to monitor the quality of loan underwriting at the time of acquisition and on an ongoing basis.  All loans purchased will be subject to this quality control program.  A legal document review of each loan acquired will be conducted to verify the accuracy and completeness of the information contained in the mortgage notes, security instruments and other pertinent documents in the file.  A sample of loans to be acquired, selected by focusing on those loans with higher risk characteristics, will normally be submitted to a third-party nationally recognized underwriting review firm for a compliance check of underwriting and review of income, asset and appraisal information.

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Details of the quality control measures adopted and the sponsor’s pre-offering review of the loans for each issuing entity will be set forth in the applicable prospectus supplement.

Representations and Warranties; Repurchases

In the mortgage loan purchase and sale agreement or similar agreement, pursuant to which the depositor will purchase the mortgage loans from the seller, the seller will make or assign certain representations and warranties to the depositor concerning the mortgage loans. If so indicated in the applicable prospectus supplement, the seller may, rather than itself making representations and warranties, cause the representations and warranties made by an originator to the seller in connection with the purchase of mortgage loans by the seller to be assigned to the depositor. In these cases, these representations and warranties may have been made as of a date prior to the date of execution of the mortgage loan purchase and sale agreement. The trustee will be assigned all right, title and interest in the mortgage loan purchase and sale agreement or similar agreement insofar as they relate to such representations and warranties made or assigned by the seller. The seller or other party named in the prospectus supplement will be obligated to repurchase (or, within the period provided in the Agreement, to substitute a replacement mortgage loan for) any mortgage loan as to which there exists an uncured breach of certain of its representations and warranties, which breach materially and adversely affects the value of, or interest of the securityholders in, the mortgage loan.

These representations and warranties will include the following as to each mortgage loan, among others, unless otherwise specified in the prospectus supplement:

· The information set forth in the mortgage loan schedule is true and correct in all material respects;

· Immediately prior to the sale of the mortgage loan pursuant to the mortgage loan purchase and sale agreement, the seller was a sole owner and holder of the mortgage loan.  The mortgage loan is not assigned or pledged, and the seller has good and marketable title thereto, and has full right to transfer and sell the mortgage loan to the depositor free and clear of any encumbrance, equity, lien, pledge, charge, claim or security interest not specifically set forth in the related mortgage loan schedule and has full right and authority subject to no interest or participation of, or agreement with, any other party, to sell and assign the mortgage loan pursuant to the terms of the mortgage loan purchase and sale agreement;

· The mortgage is a valid, subsisting, enforceable and perfected first lien on the mortgaged property (subject, as to enforceability, to bankruptcy and other creditor rights laws), including all improvements on the mortgaged property, subject only to (i) the lien of non-delinquent current real property taxes and assessments not yet due and payable; (ii) covenants, conditions and restrictions, rights of way, easements and other matters of public record as of the date of recording which are acceptable to mortgage lending institutions generally and either (A) which are referred to or otherwise considered in the appraisal made for the originator of the mortgage loan or (B) which do not adversely affect the appraised value (as evidenced by an appraisal referred to in such definition) of the mortgaged property; and (iii) other matters to which like properties are commonly subject that do not materially interfere with the benefits of the security intended to be provided by the mortgage or the use, enjoyment, value or marketability of the related mortgaged property;

· As of the closing date, there is no default, breach, violation or event of acceleration existing under the mortgage or the mortgage note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event permitting acceleration, and the seller and its affiliates have not waived any default, breach, violation or event permitting acceleration;

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· No fraud, error, omission, misrepresentation, gross negligence or similar occurrence with respect to the mortgage loan has taken place on the part of the seller or any originator or servicer or the mortgagor or on the part of any other party involved in the origination of the mortgage loan;

· Each mortgage loan secured by a first priority mortgage, other than any mortgage loan secured by a mortgaged property located in any jurisdiction as to which an opinion of counsel in lieu of title insurance is instead received, is covered by an ALTA lender’s title insurance policy or other form of policy or insurance generally acceptable to Fannie Mae or Freddie Mac, issued by a title insurer acceptable to Fannie Mae or Freddie Mac and qualified to do business in the jurisdiction where the mortgaged property is located;

· All payments due on each mortgage loan have been made and no mortgage loan was more than 30 days past due more than once in the preceding 12 months and any such delinquency did not exceed one payment;

· All taxes and government assessments which previously became due and owing have been paid by the borrower, or escrow funds from the borrower have been established to pay any such items;

· There is no offset, defense, counterclaim to any mortgage note, except as stated in the mortgage loan purchase and sale agreement;

· Each mortgaged property is undamaged by waste, vandalism, fire, hurricane, earthquake or other casualty adversely affecting the value of the mortgaged property;

· Each mortgage loan at the time of origination complied in all material respects with applicable state and federal laws including truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity and disclosure laws applicable to the mortgage loan;

· Each mortgage loan with a loan-to-loan value ratio at origination in excess of 80% is and will be subject to a primary mortgage insurance policy issued by a qualified insurer, which provides coverage in an amount at least equal to that which would be required by Fannie Mae.  All provisions of such mortgage insurance policy have been and are being complied with, such policy is in full force and effect, and all premiums due thereunder have been paid;

· All hazard insurance required under the mortgage loan sale agreement has been obtained and remains in full force and effect;

· The mortgage note and the related mortgage are genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or similar laws;

· Each mortgage loan is a “qualified mortgage” within Section 860G(a)(3) of the Code;

· None of the mortgage loans are high-cost as defined by the applicable local, state and federal predatory and abusive lending laws; and

· Each mortgage loan at the time it was made complied in all material respects with applicable local, state and federal predatory and abusive lending laws.

The seller may also repurchase a mortgage loan as to which there exists an uncured breach of certain representations and warranties made by the party from which the seller acquired the mortgage loan.

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The servicer or the trustee will promptly notify the relevant seller of any breach of any representation or warranty made or assigned by it in respect of a loan which materially and adversely affects the interests of the securityholders in such loan.  Unless otherwise specified in the prospectus supplement, if such seller cannot cause such breach to be cured within the time period specified in the prospectus supplement following notice from the servicer or the trustee, as the case may be, then such seller or other party named in the prospectus supplement will be obligated to repurchase such loan from the issuing entity at a purchase price equal to 100% of the unpaid principal balance thereof as of the date of the repurchase plus accrued interest thereon to the first day of the month following the month of repurchase at the loan rate (less any advances or amount payable as related servicing compensation if the seller is the servicer) and may elect to substitute for such loan a replacement loan that satisfies the criteria specified in the prospectus supplement.  This repurchase or substitution obligation will constitute the sole remedy available to holders of securities or the trustee for a breach of representation made or assigned by a seller.

If an election is being made to treat the issuing entity as a “real estate mortgage investment conduit” or “REMIC,” the servicer, the trustee or a holder of the related residual certificate generally will be obligated to pay any prohibited transaction tax which may arise in connection with any such repurchase or substitution and the trustee may require delivery of a satisfactory opinion of counsel that any such substitution will not cause the issuing entity to lose its status as a REMIC or otherwise subject the issuing entity to a prohibited transaction tax.

Neither the depositor nor the servicer will be obligated to purchase or substitute a loan if a seller or other party named in the prospectus supplement defaults on its obligation to do so, and no assurance can be given that sellers or such other parties will carry out their respective repurchase or substitution obligations with respect to loans.

Status of the Mortgage Loans and Related Assets in the Event of Insolvency of the Seller

Each transfer of a mortgage loan to the applicable seller, from the seller to the depositor and from the depositor to the issuing entity, will have been intended to be an absolute and unconditional sale of such mortgage loan.  However, in the event of bankruptcy or insolvency of a prior owner of a mortgage loan, a trustee in bankruptcy or a receiver or creditor of the insolvent party could attempt to recharacterize the sale of that mortgage loan by such insolvent party as a borrowing secured by a pledge of the mortgage loan.  Such an attempt, even if unsuccessful, could result in delays in payments on the securities of the related series.  If such an attempt were successful, it is possible that the affected mortgage loans could be sold in order to liquidate the assets of the insolvent entity.  In the case of the bankruptcy or insolvency of the seller, there can be no assurance that the proceeds of such liquidation would be sufficient to repay the securities in full.

DESCRIPTION OF THE SECURITIES

Each series of securities issued in the form of certificates will be issued pursuant to a pooling and servicing agreement among the depositor, a master servicer and the trustee or pursuant to agreements containing comparable provisions, as described in the prospectus supplement.  The loans will be serviced pursuant to one or more servicing agreements assigned to the trustee.  A form of pooling and servicing agreement and servicing agreement have been filed as exhibits to the registration statement of which this prospectus forms a part.  Each series of securities issued in the form of bonds will be issued pursuant to an indenture between the related issuing entity (formed by a trust agreement) and the entity named in the prospectus supplement as trustee or pursuant to agreements containing comparable provisions, as described in the prospectus supplement, and the related loans will be serviced by the servicer pursuant to a servicing agreement or a sale and servicing agreement.  A form of indenture, trust agreement and servicing agreement have been filed as exhibits to the registration statement of which this prospectus forms a part.

As used in this prospectus, “Agreement” means, with respect to a series consisting of certificates, the pooling and servicing agreement and related servicing agreements, and, with respect to a series consisting of bonds, the trust agreement, the indenture and the related servicing agreements or sale and servicing agreements, or, in either case, such other agreements containing comparable provisions as set forth in the prospectus supplement as the context requires.

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The trustee under the pooling and servicing agreement for a series, or, if applicable, the indenture trustee under the indenture and the owner trustee under the trust agreement for a series, will be identified in the applicable prospectus supplement.  References in this prospectus to “trustee” are intended to refer as to any particular series of securities to the pooling and servicing agreement trustee, indenture trustee or owner trustee, as applicable, unless the context requires otherwise.

A series of securities may consist of both bonds and certificates.  The provisions of each Agreement will vary depending upon the nature of the securities to be issued thereunder and the nature of the issuing entity.  The following are descriptions of the material provisions which may appear in each Agreement.  The descriptions are subject to, and are qualified in their entirety by reference to, all of the provisions of the specific Agreements applicable to series of securities.  The sponsor will provide a copy of the Agreements (without exhibits) relating to any series without charge upon written request of a holder of record of a security of such series addressed to the sponsor, One Belvedere Place, Suite 310, Mill Valley, California 94941, Attention: Secretary.

General

Unless otherwise described in the prospectus supplement the securities of each series:

· will be issued in book-entry or fully registered form, in the authorized denominations specified in the prospectus supplement;

· will, in the case of certificates, evidence specified beneficial ownership interests in the assets of the issuing entity;

· will, in the case of bonds, be secured by the assets of the issuing entity; and

· will not be entitled to payments in respect of the assets included in any other issuing entity established by the depositor.

Unless otherwise specified in the prospectus supplement, the securities will not represent obligations of the depositor or any affiliate of the depositor.  Certain of the loans may be guaranteed or insured as set forth in the prospectus supplement.  Each issuing entity will consist of, to the extent provided in the related Agreement:

· mortgage loans secured by properties of the types described in this prospectus;

· amounts held from time to time in the collection account, distribution account or other account established for a series of securities;

· mortgaged properties that secured a mortgage loan and that are acquired on behalf of the securityholders by foreclosure, deed in lieu of foreclosure or repossession;

· any reserve fund established pursuant to the agreements for a series of securities, if specified in the prospectus supplement;

· any security insurance policy, pool insurance policy, special hazard insurance policy, bankruptcy bond, interest rate cap agreement, interest rate swap agreement, currency swap agreement or other form of credit enhancement described in this prospectus and specified in the prospectus supplement;

· any servicing agreements relating to mortgage loans in the issuing entity, to the extent that these agreements are assigned to the trustee;

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· any primary mortgage insurance policies or limited purpose surety bonds relating to mortgage loans in the issuing entity;

· investments held in any fund or account or any guaranteed investment contract and income from the reinvestment of these funds, if specified in the prospectus supplement; and

· any other asset, instrument or agreement relating to the issuing entity described in this prospectus and specified in the prospectus supplement.

Each series of securities will be issued in one or more classes.  Each class of certificates of a series will evidence beneficial ownership of a specified percentage (which may be 0%) or portion of future interest payments and a specified percentage (which may be 0%) or portion of future principal payments on, and each class of bonds of a series will be secured by, the related issuing entity assets.  A series of securities may include one or more classes that are senior in right to payment to one or more other classes of securities of such series.  Certain series or classes of securities may be covered by insurance policies, surety bonds or other forms of credit enhancement, in each case as described in the prospectus supplement.  One or more classes of securities of a series may be entitled to receive distributions of principal, interest or any combination thereof.  Distributions on one or more classes of a series of securities may be made prior to one or more other classes, after the occurrence of specified events, in accordance with a schedule or formula or on the basis of collections from designated portions of the related issuing entity assets, in each case as specified in the prospectus supplement.  The timing and amounts of such distributions may vary among classes or over time as specified in the prospectus supplement.

Distributions of principal and interest (or, where applicable, of principal only or interest only) on the related securities will be made by the trustee or the payment agent on each payment date in proportion to the percentages described in the prospectus supplement.  Payment dates will occur either monthly, quarterly, semi-annually or at other specified intervals and will occur on the dates as are described in the prospectus supplement.  Distributions will be made to the persons in whose names the securities are registered at the close of business on the record date relating to payment date.  Distributions will be made in the manner described in the prospectus supplement to the persons entitled thereto at the address appearing in the register maintained for securityholders; provided, however, that, unless otherwise provided in the prospectus supplement, the final distribution in retirement of the securities will be made only upon presentation and surrender of the securities at the office or agency of the trustee or other person specified in the notice to securityholders of such final distribution.

The securities will be freely transferable and exchangeable at the corporate trust office of the trustee specified in the prospectus supplement.  No service charge will be made for any registration of exchange or transfer of securities of any series, but the trustee may require payment of a sum sufficient to cover any related tax or other governmental charge.

The sale or transfer of certain classes of securities to employee benefit plans and retirement arrangements that are subject to the provisions of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), may be restricted.  The prospectus supplement for each series of securities will describe any such restrictions.

As to each series, an election may be made to treat the related issuing entity or designated portions thereof as one or more REMICs as defined in the Code.  The prospectus supplement will specify whether a REMIC election is to be made.  Alternatively, the Agreement for a series of securities may provide that a REMIC election may be made at the discretion of the depositor or the servicer and may only be made if certain conditions are satisfied.  As to any such series, the terms and provisions applicable to the making of a REMIC election will be set forth in the prospectus supplement.  If such an election is made with respect to a series of securities, one of the classes will be designated as evidencing the sole class of residual interests in the REMIC.  All other classes of securities in such a series will constitute regular interests in the REMIC.  As to each series of securities with respect to which a REMIC election is to be made; the servicer, the trustee and/or a holder of the residual certificate will be obligated to take all actions required in order to comply with applicable laws and regulations.

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Distributions on Securities

General.  In general, the method of determining the amount of distributions on a particular series of securities will depend on the type of credit support, if any, that is used with respect to such series.  Set forth below are descriptions of various methods that may be used to determine the amount of distributions on the securities of a particular series.  The prospectus supplement for each series of securities will describe the method to be used in determining the amount of distributions on the securities of that series.

Distributions allocable to principal and interest on the securities will be made by the trustee out of, and only to the extent of, funds in the related collection account, including any funds transferred from any reserve account.  As between securities of different classes and as between distributions of principal (and, if applicable, between distributions of principal prepayments and scheduled payments of principal) and interest, distributions made on any payment date will be applied as specified in the prospectus supplement.  The prospectus supplement will also describe the method for allocating distributions among securities of a particular class.

Available Funds.  All distributions on the securities of each series on each payment date will be made from the available funds described below, in accordance with the terms described in the prospectus supplement and specified in the Agreement.  Available funds for each payment date will generally equal the amount on deposit in the related Collection Account on such payment date (net of related fees and expenses payable by the related issuing entity) other than amounts to be held therein for distribution on future payment dates.

Distributions of Interest. Interest will accrue on the aggregate principal balance of the securities (or, in the case of securities entitled only to distributions allocable to interest, the aggregate notional amount) of each class of securities (the “class security balance”) entitled to interest from the date, at the pass-through rate or interest rate, as applicable, and for the periods specified in the related prospectus supplement.  The pass-through rate or interest rate applicable to each class of securities will be specified in the related prospectus supplement as either a fixed rate or adjustable rate.  Any interest rate will be a conventional rate of interest on debt and will not be calculated with reference to a commodities or securities index.  Other than with respect to a class of securities that provides for interest that accrues but is not currently payable (“accrual securities”), to the extent funds are available for the payment of interest on a class of securities, interest accrued during each specified period on that class of securities entitled to interest will be distributable on the payment dates specified in the prospectus supplement until the aggregate class security balance of those securities has been distributed in full or, in the case of securities entitled only to distributions allocable to interest, until the aggregate notional amount of those securities is reduced to zero or for the period of time designated in the prospectus supplement.  Except in the case of the accrual securities, the original class security balance of each security will equal the aggregate distributions allocable to principal to which such security is entitled.  Distributions allocable to interest on each security that is not entitled to distributions allocable to principal will be calculated based on the notional amount of such security.  The notional amount of a security will not evidence an interest in or entitlement to distributions allocable to principal but will be used solely for convenience in expressing the calculation of interest and for certain other purposes.

Interest payable on the securities of a series on a payment date will include all interest accrued during the period specified in the prospectus supplement.  In the event interest accrues over a period ending two or more days prior to a payment date, the effective yield to securityholders will be reduced from the yield that would otherwise be obtainable if interest payable on the security were to accrue through the day immediately preceding such payment date, and the effective yield (at par) to securityholders will be less than the indicated coupon rate.

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With respect to any class of accrual securities, as specified in the prospectus supplement, any interest that has accrued but is not paid on a given payment date may be added to the aggregate class security balance of such class of securities on that payment date and thereafter may itself accrue interest as part of the aggregate class security balance. Distributions of interest on any class of accrual securities will commence only after the occurrence of the events specified in such prospectus supplement. Prior to the occurrence of those specified events, the beneficial ownership interest in the issuing entity or the principal balance, as applicable, of such class of accrual securities, as reflected in the aggregate class security balance of such class of accrual securities, will increase on each payment date by the amount of interest that accrued on that class of accrual securities during the preceding interest accrual period.

Distributions of Principal.  The prospectus supplement will specify the method by which the amount of principal to be distributed on the securities on each payment date will be calculated and the manner in which such amount will be allocated among the classes of securities entitled to distributions of principal.  The aggregate class security balance of any class of securities entitled to distributions of principal generally will equal the aggregate original class security balance specified in the related prospectus supplement for that class, reduced by all distributions allocable to principal previously made to the holders of that class of securities and by any allocations of realized losses to that class, and, in the case of accrual securities, increased by all interest accrued but not then distributable on such accrual securities, as specified in the prospectus supplement.  The aggregate class security balance for adjustable rate securities may also be subject to the effects of negative amortization.

If so provided in the prospectus supplement, one or more classes of securities will be entitled to receive all or a disproportionate percentage of the principal payments or prepayments made with respect to a payment date in the percentages and under the circumstances or for the periods specified in that prospectus supplement. This allocation of principal payments or prepayments to that class or those classes of securities will have the effect of accelerating the amortization of those securities while increasing the interests evidenced by one or more other classes of securities issued by the related trust. Increasing the interests of the other classes of securities relative to that of certain securities is intended to preserve the availability of the subordination provided by those other classes of securities.

  Unscheduled Distributions.  If specified in the prospectus supplement, the securities will be subject to receipt of distributions before the next scheduled payment date under the circumstances and in the manner described below and in such prospectus supplement.  If applicable, the trustee will be required to make these unscheduled distributions on the day and in the amount specified in the prospectus supplement if, due to substantial payments of principal (including principal prepayments, redemptions of securities or termination of the issuing entity) on the issuing entity assets, the trustee or the servicer determines that the funds available or anticipated to be available from the collection account and, if applicable, any reserve account, on the next scheduled payment date may be insufficient to make required distributions on the securities on that payment date.  Unless otherwise specified in the prospectus supplement, the amount of any such unscheduled distribution that is allocable to principal will not exceed the amount that would otherwise have been required to be distributed as principal on the securities on the next payment date.  Unless otherwise specified in the prospectus supplement, the unscheduled distributions will include interest at the applicable pass-through rate, if any, or interest rate, if any, on the portion of the unscheduled distribution that is allocable to principal for the period and to the date specified in the prospectus supplement.

Categories of Classes of Securities

The securities of any series may be comprised of one or more classes. These classes generally fall into different categories. The following chart identifies and generally defines certain of the more typical categories of security classes. The prospectus supplement for a series of securities may identify the classes which comprise that series by reference to the following categories.

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Categories of Classes	Definition
PRINCIPAL TYPES
Accretion Directed	A class that receives principal payments that are funded from collections that would have otherwise funded interest payments on the accreted interest from specified accrual classes.  An accretion directed class also may receive principal payments from principal paid on the issuing entity assets.
Component Securities	A class consisting of “components.” The components of a class of component securities may have different principal and/or interest payment characteristics but together constitute a single class.  Each component of a class of component securities may be identified as falling into one or more of the categories in this chart.
Notional Amount Securities	A class having no principal balance and bearing interest on the related notional amount.  The notional amount is used for purposes of the determination of interest distributions.
Planned Principal Class or PACs	A class that is designed to receive principal payments using a predetermined principal balance schedule derived by assuming two constant prepayment rates for the issuing entity assets.  These two rates are the endpoints for the “structuring range” for the planned principal class.  The planned principal classes in any series of securities may be subdivided into different categories (e.g., primary planned principal classes, secondary planned principal classes and so forth) having different effective structuring ranges and different principal payment priorities.  The structuring range for the secondary planned principal class of a series of securities will be narrower than that for the primary planned principal class of such series.
Scheduled Principal Class	A class that is designated to receive principal payments using a predetermined principal balance schedule but is not designated as a planned principal class or targeted principal class.  In many cases, the schedule is derived by assuming two constant prepayment rates for the issuing entity assets.  Theses two rates are the endpoints for the “structuring range” for the scheduled principal class.

Sequential Pay

Classes that receive principal payments in a prescribed sequence, that do not have predetermined principal balance schedules and that receive payments of principal, when amounts are available to make payments of principal, continuously from the first payment date on which they receive principal until they are retired.  A single class that receives principal payments before or after all other classes in the same series of securities may be identified as a sequential pay class.

Strip

A class that receives a constant proportion, or “strip,” of the principal payments on the issuing entity assets.  The constant proportion of such principal payments may or may not vary for each asset included in the issuing entity and will be calculated in the manner described in the prospectus supplement.  These classes may also receive payments of interest.

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Support Class (or companion class)	A class that receives principal payments on any payment date only if scheduled payments have been made on specified planned principal classes, targeted principal classes and/or scheduled principal classes.
Targeted Principal Class	A class that is designated to receive principal payments using a predetermined principal balance schedule derived by assuming a single constant prepayment rate for the issuing entity assets.
INTEREST TYPES
Accrual	A class that adds accrued interest otherwise distributable on the class to the principal balance of the class on each applicable payment date.  The accretion may continue until some specified event has occurred or until the class is retired.
Fixed Rate	A class with a pass-through rate or interest rate that is fixed throughout the life of the class.
Floating Rate	A class with an interest rate that resets periodically based upon a designated index and that varies directly with changes in that index.
Inverse Floating Rate	A class with an interest rate that resets periodically based upon a designated index and that varies inversely with changes in such index.
Interest Only or IO	A class that receives some or all of the interest payments made on the issuing entity assets and little or no principal.  Interest only certificates have either a nominal principal balance or a notional amount.  A nominal principal balance represents actual principal that will be paid on the class.  It is referred to as nominal since it is extremely small compared to other classes.  A notional amount is an amount used as a reference to calculate the amount of interest due on an interest only security but is never actually paid out as principal on the class.
Partial Accrual	A class that adds a portion of the amount of accrued interest thereon to the principal balance of the class on each applicable payment date, with the remainder of the accrued interest to be distributed currently as interest on the class on each applicable payment date.  The accretion of designated amounts of the interest may continue until a specified event has occurred or until the class is retired.

Principal Only or PO	A class that does not bear interest and is entitled to receive only distributions in respect of principal.
Variable Rate	A class with a pass-through rate of interest rate that resets periodically and is calculated by reference to the rate or rates of interest applicable to specified assets or instruments (e.g., the loan rates borne by the loans in the issuing entity).

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Subordinate Securities.  A series of securities may include one or more classes of subordinate securities that provide some or all of the credit enhancement for the senior securities in the series.  The rights of holders of some classes of securities (the “subordinate securities”) to receive distributions will be subordinate in right and priority to the rights of holders of senior securities of the series (the “senior securities”) but only to the extent described in the prospectus supplement.  If the mortgage loans are divided into separate asset groups, evidenced by separate classes, credit enhancement may be provided by a cross-support feature.  This feature requires in general that distributions be made to senior securities prior to making distributions on subordinate securities backed by assets in another asset group within the issuing entity.  Unless rated in one of the four highest rating categories by at least one nationally recognized statistical rating organization (each a “rating agency”), subordinate securities will not be offered by this prospectus or the prospectus supplement.  See “CREDIT ENHANCEMENT — Subordination” in this prospectus.

Compensating Interest

Payments may be received on loans in the issuing entity which represent either a principal prepayment in full or a principal payment which is in excess of the scheduled monthly payment and which is not intended to cure a delinquency.  If specified in the prospectus supplement, the servicer will be required to remit to the trustee with respect to each of these types of payments during any due period an amount equal to either (1) the excess, if any, of (a) 30 days’ interest on the principal balance of the related loan at the loan rate net of the per annum rate at which the servicer’s servicing fee accrues, over (b) the amount of interest actually received on the loan during the related due period, net of the servicer’s servicing fee or (2) such other amount as described in the prospectus supplement.  This amount remitted to the trustee by the servicer will be limited to amounts otherwise payable to the servicer as servicing compensation.

 Reports to Securityholders

Prior to or concurrently with each distribution on a payment date, the servicer or the trustee will furnish to each securityholder of record of the related series a statement setting forth, to the extent applicable to such series of securities, among other things:

· any applicable record dates, accrual dates, determination dates for calculating distributions and actual distribution dates for the distribution period;

· the amount of cashflows received and the sources thereof for distributions, fees and expenses;

· the amount of fees and expenses accrued and paid, the purpose of such fees and expenses and the identification of each payee, including the amount of fees paid to the trustee, the custodian, the master servicer, the securities administrator, the servicers and subservicers for such distribution date;

· the amount of payments accrued and paid with respect to credit enhancement or other support for the related transaction, including, insurance premiums and payments to swap or cap providers, the purpose of such payments and the identification of each payee;

· the amount of the distribution with respect to each class of securities;

· the amount of such distributions allocable to principal, separately identifying the aggregate amount of any prepayments or other unscheduled recoveries of principal included in such amount;

· the amount of such distributions allocable to interest;

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· the class principal balance of each class of securities (other than interest-only securities) as of such distribution date together with the principal balance of the securities of the related class (based on a security in the original principal balance of $1,000), after giving effect to any payment of principal on such distribution date;

· the class notional balance of each class of interest only securities as of such distribution date together with the principal balance of the securities of the related class (based on a security in the original principal balance of $1,000), after giving effect to any payment of principal on such distribution date;

· if applicable, a statement that interest payable on one or more classes of securities on such distribution date represents interest accrued on those classes at a rate equal to the applicable available funds cap, net weighted average cap or other limitation;

· the amount, terms and general purpose of any Advances for such distribution date, including the general use of funds advanced and the general source of funds for reimbursements, and the amount of any outstanding Advances remaining after such distribution date;

· the purchase price deposited into the collection account with respect to any mortgage loan;

· the total number of mortgage loans and the aggregate principal balances thereof, together with the number and aggregate principal balances of mortgage loans (a) 30-59 days delinquent, (b) 60-89 days delinquent and (c) 90 or more days delinquent;

· the number and aggregate principal balance of mortgage loans in foreclosure proceedings (and whether any such mortgage loans are also included in any of the statistics described in the preceding clause);

· the pool balance as of such distribution;

· any applied loss amount for any class of securities;

· the amount of any basis risk shortfall with respect to any class of securities;

· the amount of excess cash flow or excess spread and the disposition of such excess cash flow or excess spread;

· the overcollateralization amount for such distribution date;

· the amount of any shortfalls in distributions of interest with respect to each class of securities on such distribution date and the cumulative amount of any unreimbursed shortfalls in distributions of interest from prior distribution dates;

· any amounts drawn on any credit enhancement or other support, as applicable, and the amount of coverage remaining under any such enhancement, if known and applicable;

· delinquency and loss information for the distribution period with respect to the mortgage loans in the pool;

· the number of properties and the unpaid principal balance with respect to each property relating to defaulted mortgage loans in the issuing entity;

· the beginning and ending balances of the distribution account, reserve account or other transaction account and any material account activity during the related period;

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· any material modifications, extensions or waivers to pool asset terms, fees, penalties or payments during the distribution period or that have cumulatively become material over time;

· information with respect to material breaches of pool asset representations or warranties or transaction covenants;

· information on ratio, coverage or other tests used for determining any early amortization, liquidation or other performance trigger and whether the trigger was met;

· information regarding any changes to the mortgage loans in the pool, including any additions or removals in connection with a pre-funding period, repurchases or substitutions;

· the amounts on deposit in any pre-funding account;

· information regarding any material changes in the solicitation, credit granting, underwriting, origination, acquisition or pool selection criteria or procedures, as applicable, used to originate, acquire or select additional mortgage loans acquired during a pre-funding period or in connection with a substitution; and

· such other information as is required under the applicable Agreement.

In addition, within a reasonable period of time after the end of each calendar year, the trustee will furnish a report to each person that was a holder of record of any class of securities at any time during such calendar year.  This report will include information as to the aggregate of amounts reported pursuant to the first three clauses above for such calendar year or, in the event such person was a holder of record of a class of securities during a portion of such calendar year, for the applicable portion of such year.

The trustee may, at its option, distribute or cause to be distributed monthly statements to securityholders by first class mail or by making such statement available via an internet website.  In the event that an internet website is used, securityholders will be entitled to receive paper copies of monthly statements by mail if they so request.

Optional Termination

If specified in the prospectus supplement for a series of securities, the depositor, the servicer or master servicer, or any other designated entity may, at its option, purchase or direct the sale of a portion of the mortgage loans of the issuing entity, or cause an early termination of the issuing entity by purchasing all of the mortgage loans from the issuing entity or directing the sale of the mortgage loans.  This termination may occur on a date on or after the date on which either (1) the total principal balance of the mortgage loans is less than a specified percentage of the initial total principal balance, or (2) the total principal balance of the securities (or of certain classes in a series) is less than a specified percentage of their initial total principal balance, or on or after another date, as described in the prospectus supplement.  If specified in the prospectus supplement, the trustee or other specified party will, either upon direction of a specified party or parties or upon the occurrence of a specified date or event, solicit bids for purchase of the assets of the issuing entity.  This bid process may be subject to a minimum bid price.

The optional termination described in this section will be in addition to terminations that may result from other events, such as events of default described elsewhere herein.

Optional Purchase of Securities

The prospectus supplement for a series of securities may provide that one or more classes of the series may be purchased, in whole or in part, at the option of the depositor, the servicer or master servicer, or another designated entity (including holders of another class of securities), at specified times and purchase prices, and under particular circumstances.  Notice of any purchase must be given by the trustee or other specified party prior to the optional purchase date, as specified in the prospectus supplement.

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Other Purchases or Redemption

If specified in the prospectus supplement for a series, any class of securities in the series may be subject to redemption, in whole or in part, at the option of the issuing entity, or to mandatory purchase by the depositor, the servicer or master servicer, or another designated entity at specified times, and under particular circumstances, set forth in the prospectus supplement (but in no event at the request or discretion of the holders of that class).  The redemption price will be equal to the outstanding principal of the securities together with accrued interest thereon.  The other terms and conditions of any redemption or mandatory purchase with respect to a class of securities will be described in the prospectus supplement.

The depositor may also have the option to obtain for any series of securities one or more guarantees from a company or companies acceptable to the rating agencies.  As specified in the prospectus supplement, these guarantees may provide for one or more of the following for any series of securities:

· call protection for any class of securities of a series;

· a guarantee of a certain prepayment rate of some or all of the mortgage loans underlying the series; or

· certain other guarantees described in the prospectus supplement.

Book-Entry Registration of Securities

As described in the prospectus supplement, if not issued in fully registered form, each class of securities will be registered as book-entry securities.  Persons acquiring beneficial ownership interests in the securities, or “beneficial owners,” will hold their securities through DTC in the United States, or Clearstream Banking, societe anonyme (formerly Cedelbank), commonly known as Clearstream, Luxembourg, or the Euroclear system, in Europe.  Clearstream, Luxembourg and Euroclear will hold omnibus positions for Clearstream, Luxembourg participants and Euroclear participants, respectively, through customers’ securities accounts in Clearstream, Luxembourg’s and Euroclear’s names on the books of their respective depositaries.  The depositaries will hold these positions in customers’ collection accounts in the depositaries names on DTC’s books.  The prospectus supplement will state if the securities will be in physical rather than book-entry form.

DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a clearing corporation within the meaning of the Uniform Commercial Code and a clearing agency registered under Section l7A of the Securities Exchange Act.  DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between its participants through electronic book-entry changes in their accounts, eliminating the need for physical movement of certificates.  DTC’s participants include securities brokers and dealers, banks, trust companies and clearing corporations and may include other organizations.  Indirect access to the DTC system also is available to indirect participants such as brokers, dealers, banks and trust companies that clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly.

Transfers between DTC participants will occur according to DTC rules.  Transfers between Clearstream, Luxembourg participants and Euroclear participants will occur according to their applicable rules and operating procedures.

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Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Clearstream, Luxembourg participants or Euroclear participants, on the other, will be effected in DTC according to DTC rules on behalf of the relevant European international clearing system by its depositary; however, those cross-market transactions will require the counterparty to deliver instructions to the relevant European international clearing system according to the counterparty 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 its depositary to take action to effect final settlement on its behalf by delivering or receiving securities in DTC, and making or receiving payment according to normal procedures for same-day funds settlement applicable to DTC, Clearstream, Luxembourg participants and Euroclear participants may not deliver instructions directly to the depositaries.

Because of time-zone differences, credits of securities in Clearstream, Luxembourg or Euroclear resulting from a transaction with a DTC participant will be made during the subsequent securities settlement processing, dated the business day following the DTC settlement date, and the credits or any transactions in the securities settled during the processing will be reported to the relevant Clearstream, Luxembourg participant or Euroclear participant on that business day.  Cash received in Clearstream, Luxembourg or Euroclear resulting from sales or securities by or through a Clearstream, Luxembourg participant or a Euroclear participant to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Clearstream, Luxembourg or Euroclear cash account only as of the business day following settlement in DTC.

Clearstream, Luxembourg was incorporated in 1970 as Cedel S.A., a company with limited liability under Luxembourg law (a societe anonyme).  Cedel S.A. subsequently changed its name to Cedelbank.  On January 10, 2000, Cedelbank’s parent company, Cedel International, societe anonyme, merged its clearing, settlement and custody business with that of Deutsche Borse Clearing AG.

Clearstream, Luxembourg holds securities for its customers and facilitates the clearance and settlement of securities transactions between Clearstream, Luxembourg customers through electronic book-entry changes in accounts of Clearstream, Luxembourg customers, thereby eliminating the need for physical movement of certificates.  Transactions may be settled by Clearstream, Luxembourg in any of 36 currencies, including U.S. dollars. Clearstream, Luxembourg provides, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing.  Clearstream, Luxembourg also deals with domestic securities markets in over 30 countries through established depository and custodial relationships.  Clearstream, Luxembourg is registered as a bank in Luxembourg, and as such is subject to regulation by the Commission de Surveillance du Secteur Financier which supervises Luxembourg banks.  Clearstream, Luxembourg’s customers are world-wide financial institutions including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations.  Clearstream, Luxembourg’s U.S. customers are limited to securities brokers and dealers, and banks.  Currently, Clearstream, Luxembourg has approximately 2,000 customers located in over 80 countries, including all major European countries, Canada, and the United States.  Indirect access to Clearstream, Luxembourg is available to other institutions that clear through or maintain a custodial relationship with an account holder of Clearstream, Luxembourg.  Clearstream, Luxembourg has established an electronic bridge with Morgan Guaranty Trust Company of New York as the operator of the Euroclear System in Brussels to facilitate settlement of trades between Clearstream, Luxembourg and Euroclear.

Euroclear was created in 1968 to hold securities for participants of Euroclear and to clear and settle transactions between Euroclear participants through simultaneous electronic book-entry delivery against payment, thereby eliminating both the need for physical movement of securities and any risk from lack of simultaneous transfers of securities and cash. Transactions may now be sealed in any of 37 currencies, including United States dollars. Euroclear includes various other services, including securities lending and borrowing and interfaces with domestic markets in several countries generally similar to the arrangements for cross-market transfers with DTC described above. Euroclear is operated by the Brussels, Belgium office of Morgan Guaranty Trust Company of New York, under contract with Euroclear Clearance Systems S.C., a Belgian cooperative corporation. All operations are conducted by the Euroclear operator, and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear operator, not Euroclear Clearance. Euroclear Clearance establishes policy for Euroclear on behalf of Euroclear participants. Euroclear participants include banks (including central banks), securities brokers and dealers, and other professional financial intermediaries. Indirect access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly.

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The Euroclear operator is the Belgian branch of a New York banking corporation which is a member bank of the Federal Reserve System.  As such, it is regulated and examined by the Board of Governors of the Federal Reserve System and the New York State Banking Department, as well as the Belgian Banking Commission.

Securities clearance accounts and cash accounts with the Euroclear operator are governed by the Terms and Conditions Governing Use of Euroclear and the related operating procedures of the Euroclear system and applicable Belgian law.  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 securities 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.

Under a book-entry format, securityholders that are not DTC participants or indirect participants but desire to purchase, sell or otherwise transfer ownership of securities registered in the name of Cede, as nominee of DTC, may do so only through participants and indirect participants.  In addition, these securityholders will receive all distributions of principal of and interest on the securities from the trustee through DTC and its participants.  Securityholders may receive payments after the payment date because DTC will forward these payments to its participants, which thereafter will be required to forward these payments to indirect participants or securityholders.  Unless and until physical securities are issued, it is anticipated that the only securityholder will be Cede, as nominee of DTC, and that the beneficial holders of securities will not be recognized by the trustee as securityholders under the Agreements.  Securityholders which are not DTC participants will only be permitted to exercise their rights under the Agreements through DTC or through its participants.

Under the rules, regulations and procedures creating and affecting DTC and its operations, DTC is required to make book-entry transfers among its participants and is required to receive and transmit payments of principal of and interest on the securities.  DTC’s participants and indirect participants are required to make book-entry transfers and receive and transmit payments on behalf of their respective securityholders.  Accordingly, although securityholders will not possess physical securities, the rules provide a mechanism by which securityholders will receive distributions and will be able to transfer their interests.

Unless and until physical securities are issued, securityholders who are not DTC participants may transfer ownership of securities only through DTC participants by instructing those participants to transfer securities, through DTC for the account of the purchasers of the securities, which account is maintained with their respective participants.  Under DTC’s rules and in accordance with DTC’s normal procedures, transfers of ownership of securities will be executed through DTC and the accounts of the respective participants at DTC will be debited and credited.  Similarly, the respective participants will make debits or credits, as the case may be, on their records on behalf of the selling and purchasing securityholders.

Because DTC can only act on behalf of its participants, who in turn act on behalf of indirect participants and some banks, the ability of a securityholder to pledge securities to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of the securities may be limited due to the lack of a physical certificate for the securities.

DTC advises that it will take any action permitted to be taken by a securityholder under the Agreements only at the direction of one or more of its participants to whose account the securities are credited.  Additionally, DTC advises that it will take actions only at the direction of and on behalf of its participants whose holdings include current principal amounts of outstanding securities that satisfy the minimum percentage established in the Agreements.  DTC may take conflicting actions if directed by its participants.

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Any securities initially registered in the name of Cede, as nominee of DTC, will be issued in fully registered, certificated form to securityholders or their nominees, rather than to DTC or its nominee only under the events specified in the Agreements and described in the prospectus supplement.  Upon the occurrence of any of the events specified in this prospectus or in the Agreements and the prospectus supplement, DTC will be required to notify its participants of the availability through DTC of physical certificates.  Upon surrender by DTC of the securities and receipt of instruction for re-registration, the trustee will issue the securities in the form of physical certificates, and thereafter the trustee will recognize the holders of the physical certificates as securityholders.  Thereafter, payments of principal of and interest on the securities will be made by the trustee directly to securityholders in accordance with the procedures set forth in the Agreements.  The final distribution of any security whether physical certificates or securities registered in the name of Cede, however, will be made only upon presentation and surrender of the securities on the final payment date at the office or agency specified in the notice of final payment to securityholders.

None of the depositor, the servicer, any finance subsidiary, or the trustee will have any liability for any actions taken by DTC or its nominee or Cedel or Euroclear, including, without limitation, actions for any aspect of the records relating to or payments made on account of the securities held by Cede, as nominee for DTC, or for maintaining, supervising or reviewing any records relating to the securities.

CREDIT ENHANCEMENT

General

Credit enhancement may be provided with respect to one or more classes of a series of securities or with respect to the related issuing entity assets and will be described in the prospectus supplement for such series of securities.  Credit enhancement may be in the form of:

· the subordination of one or more classes of the securities of such series;

· a limited financial guaranty policy issued by an entity named in the prospectus supplement;

· the establishment of one or more reserve accounts;

· the use of a cross-collateralization feature;

· use of a mortgage pool insurance policy;

· excess spread;

· overcollateralization;

· letter of credit or demand note;

· guaranteed investment contract;

· primary mortgage insurance;

· other pledged assets;

· corporate guarantees;

· surety bond;

· special hazard insurance policy;

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· bankruptcy bond;

· derivatives; and

· any combination of the foregoing.

Unless otherwise specified in the prospectus supplement, credit enhancement will not provide protection against all risks of loss and will not guarantee repayment of the entire principal balance of the securities and interest on the securities.  If losses occur which exceed the amount covered by credit enhancement or which are not covered by the credit enhancement, securityholders will bear their allocable share of any deficiencies.

If specified in the prospectus supplement, the coverage provided by one or more of the forms of credit enhancement described in this prospectus may apply concurrently to two or more separate issuing entities.  If applicable, the prospectus supplement will identify the issuing entities to which such credit enhancement relates and the manner of determining the amount of coverage provided to those issuing entities by the credit enhancement and of the application of that coverage to the related issuing entities.

Subordination

If specified in the prospectus supplement, protection afforded to holders of one or more classes of securities of a series may be made by means of a subordination feature.  This protection may be accomplished by providing a preferential right to holders of senior securities in a series to receive distributions in respect of scheduled principal, principal prepayments, interest or any combination thereof that otherwise would have been payable to holders of subordinate securities in that series, under the circumstances and to the extent specified in the prospectus supplement.  Subordination protection may also be afforded to the holders of senior securities by reducing the ownership interest (if applicable) of the related subordinate securities, which protection may or may not be in conjunction with the protection described in the immediately preceding sentence.  Finally, protection may be afforded to the holders of senior securities by application of a subordination feature in another manner as described in the prospectus supplement.

If a subordination feature is present with respect to a given series, delays in receipt of scheduled payments on the loans and losses on defaulted loans may be borne first by the various classes of subordinate securities and only thereafter by the various classes of senior securities, in each case under the circumstances and subject to the limitations specified in the prospectus supplement.  The aggregate distributions in respect of delinquent payments on the loans over the lives of the securities or at any time, the aggregate losses in respect of defaulted loans which must be borne by the subordinate securities by virtue of subordination and the amount of the distributions otherwise distributable to the subordinate securityholders that will be distributable to senior securityholders on any payment date all may be limited as specified in the prospectus supplement.  If aggregate distributions in respect of delinquent payments on the loans or aggregate losses in respect of the related loans were to exceed the amount specified in the prospectus supplement, then holders of senior securities would experience losses.

As specified in the prospectus supplement, all or any portion of distributions otherwise payable to holders of subordinate securities on any payment date may instead be deposited into one or more reserve accounts established with the trustee or distributed to holders of senior securities.  The prospectus supplement will describe whether deposits are made into a reserve account on each payment date, only during specified periods, only until the balance in the related reserve account has reached a specified amount, only to replenish amounts in the related reserve account following payments from the reserve account to holders of senior securities or otherwise.  Amounts on deposit in a reserve account may be released to the holders of certain classes of securities at the times and under the circumstances specified in the prospectus supplement.

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If specified in the prospectus supplement, various classes of senior securities and subordinate securities may themselves be subordinate in their right to receive certain distributions to other classes of senior and subordinate securities, respectively, through a cross-collateralization mechanism or otherwise.  As between classes of senior securities and as between classes of subordinate securities, distributions may be allocated among the classes:

· in the order of their scheduled final payment dates;

· in accordance with a schedule or formula;

· in relation to the occurrence of events; or

· otherwise, as specified in the prospectus supplement.

As between classes of subordinate securities, payments to holders of senior securities on account of delinquencies or losses and payments to any reserve account will be allocated as specified in the prospectus supplement.

Derivative Instruments

The issuing entity may include one or more derivative instruments for credit enhancement purposes, as described in this section.  Derivative instruments included in any issuing entity will be used only in a manner that reduces or alters risk resulting from the mortgage loans or other assets in the pool, and only in a manner such that the return on the offered securities will be based primarily on the performance of the mortgage loans or other assets in the pool.  Derivative instruments may include (1) interest rate swaps (or caps, floors or collars) or yield supplement agreements, (2) currency swaps or currency options and (3) market value swaps.

For a further description of these derivative instruments, see “Derivatives” below.

Insurance Policies, Surety Bonds and Guaranties

If provided in the prospectus supplement, deficiencies in amounts otherwise payable on the securities or certain classes of securities will be covered by insurance policies and/or surety bonds provided by one or more insurance companies or sureties.  These instruments may cover, with respect to one or more classes of securities, timely distributions of interest and/or full distributions of principal on the basis of a schedule of principal distributions set forth in or determined in the manner specified in the prospectus supplement.  In addition, if specified in the prospectus supplement, an issuing entity may also include a bankruptcy bond, a special hazard insurance policy or other insurance or guaranties for the purpose of:

· maintaining timely payments or providing additional protection against losses on the assets included in such issuing entity;

· paying administrative expenses; or

· establishing a minimum reinvestment rate on the payments made in respect of those assets or principal payment rate on those assets.

These arrangements may include agreements under which securityholders are entitled to receive amounts deposited in various accounts held by the trustee upon the terms specified in the prospectus supplement.

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Special Hazard Insurance Policies

If so specified in the applicable prospectus supplement, a separate special hazard insurance policy will be obtained for the related issuing entity from the insurer named in the prospectus supplement.  The special hazard insurance policy, subject to the limitations described in the applicable prospectus supplement, will protect against loss by reason of damage to mortgaged properties caused by certain hazards not insured against under the standard form of hazard insurance policy for the respective states in which the mortgaged properties are located.  The amount and principal terms of any such coverage will be set forth in the prospectus supplement.

Cross Support

If specified in the prospectus supplement, separate groups of assets included in an issuing entity may be evidenced by or secure only specified classes of the related series of securities.  If this is the case, credit support may be provided by a cross support feature.  This cross support feature would require that cashflow received with respect to a particular group of assets first be distributed as payments on the class of securities specifically related to those assets, but after the necessary payments with respect to that class were made, remaining cashflow from those assets would be available to make payments on one or more other classes issued by the same issuing entity.  The prospectus supplement for a series of securities which includes a cross support feature will describe the manner and conditions for applying this cross support feature.

Reserve Accounts

If specified in the prospectus supplement, credit support with respect to a series of securities will be provided by the establishment and maintenance with the related trustee, in trust, of one or more reserve accounts for the series. The prospectus supplement will specify whether or not any reserve accounts so established will be included in the issuing entity for such series.

Amounts to be deposited in the reserve account for a series will be specified in the prospectus supplement and will be funded by:

· the retention by the servicer of certain payments on the mortgage loans;

· the deposit with the trustee, in escrow, by the depositor of a pool of mortgage loans or other assets with the total principal balance, as of the related cut-off date, set forth in the related prospectus supplement;

· an initial deposit;

· any combination of the foregoing; or

· some other manner as specified in the related prospectus supplement.

Any amounts on deposit in the reserve account and the proceeds of any other instrument deposited therein upon maturity will be held in cash or will be invested in investments consisting of United States government securities and other high-quality investments acceptable to the related rating agencies as being consistent with the ratings of the securities. See THE AGREEMENTS—Servicing Provisions—Investment of Funds.” Any instrument deposited in a reserve account will name the trustee, in its capacity as trustee for securityholders, or such other entity as is specified in the prospectus supplement, as beneficiary and will be issued by an entity acceptable to each rating agency that rates the securities. Additional information with respect to instruments deposited in the reserve accounts will be set forth in the prospectus supplement.

Any amounts on deposit in the reserve accounts and payments on instruments deposited therein will be available for withdrawal from the reserve account for distribution to the holders of securities of the related series for the purposes, in the manner and at the times specified in the prospectus supplement.

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Pool Insurance Policies

If specified in the prospectus supplement, a separate pool insurance policy will be obtained for the pool and issued by the credit enhancer named in the prospectus supplement.  Each pool insurance policy will, subject to the limitations described below, cover loss by reason of default in payment on loans in the pool in an amount equal to a percentage specified in the prospectus supplement of the aggregate principal balance of those loans on the cut-off date.  As more fully described below, the servicer will present claims under the pool insurance policy to the credit enhancer on behalf of itself, the trustee and the holders of the securities of the related series.  The pool insurance policies, however, are not blanket policies against loss, since claims thereunder may only be made respecting particular defaulted loans and only upon satisfaction of certain conditions precedent described below.  The pool insurance policies generally will not cover losses due to a failure to pay or denial of a claim under a primary mortgage insurance policy.

The pool insurance policies generally will provide that no claims may be validly presented unless:

· any required primary mortgage insurance policy is in effect for the defaulted loan and a claim thereunder has been submitted and settled;

· hazard insurance on the related property has been kept in force and real estate taxes and other protection and preservation expenses have been paid;

· if there has been physical loss or damage to the property, it has been restored to its physical condition (reasonable wear and tear excepted) at the time of issuance of the policy; and

· the insured has acquired good and merchantable title to the property free and clear of liens except certain permitted encumbrances.

Upon satisfaction of these conditions, the credit enhancer will have the option either:

· to purchase the property securing the defaulted loan at a price equal to the principal balance thereof plus accrued and unpaid interest at the loan rate to the date of such purchase and certain expenses incurred by the servicer on behalf of the trustee and securityholders, net of certain amounts paid or assumed to have been paid under the related primary mortgage insurance policy; or

· to pay the amount by which the sum of the principal balance of the defaulted loan plus accrued and unpaid interest at the loan rate to the date of payment of the claim and the aforementioned expenses exceeds the proceeds received from an approved sale of the property, net of certain amounts paid or assumed to have been paid under the related primary mortgage insurance policy.

If any property securing a defaulted loan is damaged and proceeds, if any, from the related hazard insurance policy or the applicable special hazard insurance policy are insufficient to restore the damaged property to a condition sufficient to permit recovery under the pool insurance policy, the servicer will not be required to expend its own funds to restore the damaged property unless it determines that (a) such a restoration will increase the proceeds to securityholders on liquidation of the loan after reimbursement of the servicer for its expenses and (b) those expenses it incurs will be recoverable by it through proceeds of the sale of the property or proceeds of the related pool insurance policy or any related primary mortgage insurance policy.

Like many primary insurance policies, the pool insurance policies may not insure against loss sustained by reason of default arising from, among other things:

· fraud or negligence in the origination or servicing of a loan, including misrepresentation by the borrower, the originator or persons involved in the origination of the loan;

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· failure to construct a property in accordance with plans and specifications; or

· losses arising from special hazards, such as earthquakes, floods, mudslides or vandalism.

A failure of coverage attributable to one of these events might result in a breach of the related representations regarding the loan and might give rise to an obligation on the part of the seller or other entity to repurchase the defaulted loan if it is unable to cure the breach.  Many primary mortgage policies do not cover, and no pool insurance policy will cover, a claim in respect of a defaulted loan if the servicer of the loan was not approved by the applicable insurer either at the time of default or thereafter.

The amount of coverage available under each pool insurance policy generally will be reduced over the life of the related securities by the positive difference, if any, between the aggregate dollar amount of claims paid under the pool insurance policy minus the aggregate of the net amounts realized by the credit enhancer upon disposition of the related foreclosed properties. The amount of claims paid will include certain expenses incurred by the servicer as well as accrued interest on delinquent loans to the date of payment of the claim or another date set forth in the prospectus supplement. Accordingly, if aggregate net claims paid under any pool insurance policy reach the original policy limit, coverage under that pool insurance policy will be exhausted and any further losses will be borne by the related securityholders.

Bankruptcy Bonds

In the event of a personal bankruptcy of a borrower, a bankruptcy court may establish the value of the related mortgaged property or cooperative dwelling at an amount less than the then outstanding principal balance of the related mortgage loan.  The amount of the secured debt could be reduced to that lesser value, and the holder of the mortgage loan thus would become an unsecured creditor to the extent the outstanding principal balance of that mortgage loan exceeds the value so assigned to the related mortgaged property or cooperative dwelling by the bankruptcy court.  In addition, certain other modifications of the terms of a mortgage loan can result from a bankruptcy proceeding.  If stated in the related prospectus supplement, losses resulting from a bankruptcy proceeding affecting the mortgage loans in a pool will be covered under a borrower bankruptcy bond, or any other instrument that will not result in a downgrading of the rating of the securities of a series by the related rating agencies.  Any borrower bankruptcy bond will provide for coverage in an amount acceptable to the related rating agency, which will be set forth in the related prospectus supplement.  Subject to the terms of the bankruptcy bond, the issuer thereof may have the right to purchase any mortgage loan with respect to which a payment or drawing has been made or may be made for an amount equal to the outstanding principal balance of that mortgage loan plus accrued and unpaid interest thereon.  The coverage of the bankruptcy bond with respect to a series of securities may be reduced as long as any reduction will not result in a reduction of the outstanding rating of the securities of that series by the related rating agency.

 Overcollateralization

Overcollateralization exists when the principal balance of the loans supporting a class or classes of securities exceeds the principal balance of the class or classes of securities themselves.  If provided for in the prospectus supplement, a portion of the interest payment received on the loans during a due period may be paid to the securityholders on the related payment date as an additional distribution of principal on a certain class or classes of securities.  This payment of interest as principal would accelerate the rate of payment of principal on the class or classes of securities relative to the principal balance of the loans in the related issuing entity and thereby create or increase overcollateralization.

Letter of Credit or Demand Note

If so specified in the prospectus supplement, a letter of credit or demand note may be obtained as credit enhancement for the offered securities.  Letters of credit differ from demand notes primarily in form only.  A letter of credit is generally in the form of a letter from a financial institution addressed to the issuing entity setting forth the terms on which draws may be made thereunder.  A demand note generally is in the form of a promissory note issued by a financial institution in favor of the issuing entity which contains the terms under which draws may be made thereunder.

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The letter of credit or demand note, if any, with respect to a series of securities will be issued by the bank or financial institution specified in the prospectus supplement.  Under the letter of credit or demand note, the issuing bank will be obligated to honor drawings thereunder in an aggregate fixed dollar amount, net of unreimbursed payments thereunder, equal to the percentage specified in the prospectus supplement of the aggregate principal balance of the loans on the related cut-off date or of one or more classes of securities.  If specified in the prospectus supplement, the letter of credit or demand note may permit drawings in the event of losses not covered by insurance policies or other credit support, such as losses arising from damage not covered by standard hazard insurance policies, losses resulting from the bankruptcy of a borrower and the application of certain provisions of the federal Bankruptcy Code, or losses resulting from denial of insurance coverage due to misrepresentations in connection with the origination of a loan.  The amount available under the letter of credit or demand note will, in all cases, be reduced to the extent of the unreimbursed payments thereunder.  The obligations of the issuing bank under the letter of credit or demand note for each series of securities will expire at the earlier of the date specified in the prospectus supplement or the termination of the issuing entity.

Prospective purchasers of securities of a series with respect to which credit enhancement is provided by a letter of credit or demand note must look to the credit of the issuing bank or financial institution, to the extent of its obligations under the letter of credit or demand note, in the event of default by obligors on the assets in the issuing entity.  If the amount available under the letter of credit or demand note is exhausted, or the issuing bank or financial institution becomes insolvent, and amounts in the reserve fund, if any, with respect to that series are insufficient to pay the entire amount of the loss and still be maintained at the level specified in the related prospectus supplement, the securityholders, in the priority specified in the related prospectus supplement, will thereafter bear all risks of loss resulting from default by obligors, including losses not covered by insurance or other credit enhancement, and must look primarily to the value of the properties securing defaulted mortgage loans for recovery of the outstanding principal and unpaid interest.

DERIVATIVES

If specified in the related prospectus supplement, the issuing entity may include one or more derivative instruments for credit enhancement purposes, as described in this section.  Derivative instruments included in any issuing entity will be used only in a manner that reduces or alters risk resulting from the mortgage loans or other assets in the pool, and only in a manner such that the return on the offered securities will be based primarily on the performance of the mortgage loans or other assets in the pool.  Derivative instruments may include (1) interest rate swaps (or caps, floors or collars) or yield supplement agreements, (2) currency swaps or currency options, and (3) market value swaps that are referenced to the value of one or more of the mortgage loans or other assets included in the issuing entity or to a class of offered securities, as described below.

An interest rate swap is an agreement between two parties to exchange one stream of interest payments on an agreed hypothetical or “notional” principal amount for another.  No principal amount is exchanged between the counterparties to an interest rate swap.  In the typical swap, one party agrees to pay a fixed rate on a notional principal amount, while the counterparty pays a floating rate based on one or more reference interest rates, including LIBOR, a specified bank’s prime rate or U.S. Treasury Bill rates.  Interest rate swaps also permit counterparties to exchange a floating rate obligation based on one reference interest rate (such as LIBOR) for a floating rate obligation based on another referenced interest rate (such as U.S. Treasury Bill rates).  An interest rate cap, collar or floor is an agreement pursuant to which the counterparty agrees to make payments representing interest on a notional principal amount when a specified reference interest rate is above a strike rate, outside of a range of strike rates, or below a strike rate, as specified in the agreement, generally in exchange for a fixed amount paid to the counterparty at the time the agreement is entered into.  A yield supplement agreement is a type of cap agreement, and is substantially similar to a cap agreement as described above.  The counterparty under a floor agreement may be an affiliate of the depositor.

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The trustee on behalf of an issuing entity may enter into interest rate swaps, caps, floors and collars, or yield supplement agreements, to minimize the risk to securityholders from adverse changes in interest rates, or to provide supplemental credit support.  Cap agreements and yield supplement agreements may be entered into in order to supplement the sources available to make interest payments on one or more classes of securities of any series.

In the event of the withdrawal of the credit rating of a derivative counterparty or the downgrade of such credit rating below levels specified in the derivative contract (where the derivative contract is relevant to the ratings of the offered securities, such levels generally are set by the rating agencies rating the offered securities), the derivative counterparty may be required to post collateral for the performance of its obligations under the derivative contract, or take certain other measures intended to assure performance of those obligations.

Derivative contracts will generally be documented based upon the standard forms provided by ISDA.  These forms generally consist of an ISDA master agreement, a schedule to the master agreement and a confirmation, although in some cases the schedule and the confirmation will be combined in a single document and the standard ISDA master agreement will be incorporated therein by reference.  The terms of any derivatives and information regarding the counterparties will be set forth in the prospectus supplement.

There can be no assurance that the issuing entity will be able to enter into derivatives at any specific time or at prices or on other terms that are advantageous.  In addition, although the terms of the derivatives may provide for termination under various circumstances, there can be no assurance that the issuing entity will be able to terminate a derivative when it would be economically advantageous to the issuing entity to do so. 

YIELD AND PREPAYMENT CONSIDERATIONS

Yield

The yield to maturity of a security will depend on the price paid by the holder of the security, the interest rate if the security is entitled to payments of interest, the rate and timing of principal, payments on the related mortgage loans, including prepayments, liquidations and repurchases, and the allocation of principal payments to reduce the principal balance or notional balance of the security, among other factors.

In general, if a security is purchased at a premium over its face amount and payments of principal on the related loan occur at a rate faster than anticipated at the time of purchase, the purchaser’s actual yield to maturity will be lower than that assumed at the time of purchase.  This is particularly true for interest-only securities.  In addition, if a class of securities is purchased at a discount from its face amount and payments of principal on the related loan occur at a rate slower than anticipated at the time of purchase, the purchaser’s actual yield to maturity will be lower than assumed.  This is particularly true for principal-only securities.  The effect of principal prepayments, liquidations and purchases of mortgage loans on yield will be particularly significant in the case of a class of securities entitled to payments of interest only or disproportionate payments of interest.  In addition, the total return to investors of securities evidencing a right to distributions of interest at a rate that is based on the weighted average net loan rate of the loans from time to time will be adversely affected by principal prepayments on loans with loan rates higher than the weighted average loan rate on the loans.  In general, loans with higher loan rates prepay at a faster rate than loans with lower loan rates.  In some circumstances rapid prepayments may result in the failure of the holders to recoup their original investment.  In addition, the yield to maturity on other types of classes of securities, including accrual securities, securities with a interest rate that fluctuates inversely with or at a multiple of an index or other classes in a series including more than one class of securities, may be relatively more sensitive to the rate of prepayment on the related loans than other classes of securities.

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A class of securities may be entitled to payments of interest at a fixed, variable or adjustable interest rate, or any combination of interest rates, each as specified in the accompanying prospectus supplement, or may not be entitled to payments of interest at all.  A variable interest rate may be calculated based on the weighted average of the net loan rates, net of servicing fees and any excess spread, of the related loans for the month preceding the distribution date.  An adjustable interest rate may be calculated by reference to an index or otherwise.

The total payments of interest on a class of securities, and the yield to maturity on that security, will be affected by the rate of payment of principal on the securities, or the rate of reduction in the notional balance of securities entitled to payments of interest only, and, in the case of securities evidencing interests in adjustable-rate mortgage loans, by changes in the net loan rates on the adjustable-rate mortgage loans.  The yields on the securities will also be affected by liquidations of loans following borrower defaults and by purchases of mortgage loans in the event of breaches of representations made for the loans by the seller and others, or conversions of adjustable-rate mortgage loans to a fixed interest rate.

In general, defaults on mortgage loans are expected to occur with greater frequency in their early years.  The rate of default on cash out refinance, limited documentation or no documentation mortgage loans, and on loans with high loan-to-value ratios or combined loan-to-value ratios, as applicable, may be higher than for other types of loans.  Likewise, the rate of default on loans that have been originated under lower than traditional underwriting standards may be higher than those originated under traditional standards.  An issuing entity may include mortgage loans that are one month or more delinquent at the time of offering of the related series of securities or which have recently been several months delinquent.  The rate of default on delinquent mortgage loans or mortgage loans with a recent history of delinquency, including re-performing loans, is likely to be higher than the rate of default on loans that have a current payment status.

The rate of defaults and the severity of losses on mortgage loans with document deficiencies may be higher than for mortgage loans with no documentation deficiencies.  To the extent that any document relating to a loan is not in the possession of the trustee, the deficiency may make it difficult or impossible to realize on the mortgaged property in the event of foreclosure, which will affect the timing and the amount of liquidation proceeds received by the trustee.

The risk of loss may also be greater on mortgage loans with loan-to-value ratios or combined loan-to-value ratios greater than 80% and no primary insurance policies.  The yield on any class of securities and the timing of principal payments on that class may also be affected by modifications or actions that may be taken or approved by the master servicer, the servicer or any of their affiliates as described in this prospectus under “THE AGREEMENTS,” in connection with a mortgage loan that is in default, or if a default is reasonably foreseeable.

In addition, the rate and timing of prepayments, defaults and liquidations on the mortgage loans will be affected by the general economic condition of the region of the country or the locality in which the related mortgaged properties are located.  The risk of delinquencies and loss is greater and prepayments are less likely in regions where a weak or deteriorating economy exists, as may be evidenced by, among other factors, increasing unemployment or falling property values.

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For some loans, including adjustable-rate mortgage loans, the loan rate at origination may be below the rate that would result if the index and margin relating to those loans were applied at origination.  Under the applicable underwriting standards, the borrower under each of the loans may be qualified on the basis of the loan rate in effect at origination which reflects a rate significantly lower than the maximum rate.  The repayment of any loan may thus be dependent on the ability of the borrower to make larger monthly payments following the adjustment of the loan rate.  In addition, the periodic increase in the amount paid by the borrower of a buydown loan during or at the end of the applicable buydown period may create a greater financial burden for the borrower, who might not have otherwise qualified for a mortgage under the applicable underwriting guidelines, and may accordingly increase the risk of default for the related loan.

For any loan secured by a junior lien on the related mortgaged property, the inability of the borrower to pay off the balance thereof may be affected by the ability of the borrower to obtain refinancing of any related senior loan, thereby preventing a potential improvement in the borrower’s circumstances.

The holder of a loan secured by a junior lien on the related mortgaged property will be subject to a loss of its mortgage if the holder of a senior mortgage is successful in foreclosure of its mortgage and its claim, including any related foreclosure costs, is not paid in full, since no junior liens or encumbrances survive such a foreclosure.  Also, due to the priority of the senior mortgage, the holder of a loan secured by a junior lien on the related mortgaged property may not be able to control the timing, method or procedure of any foreclosure action relating to the mortgaged property.  Investors should be aware that any liquidation, insurance or condemnation proceeds received relating to any loans secured by junior liens on the related mortgaged property will be available to satisfy the outstanding balance of such loans only to the extent that the claims of the holders of the senior mortgages have been satisfied in full, including any related foreclosure costs.  For loans secured by junior liens that have low balances relative to the amount secured by more senior mortgages, foreclosure costs may be substantial relative to the outstanding balance of the loan, and the amount of any liquidation proceeds available to securityholders may be smaller as a percentage of the outstanding balance of the loan than would be the case for a first lien residential loan.  In addition, the holder of a loan secured by a junior lien on the related mortgaged property may only foreclose on the property securing the related loan subject to any senior mortgages, in which case the holder must either pay the entire amount due on the senior mortgages to the senior mortgagees at or prior to the foreclosure sale or undertake the obligation to make payments on the senior mortgages.

Similarly, a borrower of a balloon loan will be required to pay the balloon amount at maturity.  Those loans pose a greater risk of default than fully amortizing loans, because the borrower’s ability to make such a substantial payment at maturity will in most cases depend on the borrower’s ability to obtain refinancing or to sell the mortgaged property prior to the maturity of the loan.  The ability to obtain refinancing will depend on a number of factors prevailing at the time refinancing or sale is required, including, without limitation, the borrower’s personal economic circumstances, the borrower’s equity in the related mortgaged property, real estate values, prevailing market interest rates, tax laws and national and regional economic conditions.  None of the depositor, any seller or any of their affiliates will be obligated to refinance or repurchase any loan or to sell any mortgaged property, unless that obligation is specified in the accompanying prospectus supplement.

The loans rates on adjustable-rate mortgage loans that are subject to negative amortization typically adjust monthly and their amortization schedules adjust less frequently.  Because initial loan rates are typically lower than the sum of the indices applicable at origination and the related margins, during a period of rising interest rates as well as immediately after origination, the amount of interest accruing on the principal balance of those loans may exceed the amount of the scheduled monthly payment.  As a result, a portion of the accrued interest on negatively amortizing loans may become deferred interest that will be added to their principal balance and will bear interest at the applicable loan rate.

If stated in the accompanying prospectus supplement, an issuing entity may contain GPM loans or buydown loans that have monthly payments that increase during the first few years following origination.  Borrowers may be qualified for those loans on the basis of the initial monthly payment.  To the extent that the related borrower’s income does not increase at the same rate as the monthly payment, such a loan may be more likely to default than a mortgage loan with level monthly payments.

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If credit enhancement for a series of securities is provided by a letter of credit, demand note, insurance policy or bond that is issued or guaranteed by an entity that suffers financial difficulty, that credit enhancement may not provide the level of support that was anticipated at the time an investor purchased its security.  In the event of a default under the terms of a letter of credit, demand note, insurance policy or bond, any realized losses on the loans not covered by the credit enhancement will be applied to a series of securities in the manner described in the accompanying prospectus supplement and may reduce an investor’s anticipated yield to maturity.

The accompanying prospectus supplement may describe other factors concerning the mortgage loans underlying a series of securities or the structure of that series that will affect the yield on the securities.

No assurance can be given that the value of the mortgaged property securing a loan has remained or will remain at the level existing on the date of origination.  If the residential real estate market should experience an overall decline in property values such that the outstanding balances of the loans and any secondary financing on the mortgaged properties in a particular pool become equal to or greater than the value of the mortgaged properties, the actual rates of delinquencies, foreclosures and losses could be higher than those now generally experienced in the mortgage lending industry.

Generally, when a full prepayment is made on a mortgage loan, the borrower under the mortgage loan is charged interest for the number of days actually elapsed from the due date of the preceding monthly payment up to the date of such prepayment, at a daily interest rate determined by dividing the mortgage rate by 365.  Full prepayments will reduce the amount of interest paid by the related borrower or borrower because interest on the principal balance of any mortgage loan so prepaid will be paid only to the date of prepayment instead of for a full month; however, unless otherwise provided in the applicable prospectus supplement, the related servicer will be required to pay from its own funds the portion of any interest at the related mortgage rate, in each case less the servicing fee rate, that is not so received, up to a maximum amount equal to the servicer’s servicing fee.  Partial prepayments generally are applied on the first day of the month following receipt, with no resulting reduction in interest payable for the period in which the partial prepayment is made.  To the extent not covered by the servicer, prepayments will reduce the yield to maturity of the securities.  See “— Maturity and Prepayment” below.

Maturity and Prepayment

The original terms to maturity of the loans in a given issuing entity will vary depending on the types of loans included in that issuing entity.  The prospectus supplement for a series of securities will contain information regarding the types and maturities of the loans in the related issuing entity.  The prepayment experience, the timing and rate of repurchases and the timing and amount of liquidations for the related loans will affect the weighted average life of and yield on the related series of securities.

Prepayments on loans are commonly measured relative to a prepayment standard or model.  The prospectus supplement for each series of securities may describe one or more prepayment standards or models and may contain tables setting forth the projected yields to maturity on each class of securities or the weighted average life of each class of securities and the percentage of the original principal balance of each class of securities of that series that would be outstanding on the specified distribution dates for the series based on the assumptions stated in the accompanying prospectus supplement, including assumptions that prepayments on the loans are made at rates corresponding to various percentages of the prepayment standard or model.  There is no assurance that prepayment of the loans underlying a series of securities will conform to any level of the prepayment standard or model specified in the accompanying prospectus supplement.

The following is a list of some of the factors that may affect prepayment experience:

· homeowner mobility;

· economic conditions;

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· changes in borrowers’ housing needs;

· job transfers;

· unemployment;

· borrowers’ equity in the properties securing the mortgages;

· servicing decisions;

· enforceability of due-on-sale clauses;

· mortgage market interest rates;

· mortgage recording taxes;

· solicitations and the availability of mortgage funds; and

· the obtaining of secondary financing by the borrower.

All statistics known to the depositor that have been compiled for prepayment experience on loans indicate that while some loans may remain outstanding until their stated maturities, a substantial number will be paid significantly earlier than their respective stated maturities.  The rate of prepayment for conventional fixed-rate loans has fluctuated significantly in recent years.  In general, however, if prevailing interest rates fall significantly below the loan rates on the loans underlying a series of securities, the prepayment rate of those loans is likely to be significantly higher than if prevailing rates remain at or above the rates borne by those loans.  Conversely, when prevailing interest rates increase, borrowers are less likely to prepay their loans.

Some mortgage loans may only be prepaid by the borrowers during specified periods upon the payment of a prepayment fee or penalty.  The requirement to pay a prepayment fee or penalty may, to the extent that the prepayment penalty is enforceable under applicable law, discourage some borrowers from prepaying their mortgage loans.  The servicer will be entitled to all prepayment charges and late payment charges received on the loans and those amounts will not be available for payment on the securities, except to the extent specified in the related prospectus supplement.  However, some states’ laws restrict the imposition of prepayment charges even when the mortgage loans expressly provide for the collection of those charges.  As a result, it is possible that prepayment charges may not be collected even on mortgage loans that provide for the payment of these charges.

The inclusion in an issuing entity of mortgage loans with a negative amortization feature may affect the yields on the securities of the related series, because the amount of the borrower’s monthly payment may be limited (subject in some cases to periodic adjustment) which may have the effect of reducing the amount of interest collections for any particular distribution date. The negative amortization feature could result in periodic increases in the principal balances of the related mortgage loans. Those mortgage loans may experience a higher rate of delinquency and default and a greater severity of loss than mortgage loans without this feature.

The addition of any deferred interest to the principal balance of any related class of securities may lengthen the weighted average life of that class of securities and may adversely affect yield to holders of those securities.

Mortgage loans with fixed interest rates generally contain due-on-sale clauses permitting the mortgagee or obligee to accelerate the maturity thereof upon conveyance of the mortgaged property.  In most cases, the servicer may permit proposed assumptions of mortgage loans where the proposed buyer meets the underwriting standards applicable to that mortgage loan.  This assumption would have the effect of extending the average life of the mortgage loan.

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An adjustable-rate mortgage loan is assumable, in some circumstances, if the proposed transferee of the related mortgaged property establishes its ability to repay the loan and, in the reasonable judgment of the servicer, the security for the adjustable-rate mortgage loan would not be impaired by the assumption.  The extent to which adjustable-rate mortgage loans are assumed by purchasers of the mortgaged properties rather than prepaid by the related borrowers in connection with the sales of the mortgaged properties will affect the weighted average life of the related series of securities.

The terms of the agreements for a specific series generally will require the related servicer or special servicer, if applicable, to enforce any due-on-sale clause to the extent it has knowledge of the conveyance or the proposed conveyance of the underlying mortgaged property or cooperative dwelling; provided, however, that any enforcement action that would impair or threaten to impair any recovery under any related insurance policy will not be required or permitted.  See “THE AGREEMENTS—Servicing Provisions—Due-on-Sale Clauses; Assumptions” and “CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS” in this prospectus for a description of certain provisions of the agreements and certain legal developments that may affect the prepayment experience on the related mortgage loans.

At the request of the related borrowers, the servicer may refinance the mortgage loans in any pool by accepting prepayments on those mortgage loans and making new loans secured by a mortgage on the same property.  Upon any refinancing, the new loans will not be included in the related pool and a prepayment of the affected mortgage loan will occur.  A borrower may be legally entitled to require the servicer to allow a refinancing.  Any such repurchase of a refinanced mortgage loan will have the same effect as a prepayment in full of the related mortgage loan.

For any index used in determining the rate of interest applicable to any series of securities or loan rates of the underlying mortgage loans, there are a number of factors that affect the performance of that index and may cause that index to move in a manner different from other indices.  If an index applicable to a series responds to changes in the general level of interest rates less quickly than other indices, in a period of rising interest rates, increases in the yield to securityholders due to those rising interest rates may occur later than that which would be produced by other indices, and in a period of declining rates, that index may remain higher than other market interest rates which may result in a higher level of prepayments of the loans, which adjust in accordance with that index, than of mortgage loans which adjust in accordance with other indices.

If stated in the prospectus supplement relating to a specific series, the depositor or other specified entity will have the option to repurchase the assets included in the related issuing entity under the conditions stated in the related prospectus supplement.  For any series of securities for which the depositor has elected to treat the issuing entity as a REMIC (as defined herein), any optional repurchase of assets will be effected in compliance with the requirements of Section 860F(a)(4) of the Code (as defined herein) so as to constitute a “qualifying liquidation” thereunder.  In addition, the depositor will be obligated, under certain circumstances, to repurchase certain assets of the related issuing entity.  The sellers will also have certain repurchase obligations or options, as more fully described in this prospectus.

THE AGREEMENTS

Set forth below is a description of the material provisions of the Agreements which are not described elsewhere in this prospectus. The description is subject to, and qualified in its entirety by reference to, the provisions of each Agreement. Where particular provisions or terms used in the Agreements are referred to, such provisions or terms are as specified in the Agreements. As specified in the related prospectus supplement, certain of the rights of securityholders described below may be exercised by the credit enhancer for the related series of securities without the consent of the securityholders and certain rights of securityholders may not be exercised without the written consent of the credit enhancer.

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Assignment of the Issuing Entity Assets

Assignment of the Loans.  At the time of issuance of the securities, the applicable seller or sellers will convey the mortgage loans to the depositor and the depositor will cause the loans to be assigned or pledged to the trustee for the benefit of the securityholders, without recourse, together with all principal and interest received by or on behalf of the depositor on or with respect to such loans after the cut-off date, other than principal and interest due on or before the cut-off date and other than any amounts specified in the prospectus supplement.  Concurrently with this sale, the trustee will deliver the securities to the depositor in exchange for the loans.  Each loan will be identified in a schedule appearing as an exhibit to the related Agreement.  Such schedule will include information as to the outstanding principal balance of each loan after application of payments due on or before the cut-off date, as well as information regarding the loan rate or annual percentage rate, the maturity of the loan, the loan-to-value ratios, combined loan-to-value ratios or effective loan-to-value ratios, as applicable, at origination and certain other information.

Unless otherwise specified in the prospectus supplement, the related Agreement will require that, within the time period specified therein, the depositor will also deliver or cause to be delivered to the trustee or, if so indicated in the prospectus supplement, a separate custodian appointed by the trustee pursuant to a custodial agreement, as to each mortgage loan, among other things:

· the mortgage note endorsed without recourse in blank or to the order of the trustee;

· the mortgage, deed of trust or similar instrument with evidence of recording indicated thereon, except that in the case of any mortgage not returned form the public recording office, the depositor will deliver or cause to be delivered a copy of such mortgage together with a certificate that the original of the mortgage was delivered to such recording office;

· an assignment of the mortgage to the trustee, which assignment will be in recordable form in the case of a mortgage assignment; and

· all other security documents, including those relating to any senior interests in the property, that are specified in the prospectus supplement or the related Agreement.

Unless otherwise specified in the applicable prospectus supplement, the depositor will cause to be delivered to the trustee, its agent or custodian, with respect to any cooperative loan, the related original security agreement, the proprietary lease or occupancy agreement, the recognition agreement, an executed financing statement and the relevant stock certificate and related blank stock powers.  A financing statement will be filed in the appropriate office evidencing the trustee’s security interest in each cooperative loan.

If specified in the prospectus supplement, the depositor will promptly cause the assignments of the loans to be recorded in the appropriate public office for real property records.  If specified in the prospectus supplement, some or all of the loan documents may not be delivered to the trustee until after the occurrence of certain events specified in the prospectus supplement.

In lieu of delivering the mortgage or deed of trust and an assignment of the mortgage to the trustee, for any loans registered on the MERS® System the depositor will cause the trustee to be recorded as the beneficial owner of the loans pursuant to the MERS rules for electronically tracking changes in ownership rights.

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The trustee or the appointed custodian will review the loan documents within the time period specified in the prospectus supplement after receipt thereof to ascertain that all required documents have been properly executed and received, and the trustee will hold the loan documents in trust for the benefit of the related securityholders. Unless otherwise specified in the prospectus supplement, if any loan document is found to be missing or defective in any material respect, the trustee or the custodian, as appropriate, will notify the servicer and the depositor, and the servicer will notify the related seller. If the related seller or other specified party cannot cure the omission or defect within the time period specified in the prospectus supplement after receipt of notice from the servicer and, if specified in the prospectus supplement, such defect also constitutes a breach of a representation and warranty, the seller or other party will be obligated to either purchase the related loan from the issuing entity at the purchase price or, if so specified in the prospectus supplement, remove such loan from the issuing entity and substitute in its place one or more other loans that meets certain requirements as set forth in the prospectus supplement. There can be no assurance that a seller will fulfill this purchase or substitution obligation. Unless otherwise specified in the prospectus supplement, this obligation to cure, purchase or substitute constitutes the sole remedy available to the securityholders or the trustee for omission of, or a material defect in, a loan document.

Notwithstanding the foregoing provisions, with respect to an issuing entity for which a REMIC election is to be made, no purchase or substitution of a loan will be made if the purchase or substitution would result in a prohibited transaction tax under the Code.

No Recourse to Sellers, Depositor or Servicer. As described above under “—Assignment of the Loans,” the depositor will cause the loans comprising the issuing entity to be assigned or pledged to the trustee, without recourse. However, each seller or other party named in the related prospectus supplement will be obligated to repurchase or substitute for any loan as to which certain representations and warranties are breached or for failure to deliver certain documents relating to the loans as described in this prospectus under “Assignment of the Loans” and “LOAN PROGRAM—Representations by Sellers; Repurchases.” These obligations to purchase or substitute constitute the sole remedy available to the securityholders or the trustee for a breach of any such representation or warranty or failure to deliver a constituent document.

Servicing Provisions

The Master Servicer. A master servicer may be named in the related prospectus supplement to act under any Agreement. The entity acting as master servicer under any Agreement may be an affiliate of the depositor, the trustee, the servicer and any of their respective affiliates. If the related prospectus supplement does not name a master servicer, references in this prospectus to master servicer may relate to obligations that will be required to be performed by the servicer or the trustee.

Payments on Loans; Deposits to Collection Account. The servicer will establish and maintain or cause to be established and maintained with respect to the each issuing entity a separate account or accounts for the collection of payments on the assets in the issuing entity (the “collection account”).  The prospectus supplement may provide for other requirements for the collection account, but if it does not, then the collection account must be either:

· maintained with a depository institution the short-term debt obligations of which (or, in the case of a depository institution that is the principal subsidiary of a holding company, the short-term debt obligations of such holding company) are rated in one of the two highest short-term rating categories by the rating agency that rated one or more classes of the related series of securities;

· an account or accounts the deposits in which are fully insured by the FDIC;

· an account or accounts the deposits in which are insured by the FDIC to the limits established by the FDIC and the uninsured deposits in which are otherwise secured such that, as evidenced by an opinion of counsel, securityholders have a claim with respect to the funds in such account or accounts, or a perfected first-priority security interest against any collateral securing those funds, that is superior to the claims of any other depositors or general creditors of the depository institution with which such account or accounts are maintained; or

· an account or accounts otherwise acceptable to the rating agency.

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The collateral eligible to secure amounts in the collection account is limited to eligible investments.  See “—Investment of Funds” below.  A collection account may be maintained as an interest bearing account or the funds held therein may be invested pending each succeeding payment date in eligible investments.  The servicer, the trustee or any other entity described in the prospectus supplement may be entitled to receive interest or other income earned on funds in the collection account as additional compensation and will be obligated to deposit in the collection account the amount of any loss when realized.  The collection account may be maintained with the servicer or with a depository institution that is an affiliate of the servicer, provided it meets the standards set forth above.

The servicer or trustee will deposit or cause to be deposited in the collection account for each issuing entity, to the extent applicable and unless otherwise specified in the prospectus supplement and provided in the related Agreement, the following payments and collections received or advances made by or on behalf of it subsequent to the cut-off date (other than certain payments due on or before the cut-off date and any excluded amounts):

· all payments on account of principal and interest (which may be net of the applicable servicing compensation), including principal prepayments and, if specified in the prospectus supplement, any applicable prepayment penalties, on the loans;

· all net insurance proceeds, less any incurred and unreimbursed advances made by the servicer, of the hazard insurance policies and any primary mortgage insurance policies, to the extent such proceeds are not applied to the restoration of the property or released to the mortgagor in accordance with the services normal servicing procedures;

· all proceeds received in connection with the liquidation of defaulted loans, less any expenses of liquidation and any unreimbursed advances made by the servicer with respect to the liquidated loans;

· any net proceeds received on a monthly basis with respect to any properties acquired on behalf of the securityholders by foreclosure or deed in lieu of foreclosure;

· all advances as described in this prospectus under “DESCRIPTION OF THE SECURITIES—Advances”;

· all proceeds of any loan or property in respect thereof repurchased by any seller as described under “LOAN PROGRAM—Representations by Sellers; Repurchases” or “—Assignment of Issuing Entity Assets” above and all proceeds of any loan repurchased in connection with termination of the issuing entity;

· all payments required to be deposited in the collection account with respect to any deductible clause in any blanket insurance policy described under “—Hazard Insurance” below;

· any amount required to be deposited by the servicer in connection with losses realized on investments for the benefit of the servicer of funds held in the collection account and, to the extent specified in the prospectus supplement, any payments required to be made by the servicer in connection with prepayment interest shortfalls; and

· all other amounts required to be deposited in the collection account pursuant to the related Agreement.

The servicer or the depositor, as applicable, may from time to time direct the institution that maintains the collection account to withdraw funds from the collection account for the following purposes:

· to transfer funds to an account created by the trustee for distribution of payments due on the securities and other purposes set forth in the prospectus supplement (the “distribution account”);

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· to pay to the servicer the servicing fees described in the prospectus supplement and, as additional servicing compensation, earnings on or investment income with respect to funds in the collection account credited thereto;

· to reimburse the servicer for advances made with respect to a loan, but only from amounts received that represent late payments of principal on, late payments of interest on, insurance proceeds received with respect to or liquidation proceeds received with respect to the same loan;

· to reimburse the servicer for any advances previously made which the servicer has determined to be nonrecoverable;

· to reimburse the servicer from insurance proceeds for expenses incurred by the servicer and covered by insurance policies;

· to reimburse the servicer for unpaid servicing fees and unreimbursed out-of-pocket costs and expenses incurred by the servicer in the performance of its servicing obligations, such right of reimbursement being limited to amounts received representing late recoveries of the payments for which the original advances were made;

· to pay to the servicer, with respect to each loan or property acquired in respect thereof that has been purchased by the servicer pursuant to the Agreement, all amounts received thereon and not taken into account in determining the principal balance of that repurchased loan;

· to reimburse the servicer or the depositor for expenses incurred and reimbursable pursuant to the Agreement;

· to pay or reimburse the trustee or any other party as provided in the prospectus supplement;

· to withdraw any amount deposited in the collection account that was not required to be deposited therein; and

· to clear and terminate the collection account upon termination of the Agreement.

In addition, unless otherwise specified in the prospectus supplement, on or prior to the business day immediately preceding each payment date, the servicer shall withdraw from the collection account the amount of available funds, to the extent on deposit, for deposit in the distribution account maintained by the trustee.

The applicable Agreement may require the servicer to establish and maintain one or more escrow accounts into which mortgagors deposit amounts sufficient to pay taxes, assessments, hazard insurance premiums or comparable items.  Withdrawals from the escrow accounts maintained for mortgagors may be made to effect timely payment of taxes, assessments and hazard insurance premiums or comparable items, to reimburse the servicer out of related assessments for maintaining hazard insurance, to refund to mortgagors amounts determined to be overages, to remit to mortgagors, if required, interest earned, if any, on balances in any of the escrow accounts, to repair or otherwise protect the property and to clear and terminate any of the escrow accounts.  The servicer will be solely responsible for administration of the escrow accounts and will be expected to make advances to such accounts when a deficiency exists therein.

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Investment of Funds. Funds on deposit in the collection account and the distribution account, and any other accounts for a series that may be invested by the trustee or by the master servicer (or by the servicer, if any), may be invested only in “eligible investments” acceptable to each rating agency, which may include, without limitation:

· direct obligations of, and obligations fully guaranteed as to timely payment of principal and interest by, the United States of America, Freddie Mac, Fannie Mae or any agency or instrumentality of the United States of America, the obligations of which are backed by the full faith and credit of the United States of America;

· demand and time deposits, certificates of deposit or banker’s acceptances;

· repurchase obligations pursuant to a written agreement with respect to any security described in the first clause above;

· securities bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States of America or any state;

· commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the date of issuance thereof);

· a guaranteed investment contract issued by an entity having a credit rating acceptable to each rating agency; and

· any other demand, money market or time deposit or obligation, security or investment as would not adversely affect the then current rating by the rating agencies.

Eligible investments with respect to a series will include only obligations or securities that mature on or before the date on which the amounts in the collection account are required to be remitted to the trustee or the securities administrator, as applicable, and amounts in the distribution account for the related series are required or may be anticipated to be required to be applied for the benefit of securityholders of the series.

If so provided in the prospectus supplement, the reinvestment income from a collection account, the distribution account or other account may be property of the master servicer, a servicer, the trustee or another party and not available for distributions to securityholders.

Subservicing by Sellers. The servicer may enter into subservicing agreements with any servicing entity which will act as the subservicer for the loans, which subservicing agreements will not contain any terms inconsistent with the related Agreement.  While each subservicing agreement will be a contract solely between the servicer and the subservicer, the Agreement pursuant to which a series of securities is issued may provide that, if for any reason the servicer for that series of securities is no longer the servicer of the loans, the trustee or any successor servicer must recognize the subservicer’s rights and obligations under the related subservicing agreement.  Notwithstanding any subservicing arrangement, unless otherwise provided in the prospectus supplement, the servicer will remain liable for its servicing duties and obligations under the servicing agreement as if the servicer alone were servicing the loans.

Collection Procedures. The servicer, directly or through one or more subservicers, will make reasonable efforts to collect all payments called for under the loans and will, consistent with each Agreement and any pool insurance policy, primary mortgage insurance policy, bankruptcy bond or alternative arrangements, follow those collection procedures that are customary with respect to loans that are comparable to the loans.  Consistent with the above, unless otherwise specified in the prospectus supplement, the servicer generally may, in its discretion:

· waive any prepayment charge, assumption fee, late payment or other charge in connection with a loan; and

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· to the extent not inconsistent with the rules applicable to REMICs, and with the coverage of an individual loan by a pool insurance policy, primary mortgage insurance policy, bankruptcy bond or alternative arrangements, if applicable, waive, modify or vary any term of any mortgage loan or consent to the postponement of strict compliance with any such term or in any manner grant indulgence to the related mortgagor if in the servicer’s reasonable and prudent determination such waiver, modification, postponement or indulgence is in the interests of the trustee on behalf of securityholders; provided, however, that if specified in the prospectus supplement, the servicer may not permit any modification with respect to any mortgage loan that would vary the mortgage interest rate, defer or forgive the payment of interest or of any principal, reduce the outstanding principal amount (other than as a result of its actual receipt of payment of principal on), extend the final maturity date of such mortgage loan, or accept substitute or additional collateral or release any collateral for a mortgage loan, unless it has obtained the consent of the depositor.

Unless otherwise specified in the prospectus supplement, the servicer’s obligation, if any, to make or cause to be made advances on a loan will remain during any period of this type of arrangement.

Due-on-Sale Clauses; Assumptions. Unless otherwise specified in the applicable prospectus supplement, the servicing agreements will provide that, when any mortgaged property has been conveyed by the borrower, the servicer will, to the extent it has knowledge of the reconveyance, exercise its rights on behalf of the trustee to accelerate the maturity of the mortgage loan under any “due-on-sale” clause applicable thereto, if any, unless (1) it reasonably believes that such enforcement is not exercisable under applicable law or regulations, or that the borrower generally is likely to bring a legal action to challenge such acceleration, or (2) in certain cases, the servicer determines that such enforcement would adversely affect collectability of the mortgage loans or would not be in the best economic interest of the securityholders. In either such case, where the due-on-sale clause will not be exercised, a servicer is authorized to take or enter into an assumption and modification agreement from or with the person to whom such mortgaged property has been or is about to be conveyed, pursuant to which that person becomes liable under the mortgage note and, unless prohibited by applicable state law, the borrower remains liable thereon, provided that the mortgage loan will continue to be covered by any related primary mortgage insurance policy. In the case of an FHA mortgage loan, such an assumption can occur only with HUD approval of the substitute borrower. Each servicer will also be authorized, with the prior approval of the insurer under any required insurance policies, to enter into a substitution of liability agreement with such person, pursuant to which the original borrower is released from liability and such person is substituted as borrower and becomes liable under the mortgage note. See “CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS—Due-on-Sale Clauses.”

Prepayment Interest Shortfalls. When a borrower prepays a mortgage loan in full or in part between due dates, the borrower generally is required to pay interest on the amount prepaid only from the last scheduled due date to the date of prepayment, with a resulting reduction in interest payable for the month during which the prepayment is made. To the extent specified in the applicable prospectus supplement, if, on any distribution date, as a result of principal prepayments in full, but not in part, on the mortgage loans during the applicable prepayment period, the amount of interest due on the affected mortgage loans is less than a full month’s interest, the applicable servicer (or other party under contract with the trustee or the master servicer), will be required to remit the amount of such insufficiency. Unless otherwise provided in the applicable prospectus supplement, this obligation will be limited to the amount of the applicable servicer’s servicing fee for the related period or to some lesser amount. Generally, neither the servicers nor the master servicer will be obligated to remit the amount of any such insufficiency due to a prepayment in part.

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Advances.  Unless otherwise provided in the applicable prospectus supplement, prior to each distribution date, each servicer (or other party under contract with the trustee or the master servicer) will be required to make advances (out of its own funds or funds held in its servicing account for future distribution or withdrawal) with respect to any monthly payments (net of the related servicing fees) that were due on the mortgage loans it services during the immediately preceding due period and delinquent at the close of business on the related determination date (each, a “delinquency advance”); provided, however, that with respect to delinquent balloon payments a servicer’s obligation to make a delinquency advance will be limited to an amount equal to the assumed monthly payment that would have been due on the related due date based on the original principal amortization schedule for the related balloon mortgage loan.  References in this prospectus to delinquency advances do not include amounts advanced by a servicer in respect of a full recourse mortgage loan, as described below.

Delinquency advances will be required to be made only to the extent they are deemed by a servicer to be recoverable from related late collections, insurance proceeds or liquidation proceeds.  The purpose of making delinquency advances is to maintain a regular cash flow to the securityholders, rather than to guarantee or insure against losses.  The servicers will not be required to make any advances with respect to reductions in the amount of the monthly payments on the mortgage loans due to debt service reductions or the application of the Relief Act or similar legislation or regulations.

The servicers generally will also be obligated to make advances in respect of certain taxes, insurance premiums and, if applicable, property protection expenses not paid by borrowers on a timely basis and, to the extent deemed recoverable, foreclosure costs, including reasonable attorney’s fees (collectively, “servicing advances”).  Property protection expenses are certain costs and expenses incurred in connection with defaulted mortgage loans, acquiring title or management of REO property or the sale of defaulted mortgage loans or REO properties.

We refer to delinquency advances and servicing advances collectively as “Advances.” If a servicer fails to make an Advance as required under the applicable servicing agreement, unless otherwise specified in the applicable prospectus supplement, the master servicer, if it becomes successor servicer, will be obligated to make any such Advance, subject to the master servicer’s determination of recoverability and otherwise in accordance with the terms of the pooling and servicing agreement.

All Advances will be reimbursable to the servicers and master servicer on a first priority basis from either late collections, insurance proceeds or liquidation proceeds from the mortgage loan as to which the unreimbursed Advance was made.  In addition, any Advances previously made that are deemed by the servicers or the master servicer to be nonrecoverable from related late collections, insurance proceeds or liquidation proceeds may be reimbursed to the servicers out of any funds in the collection account prior to remittance to the trustee or master servicer and reimbursed to the master servicer out of any funds in the distribution or collection account prior to distribution on the securities.

Hazard Insurance. Except as otherwise specified in the prospectus supplement, the servicer will require the mortgagor or obligor on each loan to maintain a hazard insurance policy providing coverage against loss by fire and other hazards which are covered under the standard extended coverage endorsement customary for the type of property in the state in which such property is located.  This hazard insurance coverage will be in an amount that is at least equal to the lesser of:

· the maximum insurable value of the improvements securing the loan from time to time; and

· either the combined principal balance owing on the loan and any mortgage loan senior to such loan or an amount such that the proceeds of the policy shall be sufficient to prevent the mortgagor or obligor and/or the lender from becoming a co-insurer, whichever is greater.

All amounts collected by the servicer under any hazard policy (except for amounts to be applied to the restoration or repair of the property or released to the mortgagor or obligor in accordance with the servicer’s normal servicing procedures) will be deposited in the related collection account.  In the event that the servicer maintains a blanket policy insuring against hazard losses on all the loans comprising part of an issuing entity, it will conclusively be deemed to have satisfied its obligation relating to the maintenance of hazard insurance.  If the blanket policy relating to an issuing entity contains a deductible clause, the servicer will be required to deposit from its own funds into the collection account an amount equal to the amount which would have been deposited therein but for the deductible clause.

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In general, the standard form of fire and extended coverage policy covers physical damage to or destruction of the improvements securing a loan by fire, lightning, explosion, smoke, windstorm and hail, riot, strike and civil commotion, subject to the conditions and exclusions listed in each policy.  Although the policies relating to the loans may have been underwritten by different insurers under different state laws in accordance with different applicable forms and therefore may not contain identical terms and conditions, the basic terms of these types of policies are dictated by respective state laws, and most hazard policies typically do not cover (among other things) any physical damage resulting from the following:

· war;

· revolution;

· governmental actions;

· floods and other water-related causes;

· earth movement, including earthquakes, landslides and mud flows;

· nuclear reactions;

· wet or dry rot;

· vermin, rodents, insects or domestic animals; or

· theft and, in certain cases, vandalism.

The foregoing list is merely indicative of certain kinds of uninsured risks and is not intended to be all-inclusive.

If, however, any mortgaged property at the time of origination of the related loan is located in an area identified by the Flood Emergency Management Agency as having special flood hazards and flood insurance has been made available, the servicer will cause to be maintained with a generally acceptable insurance carrier a flood insurance policy in accordance with mortgage servicing industry practice.  Any flood insurance policy so maintained will provide coverage in an amount at least equal to the lesser of the principal balance of the loan and the minimum amount required under the terms of coverage to compensate for any damage or loss on a replacement cost basis.  The amount of coverage provided will not be greater than the maximum amount of flood insurance available for the related mortgaged property under either the regular or emergency programs of the National Flood Insurance Program.

The hazard insurance policies covering properties securing the loans typically contain a clause which in effect requires the insured at all times to carry insurance of a specified percentage (generally 80% to 90%) of the full replacement value of the insured property in order to recover the full amount of any partial loss.  If the insured’s coverage falls below this specified percentage, then the insurer’s liability in the event of partial loss will not exceed the larger of (a) the replacement costs of the improvements less physical depreciation and (b) such proportion of the loss as the amount of insurance carried bears to the specified percentage of the full replacement cost of the improvements.  Since the amount of hazard insurance the servicer may cause to be maintained on the improvements securing a loan declines as the principal balances owing on the loan itself decrease, and since improved real estate generally has appreciated in value over time (except in recent years), the effect of this requirement in the event of partial loss may be that hazard insurance proceeds will be insufficient to restore fully the damaged property.

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Primary Mortgage Insurance.  The servicer will maintain or cause to be maintained, as the case may be and as permitted by law, in full force and effect, to the extent specified in the prospectus supplement, a primary mortgage insurance policy with regard to each loan for which that coverage is required under the applicable Agreement.  Unless required by law, the servicer will not cancel or refuse to renew any primary mortgage insurance policy in effect at the time of the initial issuance of a series of securities that is required to be kept in force under the applicable Agreement unless the replacement primary mortgage insurance policy for the cancelled or nonrenewed policy is maintained with an insurer whose claims-paying ability is sufficient to maintain the current rating of the classes of securities of that series that have been rated.

Although the terms and conditions of primary mortgage insurance vary, the amount of a claim for benefits under a primary mortgage insurance policy covering a mortgage loan will consist of the insured percentage of the unpaid principal amount of the covered loan and accrued and unpaid interest on the loan and reimbursement of certain expenses, less:

· all rents or other payments collected or received by the insured (other than the proceeds of hazard insurance) that are derived from or in any way related to the property;

· hazard insurance proceeds in excess of the amount required to restore the property and which have not been applied to the payment of the loan;

· amounts expended but not approved by the insurer of the related primary mortgage insurance policy;

· claim payments previously made by the insurer; and

· unpaid premiums.

Primary mortgage insurance policies reimburse certain losses sustained by reason of default in payments by borrowers.  Primary mortgage insurance policies will not insure against, and exclude from coverage, losses sustained by reason of a default arising from or involving certain matters, including:

· fraud or negligence in origination or servicing of the loans, including misrepresentation by the originator, mortgagor (or obligor) or other persons involved in the origination of the loan;

· failure to construct the property subject to the loan in accordance with specified plans;

· physical damage to the property; and

· the related subservicer not being approved as a servicer by the insurer.

Evidence of each primary mortgage insurance policy will be provided to the trustee simultaneously with the transfer to the trustee of the loan.  The servicer, on behalf of itself, the trustee and the securityholders, is required to present claims to the insurer under any primary mortgage insurance policy and to take reasonable steps that are necessary to permit recovery thereunder with respect to defaulted loans.  Amounts collected by the servicer on behalf of the servicer, the trustee and the securityholders shall be deposited in the related collection account for distribution as set forth above.

Claims Under Insurance Policies and Other Realization Upon Defaulted Loans.  The servicer or subservicers, on behalf of the trustee and securityholders, will present claims to the insurer under any applicable insurance policies.  If the property securing a defaulted loan is damaged and proceeds, if any, from the related hazard insurance policy are insufficient to restore the damaged property, the servicer is not required to expend its own funds to restore the damaged property unless it determines (a) that such restoration will increase the proceeds to securityholders on liquidation of the loan after reimbursement of the servicer for its expenses and (b) that the expenditure will be recoverable by it from related insurance proceeds or liquidation proceeds.

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If recovery on a defaulted loan under any insurance policy is not available, or if the defaulted loan is not covered by an insurance policy, the servicer will be obligated to follow or cause to be followed those normal practices and procedures that it deems necessary or advisable to realize upon the defaulted loan.  If the net proceeds after reimbursable expenses of any liquidation of the property securing the defaulted loan are less than the principal balance of the loan plus interest accrued thereon that is payable to securityholders, the issuing entity will realize a loss in the amount of that difference plus the aggregate of expenses incurred by the servicer in connection with the liquidation proceedings and which are reimbursable under the Agreement.

The proceeds from any liquidation of a loan will be applied in the following order of priority:

· first, to reimburse the servicer for any unreimbursed expenses incurred by it to restore the related property and any unreimbursed servicing compensation payable to the servicer with respect to the loan;

· second, to reimburse the servicer for any unreimbursed advances with respect to the loan;

· third, to accrued and unpaid interest (to the extent no advance has been made for that amount) on the loan; and

· fourth, as a recovery of principal of the loan.

The master servicer will be required, and the servicers will generally be required, to obtain and thereafter maintain in effect a bond, a corporate guaranty or similar form of insurance coverage (which may provide blanket coverage), or any combination thereof, insuring against loss occasioned by the errors and omissions of their respective officers and employees.

Servicing and Other Compensation and Payment of Expenses.  The servicer’s primary compensation for its activities as servicer will come from the payment to it, with respect to each interest payment on a loan, of the amount specified in the prospectus supplement.  As principal payments are made on the loans, the portion of each monthly payment which represents interest will decline, and thus servicing compensation to the servicer will decrease as the loans amortize.  Prepayments and liquidations of loans prior to maturity will also cause servicing compensation to the servicer to decrease.  Subservicers, if any, will be entitled to a monthly servicing fee as described in the prospectus supplement in compensation for their servicing duties.  In addition, the servicer or subservicer will retain all prepayment charges, assumption fees and late payment charges, to the extent collected from borrowers, and any benefit that may accrue as a result of the investment of funds in the applicable collection account (unless otherwise specified in the prospectus supplement).

The servicer will pay or cause to be paid certain ongoing expenses associated with each issuing entity and incurred by it in connection with its responsibilities under the related Agreement, including, without limitation, and only if specified in the prospectus supplement, payment of any fee or other amount payable in respect of any credit enhancement arrangements, the trustee, any custodian appointed by the trustee, the certificate registrar and any paying agent, and payment of expenses incurred in enforcing the obligations of subservicers and sellers.  The servicer will be entitled to reimbursement of expenses incurred in enforcing the obligations of subservicers and sellers under certain limited circumstances.

Rule 17g-5 and Rule 15Ga-1 Compliance. The securities administrator or other entity named in the prospectus supplement will act as the Rule 17g-5 of the Exchange Act information provider, responsible for making available the information required to be provided by Rule 17g-5 to rating agencies and other entities described in the Rule. The obligation of the information provider will be limited to information delivered to it by electronic mail as specified in the prospectus supplement.

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The trustee or other entity named in the prospectus supplement will agree to provide to the depositor any information in the trustee’s possession required to be reported under Rule 15Ga-1 of the Exchange Act. This information relates to the receipt of any requests for repurchase of a mortgage loan due to breach of a representation or warranty regarding such loan and the actions taken by the trustee or other entity described in the prospectus supplement in response to such request.

Evidence as to Compliance.  The applicable Agreement will require the trustee, the securities administrator, the master servicer, each custodian, each servicer, each subservicer and any other party that is participating in the servicing function with respect to at least five percent of the mortgage loans or any pool of mortgage loans to provide to the depositor and any other party specified in the applicable agreement, on an annual basis on or before the date specified in the applicable agreement, a report on assessment of compliance with servicing criteria for asset-backed securities together with a copy of an attestation report from a registered public accounting firm regarding such party’s assessment of compliance.  In addition, the applicable agreement will require each of the master servicer, each servicer and each subservicer to provide to the depositor and any other party specified in the applicable agreement, on an annual basis on or before the date specified in the applicable agreement a statement of compliance, signed by an authorized officer, to the effect that (a) a review of the party’s activities during the reporting period and of its performance under the applicable agreement has been made under such officer’s supervision and (b) to the best of such officer’s knowledge, based on such review, such party has fulfilled all of its obligations under the agreement in all material respects throughout the reporting period or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status thereof.

Errors and Omissions Coverage. The master servicer will be required, and the servicers will generally be required, to obtain and thereafter maintain in effect a bond, corporate guaranty or similar form of insurance coverage (which may provide blanket coverage), or any combination thereof, insuring against loss occasioned by the errors and omissions of their respective officers and employees.

Certain Matters Regarding the Servicer, the Master Servicer and the Depositor.  The servicer under each pooling and servicing agreement or servicing agreement, as applicable, will be named in the prospectus supplement.  The entity serving as servicer may have normal business relationships with the depositor or the depositor’s affiliates.

Each Agreement will provide that neither the master servicer nor the servicer may resign from its obligations and duties under the Agreement except upon (a) appointment of a successor entity and receipt by the trustee of a letter from the applicable rating agency or rating agencies that the resignation and the successor entity’s appointment will not result in a downgrade of the securities or (b) a determination that its performance of its duties thereunder is no longer permissible under applicable law.  The master servicer or servicer may, however, be removed from its obligations and duties as set forth in the Agreement.  No resignation by the master servicer or the servicer will become effective until the trustee or a successor servicer has assumed the servicer’s obligations and duties under the Agreement.

Each Agreement generally will further provide that neither the servicer, the master servicer, the depositor, nor any director, officer, employee, or agent of the servicer, the master servicer or the depositor (each, an “indemnified party”) will be under any liability to the related issuing entity or securityholders for taking any action or for refraining from taking any action in good faith pursuant to the Agreement, or for errors in judgment; provided, however, that neither the servicer, the depositor nor any such person will be protected against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in the performance of duties thereunder or by reason of reckless disregard of obligations and duties thereunder.  Each Agreement generally will further provide that each indemnified party will be entitled to indemnification by the related issuing entity and will be held harmless against any loss, liability or expense incurred in connection with any legal action relating to the Agreement or the securities for the related series, other than any loss, liability or expense related to any specific loan or loans (except any loss, liability or expense otherwise reimbursable pursuant to the Agreement) and any loss, liability or expense incurred by reason of willful misfeasance, bad faith or gross negligence in the performance of that indemnified party’s duties thereunder or by reason of reckless disregard by that indemnified party of obligations and duties thereunder.  In addition, each Agreement generally will provide that neither the servicer, the master servicer nor the depositor will be under any obligation to appear in, prosecute or defend any legal action which is not incidental to its respective responsibilities under the Agreement and which in its opinion may involve it in any expense or liability.  The servicer, the master servicer or the depositor may, however, in its discretion undertake any action which it may deem necessary or desirable with respect to the Agreement and the rights and duties of the parties thereto and the interests of the securityholders thereunder.  In that event, the legal expenses and costs of the action and any liability resulting therefrom will be expenses, costs and liabilities of the issuing entity, and the servicer, the master servicer or the depositor, as the case may be, will be entitled to be reimbursed for those costs and liabilities out of funds which would otherwise be distributed to securityholders.

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Except as otherwise specified in the prospectus supplement, any person into which the servicer or master servicer may be merged or consolidated, or any person resulting from any merger or consolidation to which the servicer is a party, or any person succeeding to the business of the servicer or master servicer , will be the successor of the servicer or master servicer under each Agreement, provided that that person is qualified to sell mortgage loans to, and service mortgage loans on behalf of, Fannie Mae or Freddie Mac.  Furthermore, the merger, consolidation or succession may not adversely affect the then current rating or ratings of the class or classes of securities of the related series that have been rated.

Events of Default; Rights Upon Event of Default

Servicer Default.  Servicer events of default under each Agreement will be specified in the prospectus supplement and may include:

· any failure by the servicer to make an Advance which continues unremedied for one business day;

· any failure by the servicer to make or cause to be made any other required payment pursuant to the Agreement which continues unremedied for one business day after written notice of such failure to the servicer in the manner specified in the Agreement;

· any failure by the servicer duly to observe or perform in any material respect any of its other covenants or agreements in the Agreement which continues unremedied for sixty days after written notice of the failure to the servicer in the manner specified in the Agreement; and

· certain events of insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings and certain actions by or on behalf of the servicer indicating its insolvency, reorganization or inability to pay its obligations.

Unless otherwise provided in the prospectus supplement, so long as a servicer event of default under an Agreement with an issuing entity remains unremedied, the master servicer shall terminate all of the rights and obligations of the servicer under the Agreement relating to such issuing entity and in and to the related issuing entity assets, whereupon the master servicer will succeed to all of the responsibilities, duties and liabilities of the servicer under the Agreement, including, if specified in the prospectus supplement, the obligation to make advances, and will be entitled to similar compensation arrangements.  In the event that the master servicer is unwilling or unable to act as successor to the servicer, it may appoint, or petition a court of competent jurisdiction for the appointment of, a housing and home finance institution which is a Fannie Mae or Freddie Mac approved servicer with a net worth of a least $15,000,000 to act as successor to the servicer under the Agreement.  Pending the appointment of a successor servicer, the master servicer is obligated to act in such capacity.  The master servicer and any such successor may agree upon the servicing compensation to be paid, which in no event may be greater than the compensation payable to the servicer under the Agreement.

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Master Servicer Default. To the extent not otherwise provided in the related prospectus supplement, a “master servicer event of default” under the Agreement will consist of:  (1) any failure by the master servicer to make a timely required deposit to the collection account, or to timely deposit any amounts required to be deposited in the distribution account; (2) after receipt of notice from the trustee, any failure of the master servicer to make any monthly advances when such monthly advances are due, which failure continues unremedied for a period of one business day; (3) any failure by the master servicer to furnish the issuing entity administrator the mortgage loan data sufficient to prepare the monthly statements to securityholders which failure continues unremedied for a period of one business day after the giving of written notice thereof as provided in the Agreement; (4) any failure by the master servicer to duly observe or perform in any material respect any other of its covenants or agreements in the Agreement or a failure to comply with accepted master servicing practices, which failure materially and adversely effects the rights of securityholders and which continues for 30 days after receipt of notice thereof as provided in the Agreement; (5) any impermissible dissolution, disposition of all or substantially all assets, or consolidation or merger on the part of the master servicer that does not meet the criteria specified in the Agreement; (6) any breach of a representation or warranty set forth in the Agreement that materially and adversely affects the interests of the securityholders, which breach continues 30 days after the giving of written notice thereof as provided in the Agreement; (7) any sale, pledge or assignment of the rights, or any delegation of the duties of, the master servicer under the Agreement, in any manner not permitted thereunder and without the prior written consent of parties as provided in the Agreement; (8) certain events of insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings regarding the master servicer indicating its insolvency, reorganization or inability to pay its obligations, and (9) any failure by the master servicer to deliver a report expressly required by the Agreement, and the continuation of such failure for a period of three business days after the date upon which written notice of such failure has been given to the master servicer by the seller, the depositor, or the trustee.

Rights Upon Master Servicer Event of Default. So long as any master servicer event of default remains unremedied, the trustee may, and at the direction of securityholders evidencing more than 50% of the voting rights, the trustee must, by written notification to the master servicer and to the depositor, terminate all of the rights and obligations of the master servicer under the Agreement (other than any rights of the master servicer as securityholder) and in and to the mortgage loans and the proceeds thereof (other than amounts owed to the master servicer prior to such termination), whereupon the trustee, unless a successor master service is appointed as provided below, shall succeed to all the responsibilities, duties and liabilities of the master servicer under the Agreement and will be entitled to similar compensation arrangements.  In the event that the trustee would be obligated to succeed the master servicer but is unwilling or unable so to act, it may appoint, or petition to a court of competent jurisdiction for the appointment of, a servicer satisfying the requirements of the Agreement to act as successor to the master servicer.  Pending such appointment, the trustee (unless prohibited by law from so acting) will be obligated to act in such capacity.  The trustee and such successor master servicer may agree upon the servicing compensation to be paid to such successor, provided that the master servicing compensation applicable to the successor master servicer will not exceed any applicable limitation set forth in the Agreement.

During the continuance of a master servicer event of default under the pooling and servicing agreement, the trustee will have the right to take action to enforce its rights and remedies and to protect and enforce the rights and remedies of the securityholders, and securityholders evidencing more than 50% of the class principal amount (or percentage interest) of each class of securities affected thereby may direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred upon the trustee.  However, the trustee will not be under any obligation to pursue any remedy or to exercise any of the trusts or powers unless the securityholders have offered the trustee reasonable security or indemnity against the cost, expenses and liabilities that may be incurred by the trustee.  Also, the trustee may decline to follow the direction if the trustee determines that the action or proceeding so directed may not lawfully be taken or would involve it in personal liability or be unjustly prejudicial to the non-assenting securityholders.

No securityholder, solely by virtue of that holder’s status as a securityholder, will have any right under the pooling and servicing agreement to institute any proceeding with respect to the pooling and servicing agreement, unless that securityholder previously has given to the trustee written notice of default and unless the holders of securities evidencing not less than 25% of the class principal amount (or percentage interest) of each class of securities affected thereby have made a written request upon the trustee to institute a proceeding in its own name as trustee thereunder, and have offered to the trustee reasonable indemnity, and the trustee for the number of days specified in the pooling and servicing agreement has neglected or refused to institute such a proceeding.

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The Pooling and Servicing Agreement

Amendment. In general, subject to the provisions of the particular agreement, the pooling and servicing agreement may be amended by the parties to that agreement, without the consent of the securityholders, (i) to cure any ambiguity, (ii) to correct or supplement any provision in the pooling and servicing agreement that may be inconsistent with any other provision of that agreement or with this prospectus or the applicable prospectus supplement or to correct any error, (iii) to obtain or maintain a rating for a class of securities from a nationally recognized statistical rating organization, (iv) to change the timing and/or nature of deposits in the collection account or any distribution account or to change the name in which an account is maintained (except that (x) deposits into the distribution account most be made no later than the related distribution date, and (y) either (1) such change may not adversely affect in any material respect the interests of any securityholder, as evidenced by an opinion of counsel or (2) such change may not adversely affect the then-current rating of any rated classes of securities, as evidenced by letters from the rating agencies), (v) to modify, eliminate or add to any of its provisions (x) to the extent necessary to avoid or minimize the risk of imposition of any tax on the issuing entity, provided that the trustee has received an opinion of counsel to the effect that (1) such action is necessary or desirable to avoid or minimize such risk and (2) such action will not adversely affect in any material respect the interests of any securityholder or (y) to restrict the transfer of any residual interest certificate, provided that the depositor has determined that such change would not adversely affect the applicable ratings of any rated classes of securities, as evidenced by letters from the rating agencies and (vi) to make any other provisions with respect to matters or questions arising under the pooling and servicing agreement, provided that such action will not adversely affect in any material respect the interests of any securityholder as evidenced by either an opinion of counsel or by letters from the rating agencies to the effect that such change will not adversely affect the then current ratings of any rated class of securities.

The pooling and servicing agreement may also be amended by the parties and, if applicable the credit enhancer, with the consent of the holders of securities of each class affected by the amendment, in each case evidencing not less than 66 2/3% of the aggregate percentage interests constituting such class, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the pooling and servicing agreement or of modifying in any manner the rights of the securityholders; provided, however, that no such amendment may (i) reduce in any manner the amount of or delay the timing of, collections of payments on the mortgage loans or distributions that are required to be made on a security of any class without the consent of the holder of such security or (ii) reduce the percentage of securities of any class the holders of which are required to consent to any such amendment unless the holders of all securities of such class have consented to the change in such percentage.  If a REMIC election is made with respect to an issuing entity, the trustee will not be entitled to consent to an amendment to the related pooling and servicing agreement without having first received an opinion of counsel to the effect that the proposed amendment will not cause such issuing entity to fail to qualify as a REMIC.

Optional Purchase or Substitution of Assets; Termination.  To the extent specified in the applicable prospectus supplement, the pooling and servicing agreement will provide that the master servicer, the holder of the residual interest in the issuing entity and/or another specified party will have the right to purchase all of the property of the issuing entity on a specified date, or upon the occurrence of a certain event such as the reduction of the total principal balance of the mortgage loans or securities to a specified level.  The purchase price will be specified in the applicable prospectus supplement.  In addition, to the extent specified in the applicable prospectus supplement, the pooling and servicing agreement will provide that upon the direction of a specified proportion of securityholders (or of certain securityholders) or another specified party, or upon the occurrence of a certain event, the trustee or its agent will solicit bids for sale of the property of the issuing entity to the highest bidder.  This auction may or may not be subject to a minimum bid price.

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To the extent specified in the applicable prospectus supplement, the pooling and servicing agreement will also provide that the depositor, an affiliate of the depositor or another party will have the right to purchase certain mortgage loans or a specified proportion of mortgage loans, or to substitute new loans for certain mortgage loans, on the conditions and in accordance with the procedures set forth in the pooling and servicing agreement.

Voting Rights; Limitations on Exercise of Rights.  Voting rights under the pooling and servicing agreement will be allocated among securityholders as provided in the applicable prospectus supplement.  If specified in the applicable prospectus supplement, voting rights of some or all securityholders will be exercised by an insurer or other party identified in the prospectus supplement.

Limitations on Rights of Securityholders.  Unless otherwise specified in the applicable prospectus supplement, no securityholder will have any right under the pooling and servicing agreement to institute any proceeding with respect to the pooling and servicing agreement unless (1) securityholders having not less than 51% of the voting rights under the pooling and servicing agreement have made written request to the trustee to institute proceedings in respect of a master servicer event of default in its own name as trustee; (2) the trustee, for 30 days after its receipt of such notice, request and offer of indemnity, has failed to institute any such proceeding; and (3) no direction inconsistent with such written request has been given to the trustee during such 30-day period by securityholders having not less than 51% of the voting rights.  However, the trustee will be under no obligation to exercise any of the trusts or powers vested in it by the pooling and servicing agreement or to institute, conduct or defend any litigation thereunder or in relation thereto at the request, order or direction of any of the securityholders covered by the pooling and servicing agreement, unless such securityholders have offered to the trustee reasonable security or indemnity against the costs, expenses and liabilities that may be incurred thereby.

Certain Risks.  If the master servicer or servicer were to become a debtor in a bankruptcy or insolvency proceeding, it could seek to reject its obligations under the pooling and servicing agreement pursuant to Section 365 of the Bankruptcy Code or the applicable provisions of the applicable insolvency law, thus forcing the trustee to appoint a successor servicer.

If the master servicer or servicer resigns or is in default and the cost of servicing the mortgage loans has increased, the trustee may not be able to find a successor master servicer or servicer willing to service the loans for the master servicing fee or servicing fee specified in the applicable pooling and servicing agreement.  These circumstances might cause the trustee either to amend the servicing agreement or seek authority from securityholders to increase the applicable fee to an amount necessary to provide acceptable compensation to the then current master servicer or servicer or any replacement master servicer or servicer.  If such approval were not granted by securityholders, under the law generally applicable to trusts the trustee could seek approval for such an increase from a court if such increase were necessary for the preservation or continued administration of the issuing entity.  Any increase in the master servicing fee or servicing fee would reduce amounts available for distribution to securityholders, particularly holders of subordinate securities,

The Pooling and Servicing Agreement and Trustee

In the case of certificates issued pursuant to a pooling and servicing agreement and unless otherwise specified in the related prospectus supplement, the following will be applicable to a trustee in connection with a pooling and servicing agreement.

Duties of the Trustee.  The trustee will be required to perform only those duties specifically required of it under the pooling and servicing agreement unless a master servicer event of default has occurred, in which case the trustee may take such additional actions as described above under “—Rights Upon Master Servicer Event of Default.” Upon receipt of the various certificates, statements, reports or other instruments required to be furnished to it, the trustee will be required to examine them to determine whether they are in the form required by the pooling and servicing agreement; however, the trustee will not be responsible for the accuracy or content of any documents furnished to the trustee by the securities or issuing entity administrator, the master servicer or any other party.

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The trustee will not have any liability arising out of or in connection with the pooling and servicing agreement, except that the trustee may be held liable for its own negligent action or failure to act, or for its own willful misconduct; provided, however, that the trustee will not be personally liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of the certificateholders in a master servicer event of default, and the trustee will not be deemed to have notice of any master servicer event of default unless an officer of the trustee has actual knowledge of the master servicer event of default or written notice of a master servicer event of default is received by the trustee at its corporate trust office.  See “—Master Servicer Default” above.  The trustee is not required to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties under the pooling and servicing agreement, or in the exercise of any of its rights or powers, if it has reasonable grounds for believing that repayment of those funds or adequate indemnity against risk or liability is not reasonably assured to it.

The trustee will have no duties under the pooling and servicing agreement with respect to any claim or notice it may receive or which may be alleged to have been delivered to or served upon it by the parties as a consequence of the assignment of any mortgage loan under the pooling and servicing agreement; however, the trustee will remit to the master servicer any claim or notice it may receive which is delivered to the trustee’s corporate trust office and which contains information sufficient to permit the trustee to make a determination that the real property to which such document relates is a mortgaged property.  None of the provisions in the pooling and servicing agreement shall in any event require the trustee to perform, or be responsible for the manner of performance of, any of the obligations of the master servicer.  The trustee will not be responsible for any act or omission of the master servicer, any securities or issuing entity administrator, the depositor or any other party.

The trustee will not be responsible for (a) any recording or filing of any agreement or of any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing which may have been made, or the validity, priority, perfection or sufficiency of the security for the certificates, (b) the payment of any insurance related to the certificates or the mortgage loans or (c) the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the issuing entity, other than from funds available in any issuing entity account.  The trustee is not responsible for the validity of the pooling and servicing agreement or the certificates or the validity, priority, perfection or sufficiency of the security for the certificates.

Expenses and Indemnities of the Trustee.  Unless otherwise specified in the related prospectus supplement, the trustee will be entitled to reimbursement of all reasonable expenses, disbursements and advances incurred or made by the trustee in accordance with the pooling and servicing agreement, except for expenses, disbursements and advances incurred by the trustee in the routine administration of its duties under the pooling and servicing agreement and other transaction documents and except for any expenses arising from its negligence, bad faith or willful misconduct. The trustee will also be entitled to indemnification from the issuing entity for any loss, liability or expense incurred, arising out of, or in connection with, the acceptance or administration of the trusts created under the pooling and servicing agreement or in connection with the performance of its duties under the pooling and servicing agreement, the mortgage loan purchase agreement or any custodial agreement, including the costs and expenses of defending itself against any claim in connection with the exercise or performance of any of its powers or duties under the pooling and servicing agreement, except for any expenses arising from the trustee's negligence, bad faith or willful misconduct.

The trustee will be entitled to reimbursement for its expenses and indemnification amounts as described above from collections, prior to distribution of any amounts to certificateholders.

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Resignation of Trustee.  The trustee may, upon written notice to the depositor, the master servicer and any securities or issuing entity administrator, resign at any time, in which event the depositor will appoint a successor trustee.  If no successor trustee has been appointed and has accepted the appointment within 30 days after the trustee’s notice of resignation, the resigning trustee may petition any court of competent jurisdiction for appointment of a successor trustee.

The trustee may be removed at any time by the depositor if (a) the trustee ceases to be eligible to continue to act as trustee under the pooling and servicing agreement, (b) the trustee becomes incapable of acting, or is adjudged bankrupt or insolvent, or a receiver of the trustee is appointed, (c) a tax is imposed or threatened with respect to the issuing entity by any state in which the trustee or the trust fund held by the trustee is located or (d) the continued use of the trustee would result in a downgrading of the rating by any rating agency of any class of certificates.  In addition, the trustee may be removed at any time by holders of more than 50% of the class principal amount (or percentage interest) of each class of certificates upon 30 days’ written notice to the trustee.

Any resignation or removal of the trustee and appointment of a successor trustee will not become effective until acceptance of the appointment by the successor trustee, whereupon the predecessor trustee will mail notice of the succession of the successor trustee to all certificateholders; the expenses of the mailing are to be borne by the predecessor trustee.  The predecessor trustee will be required to assign to the successor trustee its interest under all mortgage loan files, and will be required to assign and pay over to the successor trustee the entire trust, together with all necessary instruments of transfer and assignment or other documents properly executed necessary to effect that transfer.  In addition, the master servicer and the predecessor trustee will be required to execute and deliver such other instruments and do such other things as may reasonably be required to vest in the successor trustee all such rights, powers, duties and obligations.

 The Indenture

Modification of Indenture.  If an issuing entity has issued bonds pursuant to an indenture, the issuing entity and the indenture trustee may, with the consent of holders of 66 2/3% (or such other percentage as is specified), by principal balance (or as is otherwise specified) of the outstanding bonds of the related series (or of one or more specified classes of bonds), execute a supplemental indenture to add provisions to, change in any manner or eliminate any provisions of, the indenture, or modify (except as provided below) in any manner the rights of the securityholders or bondholders, as the case may be.

Without the consent of securityholders, the issuing entity and the trustee may enter into supplemental indentures for the purposes of, among other things, conform any provision of the indenture to the provisions of the applicable prospectus supplement and this prospectus, or to effect the qualification of the indenture under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).  However, without the consent of each bondholder affected by the provisions of a supplemental indenture, no supplemental indenture will:

· change the amount of, or delay the timing of, payments on any bond;

· alter the obligation of the master servicer or indenture trustee to make Advances or alter the servicing standards set forth in the sale and servicing agreement or the applicable Agreement;

· reduce the proportion of bonds required to consent to a supplemental indenture; or

· permit the creation of any lien on any collateral prior to or on parity with the lien of the indenture.

In addition, the trustee will not enter into any supplemental indenture unless the trustee has first received an opinion of counsel as to certain tax matters as provided in the indenture.

Events of Default Under the Indenture.  Except as otherwise specified in the prospectus supplement, events of default under the indenture for each series of bonds include:

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· a default in the payment of any principal of or interest on any bond as specified in the prospectus supplement;

· failure to perform in any material respect any other covenant of the depositor or the issuing entity in the indenture which continues for a period of thirty (30) days after notice thereof is given in accordance with the procedures described in the prospectus supplement;

· certain events of bankruptcy, insolvency, receivership or liquidation of the depositor or the issuing entity; or

· any other event of default provided with respect to bonds of that series including, but not limited to, certain defaults on the part of the issuing entity under any credit enhancement instrument supporting such bonds.

If an event of default with respect to the bonds of any series at the time outstanding occurs and is continuing, either the trustee or the holders of a majority of the then aggregate outstanding amount of the bonds of that series or the credit enhancer of that series, if any, may declare the principal amount (or, if the bonds have an interest rate of 0%, that portion of the principal amount as may be specified in the terms of that series, as provided in the prospectus supplement) of all the bonds of that series to be due and payable immediately.  This declaration may, under certain circumstances, be rescinded and annulled by the holders of more than 50% of the aggregate voting rights of the bonds of the related series.  

If, following an event of default with respect to any series of bonds, the bonds of that series have been declared to be due and payable and the prospectus supplement and applicable Agreement so provide, the trustee may, in its discretion, notwithstanding the acceleration of the bonds, elect to maintain possession of the collateral securing the bonds of that series and to continue to apply distributions on the collateral as if there had been no declaration of acceleration if the collateral continues to provide sufficient funds for the payment of principal of and interest on the bonds of that series as they would have become due if there had not been such a declaration.  In addition, unless otherwise specified in the prospectus supplement, the trustee may not sell or otherwise liquidate the collateral securing the bonds of a series following an event of default, unless:

· the holders of 100% of the outstanding bonds of such series consent to the sale;

· the proceeds of the sale or liquidation are sufficient to pay in full the principal of and accrued interest, due and unpaid, on the outstanding bonds of the series at the date of the sale; or

· the trustee determines that the collateral would not be sufficient on an ongoing basis to make all payments on the bonds as those payments would have become due if the bonds had not been declared due and payable, and the trustee obtains the consent of the holders of 66 2/3% of the aggregate voting rights of the bonds of that series.

In the event that the trustee liquidates the collateral in connection with an event of default, the indenture provides that the trustee will have a prior lien on the proceeds of that liquidation for unpaid fees and expenses.  As a result, upon the occurrence of an event of default, the amount available for distribution to the bondholders could be less than would otherwise be the case.  However, the trustee may not institute a proceeding for the enforcement of its lien except in connection with a proceeding for the enforcement of the lien of the indenture for the benefit of the bondholders after the occurrence of an event of default.

Except as otherwise specified in the prospectus supplement, in the event the principal of the bonds of a series is declared due and payable, as described above, the holders of any of the bonds issued at a discount from par may be entitled to receive no more than an amount equal to the unpaid principal amount thereof less the amount of the discount which is unamortized.

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Subject to the provisions of the indenture relating to the duties of the trustee, in case an event of default shall occur and be continuing with respect to a series of bonds, the trustee shall be under no obligation to exercise any of the rights or powers under the indenture at the request or direction of any of the holders of bonds of the series, unless those holders offer to the trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in complying with their request or direction, Subject to these provisions for indemnification and certain limitations contained in the indenture, the holders of a majority of the then aggregate outstanding amount of the bonds of a series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to the bonds of the series, and the holders of a majority of the then aggregate outstanding amount of the bonds of the series may, in certain cases, waive any default with respect thereto, except a default in the payment of principal or interest or a default in respect of a covenant or provision of the indenture that cannot be modified without the waiver or consent of all the holders of the outstanding bonds of the series affected thereby.

Covenants.  Each indenture will provide generally that the related issuing entity will not, among other things:

· so long as any bonds are outstanding, dissolve or liquidate in whole or in part or merge or consolidate with any other entity;

· except as expressly permitted by the indenture or other applicable Agreement, sell, transfer or otherwise dispose of the assets of the issuing entity, unless directed to do so by the trustee;

· permit the validity or effectiveness of the related indenture to be impaired, or permit the indenture to be amended, or permit any person to be released from any covenants or obligations under the indenture, except as expressly provided by the indenture;

· permit any lien or other encumbrance to be created on or otherwise burden the collateral (other than by operation of law as provided in the indenture); or

· take any other action.  that may cause the issuing entity to be taxable as an association, a publicly traded partnership or a taxable mortgage pool pursuant to the Code.

In addition, the trustee and the securityholders, by accepting the securities, will covenant that they will not at any time institute against the issuing entity any bankruptcy, reorganization or other proceeding under any federal or state bankruptcy or similar law.

None of the indenture trustee, the owner trustee, the master servicer or any securities or issuing entity administrator in their respective individual capacities, or any holder of a certificate representing an ownership interest in the issuing entity or any of their respective owners, beneficiaries, agents, officers, directors, employees, affiliates, successors or assigns will, in the absence of an express agreement to the contrary, be personally liable for the payment of the principal of or interest on the bonds or for the agreements of the issuing entity contained in any indenture.

Annual Compliance Statement.  Each issuing entity will be required to file annually with the related indenture trustee a written statement as to the fulfillment of its obligations under the applicable indenture.

Indenture Trustee’s Annual Report.  To the extent required under the Trust Indenture Act, the indenture trustee for each applicable issuing entity will be required to send to all related securityholders annually a brief report as to its eligibility and qualification to continue as indenture trustee under the related indenture; any amounts advanced by it under the indenture; the amount, interest rate and maturity date of specified indebtedness owing by the issuing entity to the applicable indenture trustee in its individual capacity; the property and funds physically held by the indenture trustee; and any action taken by the indenture trustee that materially affects the related bonds and that has not been previously reported.

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Satisfaction and Discharge of Indenture.  An indenture will be discharged with respect to the collateral securing the related bonds upon the delivery to the indenture trustee for cancellation of all of those securities or, with specified limitations, upon deposit with the indenture trustee of funds sufficient for the payment of all of the securities.

Redemption.  The bonds will be subject to redemption under the circumstances described in the related prospectus supplement.

The Indenture Trustee

In the case of bonds issued pursuant to an indenture and unless otherwise specified in the related prospectus supplement, the following will be applicable to an indenture trustee in connection with an indenture.

Duties of the Indenture Trustee.  If no indenture default has occurred, the indenture trustee will be required to perform only those duties specifically required of it under the indenture and the sale and servicing agreement.  As described under “—The Trustees; Agents” below, a securities administrator may perform on behalf of the indenture trustee certain administrative functions required under the indenture and the sale and servicing agreement.

Upon receipt of the various certificates, statements and opinions required to be furnished to it, the indenture trustee will be required to examine them to determine whether they are in the form required by the indenture; however, the indenture trustee will not be responsible for the accuracy or content of any certificates, statements or opinions furnished to it by the issuer, the depositor, a securities administrator, if any, the master servicer or any other party and, in the absence of bad faith on its part, may conclusively rely on such certificates, statements and opinions.

The indenture trustee may be held liable for its own negligent action or failure to act, or for its own willful misconduct; provided, however, that the indenture trustee will not be personally liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of the securityholders in an indenture default, and the indenture trustee will not be deemed to have notice of any indenture default unless an officer of the indenture trustee has actual knowledge of the indenture default or written notice of an indenture default is received by the indenture trustee at its corporate trust office.  The indenture trustee is not required to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties under the Indenture, or in the exercise of any of its rights or powers, if it has reasonable grounds for believing that repayment of those funds or adequate indemnity against risk or liability is not reasonably assured to it,

Expenses and Indemnities of the Indenture Trustee.  The indenture trustee will be entitled to reimbursement of all reasonable expenses incurred by it and any disbursements or advances made by it in accordance with the indenture or the sale and servicing agreement, except for expenses incurred or any disbursements and advances made by it in the routine administration of its duties under the indenture and the sale and servicing agreement and except for any expenses arising from its negligence, bad faith or willful misconduct.  The indenture trustee will also be entitled to indemnification from the issuing entity for any claim, loss, liability or expense, including reasonable attorneys’ fees, incurred by it in connection with the administration of the issuing entity and the performance of its duties under the indenture the sale and servicing agreement or any other document or agreement to which the indenture trustee is a party.

The indenture trustee will be entitled to reimbursement for its expenses and indemnification amounts as described above from amounts allocable to interest and principal on the mortgage loans, prior to payment of any amounts to bondholders.

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Resignation or Removal of Indenture Trustee.  The indenture trustee may, upon 90 days’ advance written notice to the depositor, the issuer, each bondholder and each rating agency, resign at any time, in which event the issuer will appoint a successor indenture trustee that satisfies the eligibility requirements provided in the indenture.  The indenture trustee may also be removed at any time by the issuer if (a) the indenture trustee ceases to be eligible to continue to act as indenture trustee under the indenture; (b) the indenture trustee is adjudged bankrupt or insolvent; (c) a receiver or other public officer takes charge of the indenture trustee or its property; or (d) the indenture trustee otherwise becomes incapable of acting.  If the indenture trustee is removed, the issuer will promptly appoint a successor indenture trustee.  If a successor indenture trustee does not take office within 30 days after the retiring indenture trustee resigns or is removed, the retiring indenture trustee, the issuer or the holders of more than 50% of the aggregate class principal amount of the outstanding bonds may petition any court of competent jurisdiction for appointment of a successor indenture trustee.

Any resignation or removal of the indenture trustee and appointment of a successor indenture trustee will not become effective until acceptance of the appointment by the successor indenture trustee, whereupon the successor indenture trustee will mail notice of its succession to all bondholders.  The predecessor indenture trustee will be required to transfer all property held by it as indenture trustee to the successor indenture trustee.

Any fees and expenses owed to the retiring indenture trustee in connection with such resignation or removal will be paid as described in the related prospectus supplement.

The Trust Agreement

Each issuing entity that is an obligor on bonds issued under an indenture will be organized pursuant to a deposit trust agreement (the “trust agreement”) as a statutory trust or a common law trust, as specified in the applicable prospectus supplement, for the limited purposes of, generally:

· issuing bonds pursuant to an indenture and to conducting an offering of the bonds;

· issuing certificates pursuant to a trust agreement and conducting an offering or a private placement of the certificates;

· acquiring mortgage loans and other property from the depositor and, pursuant to an indenture, pledging the mortgage loans to the indenture trustee as security for the issuing entity’s obligations under the bonds;

· entering into and performing its obligations under the sale and servicing agreement or other applicable agreement, the trust agreement, the indenture, the servicing agreements, the custodial agreement, the administration agreement and any other applicable agreements;

· entering into any applicable interest rate cap or swap agreements;

· such other purposes as are described in the applicable prospectus supplement;

· engaging in those activities that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith; and

· engaging in such other activities as may be appropriate in connection with conservation of the trust estate and the making of payments to securityholders.

Under the terms of the related trust agreement, each issuing entity will be prohibited from, among other things, incurring any debt other than as contemplated by the indenture, the sale and servicing agreement and related documents.

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Duties of the Owner Trustee.  The owner trustee will be required to discharge (or cause to be discharged) all of its responsibilities pursuant to the terms of the trust agreement and any other document or agreement to which the issuer or the owner trustee is a party and will administer the trust in the interest of the holder of the ownership certificate issued pursuant to the trust agreement, in accordance with the provisions of the trust agreement.  As described in the related prospectus supplement, the securities or issuing entity administrator, the indenture trustee and the depositor will perform on behalf of the owner trustee and the issuing entity certain administrative functions required under the trust agreement, the indenture and the sale and servicing agreement.

The owner trustee, in its individual capacity, may be held liable for its own willful misconduct, gross negligence or bad faith in performing its duties as owner trustee; provided, however, that the owner trustee, in its individual capacity, will not be liable for any error of judgment made in good faith by an officer of the owner trustee or with respect to any action taken or omitted to be taken by the owner trustee in accordance with the instructions of the holder of the ownership certificate.   The owner trustee is not required to expend or risk its own funds or otherwise incur any financial liability in the performance of any of the owner trustee’s duties under the trust agreement or any other document or agreement to which the issuer or the owner trustee is a party, or in the exercise of any of the owner trustee’s rights or powers, if the owner trustee has reasonable grounds for believing that repayment of those funds or adequate indemnity against risk or liability is not reasonably assured or provided to it.

Expenses and Indemnities of the Owner Trustee.  The owner trustee will be entitled to reimbursement of all reasonable expenses incurred by it in accordance with the trust agreement.  Such reimbursement will be paid from amounts allocable to interest and principal on the mortgage loans, prior to payment of any amounts to securityholders.  The owner trustee will also be entitled to indemnification from the issuing entity for any claim, loss, liability or expense incurred by it in connection with the administration of the trust and the performance of its duties under the trust agreement or any other document or agreement to which the issuer or the owner trustee is a party, except to the extent that any such claim, loss, liability or expense arises out of or results from the owner trustee’s own willful misconduct, fraud or gross negligence or results from any of the other circumstances that are specified in the trust agreement.  Unless otherwise provided in the prospectus supplement, any amounts payable in connection with such indemnification will be paid from the distribution account prior to payment of any amounts distributable to the ownership certificate under the sale and servicing agreement.

Resignation or Removal of Owner Trustee. The owner trustee may, upon 30 days’ advance written notice to the depositor, the holder of the ownership certificate and the indenture trustee, resign at any time, in which event the depositor will appoint a successor owner trustee that satisfies the eligibility requirements provided in the trust agreement.  The owner trustee may also be removed at any time by the depositor if (a) the owner trustee ceases to be eligible to continue to act as owner trustee under the trust agreement, (b) the owner trustee is legally unable to act or is adjudged bankrupt or insolvent or (c) a receiver or other public officer takes charge of the owner trustee or its property.  If the owner trustee is removed the depositor will promptly appoint a successor owner trustee.  If a successor owner trustee does not take office within 30 days after the retiring owner trustee resigns or is removed, the retiring owner trustee may petition any court of competent jurisdiction for appointment of a successor owner trustee.

Any resignation or removal of the owner trustee and appointment of a successor owner trustee will not become effective until acceptance of the appointment by the successor owner trustee, whereupon the securities or issuing entity administrator will provide notice of such resignation and appointment to the holder of the ownership certificate, the indenture trustee, the securityholders and the rating agencies.

Any fees and expenses owed to the retiring owner trustee in connection with such resignation or removal will be paid as described in the related prospectus supplement.

The Custodial Agreement

Unless otherwise specified in the related prospectus supplement, in connection with the sale of the mortgage loans by the depositor to the issuing entity on the related closing date, the depositor will be required to deliver a loan file to the custodian with respect to each mortgage loan consisting of, as to each mortgage loan:

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· the original mortgage note endorsed to the order of the trustee or in blank, or a lost note affidavit in lieu thereof, with all prior and intervening endorsements;

· the original recorded mortgage, or if the original mortgage has been submitted for recordation but has not been returned by the applicable public recording office, a certified copy thereof;

· for any mortgage loan not recorded with MERS® System, the original assignment of the mortgage to the trustee or in blank, in recordable form (except as described in the related prospectus supplement);

· each original recorded intervening assignment of the mortgage as may be necessary to show a complete chain of title to the trustee, or if any assignment has been submitted for recordation but has not been returned from the applicable public recording office or is otherwise not available, a certified copy thereof;

· the original of the policy or certificate of primary mortgage guaranty insurance, to the extent available, or a copy of such policy certified as true and correct by the insurer;

· the original title insurance policy, note of title insurance or written commitment, or a copy of such policy certified as true and correct by the insurer; and

· the original or certified copies of each assumption agreement, modification agreement, written assurance or substitution agreement, if any.

The custodian will hold the related mortgage loan documents on behalf of the trustee pursuant to the custodial agreement.  The mortgage loan documents related to a mortgage loan will be held separate from other mortgage loan files held by the custodian, The custodian will maintain the mortgage loan documents in a fireproof facility intended for the safekeeping of mortgage loan files.

The Trustees; Agents

The trustee under the pooling and servicing agreement for a series, or, if applicable, the indenture trustee under the indenture and the owner trustee under the trust agreement for a series, will be identified in the applicable prospectus supplement.  References in this prospectus to “trustee” are intended to refer as to any particular series of securities to the pooling and servicing agreement trustee, indenture trustee or owner trustee, as applicable, unless the context requires otherwise.

Each trustee’s liability in connection with the issuance and sale of securities of a series and its administration of the issuing entity will be limited as provided in the applicable agreements, and each trustee will be indemnified by the related issuing entity for losses and expenses it may incur, to the extent provided in the applicable agreements.  Unless otherwise provided in the applicable agreements a trustee may resign at any time, in which event the depositor, master servicer or other party so designated will be obligated to appoint a successor trustee.  A trustee may be removed by the depositor or the master servicer or by a majority or supermajority of securityholders, to the extent provided in the applicable agreements.

To the extent specified in the applicable prospectus supplement, a securities administrator, paying agent or other party may be appointed to perform certain functions that would otherwise be performed by the trustee.  Such a party will be entitled to compensation as described in the prospectus supplement.  In addition, the pooling and servicing agreement or indenture will provide that the trustee may appoint agents to perform certain functions from time to time.

Loss Mitigation Advisor; Investment Manager; Other Parties

The agreements or other documents for a series may provide for the appointment of (1) a loss mitigation advisor that will perform the functions described in the applicable prospectus supplement, which may include analysis of mortgage loan performance data and advising the servicer regarding servicing of defaulted loans, (2) an investment manager, for the limited purposes described in the prospectus supplement, or (3) such other parties performing such other functions as are described in the prospectus supplement.  Such parties will be entitled to compensation as described in the prospectus supplement.  An affiliate of the depositor may be designated for any such positions.

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CERTAIN LEGAL ASPECTS OF THE LOANS

The following discussion contains summaries, which are general in nature, of certain legal matters relating to the loans.  Because these legal aspects are governed primarily by applicable state law and because the applicable state laws may differ substantially from state to state, the descriptions do not, except as expressly provided below, reflect the laws of any particular state, nor do they encompass the laws of all states in which the security for the loans is situated.  The descriptions are qualified in their entirety by reference to the applicable federal laws and the appropriate laws of the states in which loans may be originated.

General

Security Instruments.  The loans for a series may be secured by deeds of trust, mortgages, security deeds or deeds to secure debt, depending upon the prevailing practice in the state in which the property subject to the loan is located, and these security instruments are generally recorded in a state or county office. Typically, the borrower, who is also the owner of the real property, delivers to the lender or the lender’s agent or trustee a note or bond and the applicable security instrument. Priority among the holders of interests secured by the real property depends on the terms of the security instruments and, generally, on the order of recordation of the security instruments with a state or county office.  There are two parties to a mortgage, the mortgagor, who is the borrower and owner of the mortgaged property, and the mortgagee, who is the lender or, sometimes, lender’s agent or trustee.  Although a deed of trust is similar to a mortgage, a deed of trust formally has three parties, the borrower-property owner called the trustor (similar to a mortgagor), a lender or lender’s agent or trustee (similar to a mortgagee) called the beneficiary, and a third-party grantee called the trustee.  Under a deed of trust, the borrower grants the property, irrevocably until the debt is paid, in trust, generally with a power of sale, to the trustee for the benefit of the beneficiary, to secure payment of the obligation evidenced by the note or bond.  In California, deeds of trust are used almost exclusively instead of mortgages. A security deed and a deed to secure debt are special types of deeds which indicate on their face that they are granted to secure an underlying debt.  By executing a security deed or deed to secure debt, the grantor, who is the borrower and owner of the property, conveys title to, as opposed to merely creating a lien upon, the subject property to the grantee, who is the lender or lender’s agent or trustee, until such time as the underlying debt is repaid. The trustee’s authority under a deed of trust, the mortgagee’s authority under a mortgage and the grantee’s authority under a security deed or deed to secure debt are governed by law and, with respect to some deeds of trust, the directions of the beneficiary. Generally, any security interest in real property is subordinate to liens for real estate taxes or assessments, including if such liens for real estate taxes or assessments are recorded after recordation of the security instrument.

Cooperative Loans.  Some of the loans may be cooperative loans.  A cooperative is owned by tenant-stockholders, who, through ownership of stock, shares or membership certificates in the corporation, receive proprietary leases or occupancy agreements which confer exclusive rights to occupy specific cooperative units.  The cooperative owns the real property and the specific units and is responsible for management of the property.  An ownership interest in a cooperative and the accompanying rights are financed through a cooperative share loan evidenced by a promissory note and secured by a security interest in the cooperative shares or occupancy agreement or proprietary lease.

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Foreclosure/Repossession

Commencing Foreclosure.

Deed of Trust.  Foreclosure of a deed of trust is generally accomplished by a non-judicial sale under a specific provision in the deed of trust which authorizes the trustee to sell the property at public auction upon any default by the borrower under the terms of the note or deed of trust.  In certain states, foreclosure of a deed of trust also may be accomplished by judicial action in the manner provided for foreclosures of mortgages.  In addition to any notice requirements contained in a deed of trust, in some states, including California, the trustee must record a notice of default and send a copy to certain parties, including, without limitation, the borrower-trustor, any person who has recorded a request for a copy of any notice of default and notice of sale, any successor in interest to the borrower-trustor, and the beneficiary of any junior deed of trust.  In some states, including California, the borrower, or any other person having a subordinate encumbrance on the real estate, may, during a statutorily prescribed reinstatement period, cure monetary defaults under the loan by paying the entire amount in arrears plus other designated costs and expenses incurred by or on behalf of lender in enforcing the borrower’s obligation, which designated costs and expenses are generally set forth in state law.  If the borrower or a junior lienholder cures such defaults during the reinstatement period, the loan is “reinstated” and the foreclosure process is terminated. If the reinstatement period expires without the defaults having been cured, the borrower or junior lienholder may not thereafter reinstate the loan except by paying the loan in full.  If the deed of trust is not reinstated within any applicable cure period, a notice of sale must be posted in a public place and, in most states, including California, published for a specific period of time in one or more newspapers. Furthermore, some state laws require that a copy of the notice of sale be posted on the property encumbered by the deed of trust and sent to all parties having an interest of record in the property.  In California, the entire process from recording a notice of default to a non-judicial sale usually takes four to five months.

Mortgages.  Foreclosure of a mortgage is generally accomplished by judicial action.  The action is initiated by the service of legal pleadings upon all parties having an interest in the real property encumbered by the mortgage.  Delays in completion of the foreclosure may result from difficulties in locating necessary parties.  Judicial foreclosure proceedings may be contested by any of the parties to the foreclosure proceeding.  When the mortgagee’s right to foreclosure is contested, the legal proceedings necessary to resolve the issue can be time consuming.  After the completion of a judicial foreclosure proceeding, the court generally issues a judgment of foreclosure and appoints a referee or other court officer to conduct the sale of the property.  In some states, mortgages may also be foreclosed non-judicially, pursuant to a power of sale provided in the mortgage.

Foreclosure Sales. Although foreclosure sales, whether pursuant to non-judicial sale rights or by judicial action, are typically public sales, frequently no third-party purchaser bids in excess of the amount of the lender’s lien because of the difficulty of determining the exact status of title to the property, the possible deterioration of the property during foreclosure proceedings and a requirement that the purchaser pay for the property in cash or by cashier’s check.  As a result, the foreclosing lender often purchases the property from the trustee or referee. The foreclosing lender may purchase the property for an amount equal to the principal amount outstanding under the loan, accrued and unpaid interest and the expenses of foreclosure, in which event the mortgagor’s debt will be extinguished, or, in states where deficiency judgments are available, the lender may decide to purchase for a lesser amount in order to preserve its right against a borrower to seek a deficiency judgment.  Subject to the right of the borrower in some states to remain in possession of the property during a redemption period, upon purchasing the property at a foreclosure sale the lender will assume the burden of ownership, including obtaining hazard insurance and making repairs at its own expense as are necessary to render the property suitable for sale to a third party.  The lender will commonly obtain the services of a real estate broker and pay the broker’s commission in connection with the sale of the property to a third party.  Depending upon market conditions, the ultimate proceeds of the sale of the property may not equal the lender’s investment in the property.

Foreclosure is an equitable remedy with respect to which the courts have broad discretion, exercised generally to mitigate the legal consequences to the borrower of the borrower’s defaults under the loan documents.  Examples of such judicial remedies include requirements that the lender undertake affirmative and expensive actions to determine the causes of the borrower’s default and the likelihood that the borrower will be able to reinstate the loan.  In some cases, courts have eliminated the right of a lender to realize upon its security if the default under the security agreement is not monetary, such as the borrower’s failure to maintain the property adequately or the borrower’s execution of secondary financing affecting the property.  Finally, some courts have been faced with the issue of whether federal or state constitutional provisions reflecting due process concerns for fair notice require that borrowers under deeds of trust receive notice longer than that prescribed by statute.  For the most part, these cases have upheld the notice provisions as being reasonable or have found that the sale by a trustee under a deed of trust does not involve sufficient state action to afford constitutional protection to the borrower.

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When the holder of a subordinate security instrument cures the borrower’s defaults, causing the loan to be reinstated, or repays the full amount of the senior security instrument, thereby redeeming the borrower’s right to the real property, the amount paid by the junior lienholder to cure the borrower’s defaults or redeem the borrower’s right to the real property becomes a part of the indebtedness secured by the junior security instrument.

Foreclosing Cooperative Loans. The cooperative shares owned by the tenant-stockholder and pledged to the lender or lender’s agent or trustee are, in almost all cases, subject to restrictions on transfer as set forth in the cooperative’s certificate of incorporation and bylaws, as well as the tenant-stockholder’s proprietary lease or occupancy agreement, and may be cancelled by the cooperative for failure by the tenant-stockholder to pay rent or other obligations or charges owed by such tenant-stockholder, including mechanics’ liens against the cooperative’s property incurred by such tenant-stockholder. A proprietary lease or occupancy agreement generally permits the cooperative to terminate such lease or agreement in the event a tenant-stockholder fails to make payments or defaults in the performance of covenants required thereunder. Furthermore, a default by the tenant-stockholder under the proprietary lease or occupancy agreement will usually constitute a default under the security agreement between the lender and the tenant-stockholder.

Typically, the lender and the cooperative enter into a recognition agreement which establishes the rights and obligations of both parties in the event of a default by the tenant-stockholder with respect to its obligations under the proprietary lease or occupancy agreement and/or the security agreement.  The recognition agreement generally provides that, in the event that the tenant-stockholder has defaulted under the proprietary lease or occupancy agreement, the cooperative will take no action to terminate such lease or agreement until the lender has been provided with an opportunity to cure the defaults.  The recognition agreement typically provides that if the proprietary lease or occupancy agreement is terminated, the cooperative will recognize the lender’s lien in respect of the proprietary lease or occupancy agreement, and will deliver to lender proceeds from the sale of the cooperative apartment unit to a third party up to the amount to which lender is entitled by reason of its lien, subject to the cooperative’s right to sums due under such proprietary lease or occupancy agreement.  The total amount owed to the cooperative by the tenant-stockholder, which the lender generally cannot restrict and does not monitor, may reduce the proceeds available to lender to an amount below the outstanding principal balance of the cooperative loan and accrued and unpaid interest thereon.

Recognition agreements typically also provide that in the event of a foreclosure on a cooperative loan, the lender must obtain the approval or consent of the cooperative as required by the proprietary lease or occupancy agreement before transferring the cooperative shares or assigning the proprietary lease to a third party.  Generally, the lender is not limited in any rights it may have to dispossess the tenant-stockholders.

In some states, foreclosure on the cooperative shares is accomplished by a sale in accordance with the provisions of Article 9 of the Uniform Commercial Code and the security instrument relating to those shares.  Article 9 requires that a sale be conducted in a “commercially reasonable” manner.  Whether a foreclosure sale has been conducted in a “commercially reasonable” manner will depend on the facts in each case and state law.  In determining commercial reasonableness, a court typically will look to the notice given the borrower and third parties (generally including a publication requirement) and the method, manner, time, place and terms of the foreclosure.

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As described above, any provision in the recognition agreement regarding the right of the cooperative to receive sums due under the proprietary lease or occupancy agreement prior to lender’s reimbursement supplements any requirement under Article 9 that the proceeds of the sale will be applied first to pay the costs and expenses of the sale and then to satisfy the indebtedness secured by the lender’s security interest.  If there are proceeds remaining after application to costs and expenses of the sale, amounts due under the proprietary lease or occupancy agreement, and satisfaction of the indebtedness, the lender must account to the tenant-stockholder for such surplus.  Conversely, if a portion of the indebtedness remains unpaid, the tenant-stockholder is generally responsible for the deficiency.  Please refer to the discussion under the heading “—Anti-Deficiency Legislation; Tax Liens” below.

In the case of foreclosure on a cooperative which was converted from a rental building to a cooperative under a non-eviction plan, some states require that a purchaser at a foreclosure sale take the property subject to rent control and rent stabilization laws which apply to certain tenants who elected to remain in the building but who did not purchase shares in the cooperative when the building was so converted.

Recent Actions to Reduce, Suspend or Delay Foreclosure.  Recently, the federal government has commenced implementation of programs designed to provide homeowners with assistance in avoiding residential mortgage loan foreclosures.  In addition, certain mortgage lenders and servicers have voluntarily, or as part of settlements with law enforcement authorities, established loan modification programs relating to the residential mortgages they hold or service.  These programs may involve, among other things, the modification of mortgage loans to reduce the principal amount of the loans or the rate of interest payable on the loans, or to extend the payment terms of the loans.  In addition, members of the U.S. Congress have indicated support for additional legislative relief for homeowners, including a proposed amendment of the bankruptcy laws to permit the modification of mortgage loans in bankruptcy proceedings.  These loan modification programs, as well as future law enforcement and legislative or regulatory actions, may adversely affect the performance and market value of your securities.

Numerous laws, regulations and rules related to the servicing of mortgage loans, including efforts to delay or suspend foreclosure actions for a specified period have been proposed recently by federal, state and local governmental authorities.  A number of these laws have been enacted, including in California.  These laws, regulations and rules will result in delays in the foreclosure process, and may lead to reduced payments by borrowers and/or increased reimbursable servicing expenses.

Environmental Risks

Real property pledged as security to a lender may be subject to environmental risks.  Such risks, among other things, could substantially impair a borrower’s ability to repay a loan, result in substantial diminution in the value of the property pledged as collateral to secure the loan and/or give rise to liability which could exceed the value of such property or the principal balance of the related loan.

Under the laws of certain states, contamination of a property may give rise to a lien on the property to assure the payment of the costs of clean up.  In several states this type of lien has priority over the lien of an existing mortgage against the related property.  In addition, under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), the United States Environmental Protection Agency (“EPA”) may impose a lien on property where the EPA has incurred clean-up costs.  However, a CERCLA lien is subordinate to pre-existing, perfected security interests.

Under the laws of some states, and under CERCLA, it is conceivable that a secured lender may be held liable as an owner or operator for the costs of addressing releases or threatened releases of hazardous substances at a mortgaged property and related costs, even though the environmental damage or threat was caused by a prior or current owner or operator or another third party.  CERCLA imposes liability for these costs on any and all responsible parties, including owners or operators.  However, CERCLA excludes from the definition of “owner or operator” a secured creditor who, without participating in the management of a facility or property, holds indicia of ownership primarily to protect its security interest (the “secured creditor exclusion”).  Thus, if a lender’s activities begin to encroach on the actual management of a contaminated facility or property, the lender may incur liability as an owner or operator under CERCLA.  Similarly, if a lender forecloses and takes title to a contaminated facility or property, the lender may incur CERCLA liability in various circumstances, including, but not limited to, when it holds the facility or property as an investment (including leasing the facility or property to a third party), or fails to market the property in a timely fashion.

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If a lender is or becomes liable, it may be entitled to bring an action for contribution against any other responsible parties, including a previous owner or operator, who created the environmental hazard, but those persons or entities may be bankrupt or otherwise judgment-proof.  The costs associated with environmental cleanup and the diminution in value of contaminated property and related liabilities or losses may be substantial.  It is conceivable that the costs arising from the circumstances set forth above would result in a loss to securityholders.

CERCLA does not apply to petroleum products, and the secured creditor exclusion does not govern liability for cleanup costs under federal laws other than CERCLA, in particular Subtitle 1 of the federal Resource Conservation and Recovery Act (“RCRA”), which regulates underground petroleum storage tanks (except heating oil tanks).  The EPA has adopted a lender liability rule for underground storage tanks under Subtitle I of RCRA.  Under that rule, a holder of a security interest in an underground storage tank or real property containing an underground storage tank is not considered an operator of the underground storage tank as long as the holder does not exercise decision-making control over the borrower’s enterprise, participate in the management or control of decision-making relating to the operation of a tank, as long as petroleum is not added to, stored in or dispensed from the tank, or as long as holder does not deviate from certain other requirements specified in the rule.  In addition, under the Asset Conservation, Lender Liability and Deposit Insurance Protection Act of 1996, similar protections to those accorded to lenders under CERCLA are also accorded to holders of security interests in underground tanks.  It should be noted, however, that liability for cleanup of contamination may be governed by state law, which may not provide for any specific protection for secured creditors.

Whether actions taken by a lender would constitute participation in the management of a mortgaged property, or the business of a borrower, so as to render the secured creditor exemption unavailable to a lender has been a matter of judicial interpretation of the statutory language, and court decisions have been inconsistent.  In 1990, the Court of Appeals for the Eleventh Circuit suggested that the mere capacity of the lender to influence a borrower’s decisions regarding disposal of hazardous substances was sufficient participation in the management of the borrower’s business to deny the protection of the secured creditor exemption to the lender, regardless of whether lender actually exercised such influence.

This ambiguity appears to have been resolved by the enactment of the Asset Conservation, Lender Liability and Deposit Insurance Protection Act of 1996.  The legislation provides that in order to be deemed to have participated in the management of a mortgaged property, a lender must actually participate in the operational affairs of the property or the borrower.  The legislation also provides that participation in the management of the property does not include “merely having the capacity to influence, or unexercised right to control” operations.  Rather, a lender will lose the protection of the secured creditor exclusion only if it exercises decision-making control over the borrower’s environmental compliance and hazardous substance handling and disposal practices, or assumes day-to-day management of all operational functions of the secured property.  As noted above, the secured creditor exclusion does not govern liability for cleanup costs except under the federal laws discussed above.  In addition, certain other environmental conditions may be required to be addressed under other federal, state or local laws or in order to improve the marketability of a property.  Therefore, under certain circumstances, including but not limited to after foreclosure, a lender may incur costs under applicable laws or in order to improve the marketability of a property in connection with environmental conditions associated with that property, such as the presence or release of regulated materials in underground storage tanks, asbestos-containing material, lead paint or radon gas.  If a lender is or becomes liable, it can bring an action for contribution against any other “responsible parties” including a previous owner or operator, who created the environmental hazard, but those persons or entities may be bankrupt or otherwise judgment-proof.  It is conceivable that, the costs arising from such circumstances would result in a loss to securityholders.

Except as otherwise specified in the prospectus supplement, at the time the loans were originated, no environmental assessments or very limited environmental assessments of the properties were conducted.

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Rights of Redemption

In some states, after sale pursuant to a deed of trust or foreclosure of a mortgage, the borrower and foreclosed junior lienors are given a statutory period in which to redeem the property from the foreclosure sale.  In certain other states, including California, this right of redemption applies only to sales following judicial foreclosure, and not to sales pursuant to a non-judicial power of sale.  In most states where the right of redemption is available, statutory redemption may occur upon payment of the foreclosure purchase price, accrued interest and taxes.  In other states, redemption may be authorized if the former borrower pays only a portion of the sums due.  The effect of a statutory right of redemption is to diminish the ability of the lender to sell the foreclosed property.  The exercise of a right of redemption would defeat the title of any purchaser from the lender subsequent to foreclosure or sale under a deed of trust.  Consequently, the practical effect of the redemption right is to force the lender to retain the property and pay the expenses of ownership until the redemption period has run.  In some states, there is no right to redeem property after a trustee’s sale under a deed of trust.

Anti-Deficiency Legislation; Tax Liens

Certain states have imposed statutory and judicial restrictions that limit the remedies of a beneficiary under a deed of trust or a mortgagee under a mortgage.  In some states, including California, statutes and case law limit the right of the beneficiary or mortgagee to obtain a deficiency judgment against borrowers financing the purchase of their residence or following sale under a deed of trust or certain other foreclosure proceedings.  A deficiency judgment is a personal judgment against the borrower equal in most cases to the difference between the amount due to the lender and the fair market value of the real property at the time of the foreclosure sale, As a result of these prohibitions, it is anticipated that in most instances the servicer will utilize the non-judicial foreclosure remedy and will not seek deficiency judgments against defaulting borrowers.

Some state statutes require the beneficiary or mortgagee to exhaust the security afforded under a deed of trust or mortgage by foreclosure in an attempt to satisfy the full debt before bringing a personal action against the borrower.  In certain other states, the lender has the option of bringing a personal action against the borrower on the debt without first exhausting that security; however, in some of these states, the lender, following judgment on such personal action, may be deemed to have elected a remedy and may be precluded from exercising remedies with respect to the security.  Consequently, the practical effect of the election requirement, when applicable, is that lenders will usually proceed first against the security rather than bringing a personal action against the borrower.  In some states, exceptions to the anti-deficiency statutes are provided for in certain instances where the value of the lender’s security has been impaired by acts or omissions of the borrower, for example, in the event of waste of the property.  Finally, other statutory provisions limit any deficiency judgment against the former borrower following a foreclosure sale to the excess of the outstanding debt over the fair market value of the property at the time of the public sale.  The purpose of these statutes is generally to prevent a beneficiary or a mortgagee from obtaining a large deficiency judgment against the former borrower as a result of low or no bids at the foreclosure sale.

With respect to “additional collateral loans,” realization upon the additional collateral may be governed by the UCC in effect under the law of the state applicable thereto. The UCC prohibits or limits a deficiency award in some circumstances, including those in which the disposition of the additional collateral was not conducted in a commercially reasonable manner. In some states, the UCC does not apply to liens upon additional collateral consisting of some types of personal property (including, for example, bank accounts and, to a certain extent, insurance policies and annuities). Realization upon such additional collateral will be governed by state laws other than the UCC, and the availability of deficiency awards under such state laws may be limited. Whether realization upon any additional collateral is governed by the UCC or by other state laws, the ability of secured parties to realize upon the additional collateral may be limited by statutory prohibitions that limit remedies in respect of the related mortgage loans. Such limitations may affect secured parties either independently or in conjunction with statutory requirements that secured parties proceed against the related mortgaged properties first or against both such mortgaged properties and the additional collateral concurrently.

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The federal tax laws provide priority to certain tax liens over the lien of a mortgage or secured party.  Moreover, the laws of certain states also give priority to certain tax and mechanics liens over the lien of a mortgage.

Bankruptcy Laws

In addition to anti-deficiency and related legislation, numerous other federal and state statutory provisions, including the United States Bankruptcy Code, 11 U.S.C. Sections 101 et seq. (the “Bankruptcy Code”), and state laws affording relief to debtors (together with the Bankruptcy Code, the “Bankruptcy Laws”) may interfere with or affect the ability of a secured mortgage lender to obtain payment of a mortgage loan, to realize upon collateral and/or enforce a deficiency judgment.  For example, under the Bankruptcy Code, virtually all actions (including foreclosure actions and deficiency judgment proceedings) are automatically stayed upon the filing of a bankruptcy petition, and interest or principal payments may not be made during the course of the bankruptcy case.  Foreclosure of an interest in real property of a debtor in a case under the Bankruptcy Code can typically occur only if the bankruptcy court vacates the stay, an action the court may be reluctant to take, particularly if the debtor has the prospect of restructuring his or her debts and the mortgage collateral is not deteriorating in value.  The delay and the consequences of the delay caused by an automatic stay can be significant.  Also, under the Bankruptcy Code, the filing of a petition in bankruptcy by or on behalf of a junior lienor (a subordinate lender secured by a mortgage on the property) may stay a senior lender from taking action to foreclose.

A homeowner may file for relief under the Bankruptcy Code under any of four different chapters of the Bankruptcy Code.  Under Chapter 7, the assets of the debtor are liquidated and a lender secured by a lien may “credit bid” (i.e., bid up to the amount of the debt) at the sale of the asset.  See “—Foreclosure/Repossession.”  A homeowner may also file for relief under Chapter 11 of the Bankruptcy Code and reorganize his or her debts through his or her reorganization plan.  Alternatively, a homeowner may file for relief under Chapter 13 of the Bankruptcy Code and address his or her debts in a rehabilitation plan.  Certain individuals are eligible to file under Chapter 12.

The Bankruptcy Code permits a mortgage loan that is secured by property that does not consist solely of the debtor’s principal residence to be modified without the consent of the lender provided certain substantive and procedural safeguards are met.  In such cases, the lender’s security interest may be reduced to the then-current value of the property as determined by the court if the value is less than the amount due on the loan, thereby leaving the lender as a general unsecured creditor for the difference between the value  of the collateral and the outstanding balance of the mortgage loan.  A borrower’s unsecured indebtedness will typically be discharged in full upon payment of a substantially reduced amount.  Other modifications to a mortgage loan may include a reduction in the amount of each scheduled payment, which reduction may result from a reduction in the rate of interest, an alteration of the repayment schedule, an extension of the final maturity date, and/or a reduction in the outstanding balance of the secured portion of the loan.  In certain circumstances, subject to the court’s approval, a debtor in a case under Chapter 11 of the Bankruptcy Code may have the power to grant liens senior to the lien of a mortgage.

A reorganization plan under Chapter 11 and a rehabilitation plan under Chapter 13 of the Bankruptcy Code may each allow a debtor to cure a default relating to a mortgage loan on its residence by paying arrearages over a period of time and to deaccelerate and reinstate the original mortgage loan payment schedule, even though the lender accelerated the loan and a final judgment of foreclosure has been entered in state court (provided no sale of the property had yet occurred) prior to the filing of the debtor’s petition under the Bankruptcy Code.  Under a Chapter 13 plan, curing of defaults must be accomplished within the five-year maximum term permitted for repayment plans, the term commencing when repayment plan becomes effective, while defaults may be cured over a longer period of time under a Chapter 11 plan of reorganization.

Generally, a repayment plan in a case under Chapter 13 and a plan of reorganization under Chapter 11 may not modify the claim of a mortgage lender if the borrower elects to retain the property, the property is the borrower’s principal residence and the property is the lender’s only collateral.  However, there have been recent proposals in Congress that would extend the ability of bankruptcy judges to modify the terms of mortgage loans in those situations where modification is not currently permitted.  Modifications are permissible when the mortgage loan is secured both by the debtor’s principal residence and by other collateral, such as appliances or furniture.

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The general protection for mortgages secured only by the debtor’s principal residence is not applicable in a case under Chapter 13 if the last payment on the original payment schedule is due before the final date for payment under the debtor’s Chapter 13 plan (which date could be up to five years after the debtor emerges from bankruptcy).  

State statutes and general principles of equity may also provide a mortgagor with means to halt a foreclosure proceeding or sale and to force a restructuring of a mortgage loan on terms a lender would not otherwise accept.

In a bankruptcy or similar proceeding of a mortgagor, actions may be taken seeking the recovery, as a preferential transfer or on other grounds, of any payments made by the mortgagor under the related mortgage loan prior to the bankruptcy or similar proceeding.  Payments may be protected from recovery as preferences in bankruptcy cases if they are payments in the ordinary course of business made on debts incurred in the ordinary course of business or if the value of the collateral exceeds the debt at the time of payment.  Whether any particular payment would be protected depends upon the facts specific to a particular transaction.

A trustee in bankruptcy, in some cases, may be entitled to collect its costs and expenses in preserving or selling the mortgaged property ahead of a payment to the lender.  Under the Bankruptcy Code, if the court finds that actions of the mortgagee have been unreasonable and inequitable, the lien of the related mortgage may be subordinated to the claims of unsecured creditors.

A “deficient valuation” with respect to any mortgage loan is, generally, the excess of (a)(1) the then outstanding principal balance of the mortgage loan, plus (2) accrued and unpaid interest and expenses reimbursable under the terms of the related note to the date of the bankruptcy petition (collectively, the “outstanding balance”), over (b) a valuation by a court of competent jurisdiction of the mortgaged property which reduces the principal balance on such mortgage loan to an amount less than the outstanding balance of the mortgage loan, which valuation results from a proceeding initiated under the Bankruptcy Code.  As used in this prospectus, “deficient valuation” means, with respect to any mortgage loan, the deficient valuation described in the preceding sentence, without giving effect to clause (a)(2) thereof.  If the terms of a court order in respect of any retroactive deficient valuation provide for a reduction in the indebtedness of a mortgage loan, and the earlier maturity thereof, the term deficient valuation includes an additional amount equal to the excess, if any, of (a) the amount of principal that would have been due on such mortgage loan, for each month retroactively affected, based on the original payment terms and amortization schedule of such mortgage loan over (b) the amount of principal due on such mortgage loan, for each such retroactive month (assuming the effect of such retroactive application according to such mortgage loan’s revised amortization schedule).  A “debt service reduction” with respect to any mortgage loan, is, generally, a reduction in the scheduled monthly payment for such mortgage loan, by a court of competent jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction resulting from a deficient valuation.

Due-on-Sale Clauses

Each conventional loan generally will contain a due-on-sale clause which will generally provide that if the mortgagor or obligor sells, transfers or conveys the property, the loan or contract may be accelerated by the mortgagee or secured party.  Court decisions and legislative actions have placed substantial restrictions on the right of lenders to enforce these clauses in many states.  For instance, the California Supreme Court in August 1978 held that due-on-sale clauses were generally unenforceable.  However, the Garn-St. Germain Depository Institutions Act of 1982 (the “Garn-St. Germain Act”), subject to certain exceptions, preempts state constitutional, statutory and case law prohibiting the enforcement of due-on-sale clauses.  As a result, due-on-sale clauses are generally enforceable except in those states whose legislatures exercised their authority to regulate the enforceability of the clauses with respect to mortgage loans that were (a) originated or assumed during the “window period” under the Garn-St. Germain Act which ended in all cases not later than October 15, 1982, and (b) originated by lenders other than national banks, federal savings institutions and federal credit unions.  Freddie Mac has taken the position in its published mortgage servicing standards that, out of a total of eleven “window period states,” five states (Arizona, Michigan, Minnesota, New Mexico and Utah) have enacted statutes extending, on various terms and for varying periods, the prohibition on enforcement of due-on-sale clauses with respect to certain categories of window period loans.  Also, the Garn-St, Germain Act does “encourage” lenders to permit assumption of loans at the original rate of interest or at some other rate less than the average of the original rate and the market rate.

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As to loans secured by an owner-occupied residence, the Garn-St. Germain Act sets forth nine specific instances in which a mortgagee covered by the Garn-St. Germain Act may not exercise its rights under a due-on-sale clause, notwithstanding the fact that a transfer of the property may have occurred, The inability to enforce a due-on-sale clause may result in transfer of the related property to an uncreditworthy person, which could increase the likelihood of default or may result in a mortgage bearing an interest rate below the current market rate being assumed by a new home buyer, which may affect the average life of the loans and the number of loans which may extend to maturity.

In addition, under federal bankruptcy law, due-on-sale clauses may not be enforceable in bankruptcy proceedings and may, under certain circumstances, be eliminated in any modified mortgage resulting from such bankruptcy proceeding.

Prepayment Charges and Prepayments

Applicable regulations prohibit the imposition of a prepayment charge or equivalent fee for or in connection with the acceleration of a mortgage loan by exercise of a due-on-sale clause.  A mortgagee to whom a prepayment in full has been tendered will be compelled to give either a release of the mortgage or an instrument assigning the existing mortgage to a refinancing lender.

Some state laws restrict the imposition of prepayment charges even when the mortgage loans expressly provide for the collection of those charges.  The Alternative Mortgage Transaction Parity Act of 1982 (the “Parity Act”) permits the collection of prepayment charges in connection with some types of mortgage loans subject to the Parity Act, or Parity Act loans, preempting any contrary state law prohibitions.  However, some states may not recognize the preemptive authority of the Parity Act or have opted out of the Parity Act.   Moreover, the OTS, the agency that administered the application of the Parity Act to some types of mortgage lenders that are not chartered under federal law, withdrew its favorable regulations and opinions that previously authorized those lenders, notwithstanding contrary state law, to charge prepayment charges and late fees with respect to Parity Act loans originated on or after July 1, 2003.  Accordingly, it is possible that prepayment charges may not be collected on some mortgage loans that provide for the payment of these charges.  Any prepayment charges collected on mortgage loans may be available for distribution only to a specific class of securities or may not be available for distribution to any class of securities.  If so specified in the accompanying prospectus supplement, prepayment charges may be retained by the servicer or by sub-servicers as additional servicing compensation.

Please refer to the discussion under the heading “Financial Regulatory Legislative Reform and Related Regulations” below regarding federal regulation of prepayment charges.

Applicability of Usury Laws

Title V of the Depository Institutions Deregulation and Monetary Control Act of 1980, enacted in March 1980 (“Title V”) provides that state usury limitations shall not apply to certain types of residential first mortgage loans originated by certain lenders after March 31, 1980. The Office of Thrift Supervision, as successor to the Federal Home Loan Bank Board, is authorized to issue rules and regulations and to publish interpretations governing implementation of Title V. Title V authorized the states to reimpose interest rate limits by adopting, before April 1, 1983, a law or constitution provision which expressly rejects application of the federal law. Fifteen states adopted such a law prior to the April 1, 1983 deadline. In addition, even where Title V was not so rejected, any state is authorized by the law to adopt a provision limiting discount points or other charges on mortgage loans covered by Title V.

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Certain states have taken action to reimpose interest rate limits and/or to limit discount points or other charges.

Servicemembers Civil Relief Act

Generally, under the terms of the Servicemembers Civil Relief Act formerly known as the Soldiers’ and Sailors’ Relief Act of 1940, (the “Relief Act”), a borrower who enters military service after the origination of his or her loan (including a borrower who is a member of the National Guard or is in reserve status at the time of the origination of the loan and is later called to active duty) may not be charged interest above an annual rate of 6% during the period of his or her active duty status, unless a court orders otherwise upon application of the lender.  It is possible that this interest rate limitation could have an effect, for an indeterminate period of time, on the ability of the servicer to collect full amounts of interest on certain of the loans.  Unless otherwise provided in the prospectus supplement, any shortfall in interest collections resulting from the application of the Relief Act could result in losses to securityholders.  The Relief Act also imposes limitations which would impair the ability of the servicer to foreclose on an affected loan during the borrower’s period of active duty status.  Moreover, the Relief Act permits the extension of a loan’s maturity and the re-adjustment of its payment schedule beyond the completion of military service.  Thus, in the event that a loan that is affected by the Relief Act goes into default, there may be delays and losses occasioned by the inability to realize upon the property in a timely fashion.

Junior Mortgages; Rights of Senior Mortgagees

To the extent that the loans included in the assets of the issuing entity for a series are secured by mortgages which are junior to other mortgages held by other lenders or institutional investors, the rights of the issuing entity (and therefore the securityholders), as mortgagee under any such junior mortgage, are subordinate to those of any mortgagee under any senior mortgage.  The senior mortgagee has the right to receive hazard insurance and condemnation proceeds and to cause the property securing the loan to be sold upon default of the mortgagor, thereby extinguishing the junior mortgagee’s lien unless the junior mortgagee asserts its subordinate interest in the property in foreclosure litigation and, possibly, satisfies the defaulted senior mortgage.  A junior mortgagee may satisfy a defaulted senior loan in full and, in some states, may cure a default and bring the senior loan current, in either event adding the amounts expended to the balance due on the junior loan.  In most states, absent a provision in the mortgage or deed of trust, no notice of default is required to be given to a junior mortgagee.

The standard form of the mortgage used by most institutional lenders confers on the mortgagee the right both to receive all proceeds collected under any hazard insurance policy and all awards made in connection with condemnation proceedings, and to apply those proceeds and awards to any indebtedness secured by the mortgage, in whatever order the mortgagee may determine.  Thus, in the event improvements on the property are damaged or destroyed by fire or other casualty, or in the event the property is taken by condemnation, the mortgagee or beneficiary under a senior mortgage will have the prior right to collect any insurance proceeds payable under a hazard insurance policy and any award of damages in connection with the condemnation and to apply the same to the indebtedness secured by the senior mortgage.  Proceeds in excess of the amount of senior mortgage indebtedness, in most cases, may be applied to the indebtedness of a junior mortgage.

Another provision sometimes found in the form of the mortgage or deed of trust used by institutional lenders obligates the mortgagor to pay before delinquency all taxes and assessments on the property and, when due, all encumbrances, charges and liens on the property which appear prior to the mortgage or deed of trust, to provide and maintain fire insurance on the property, to maintain and repair the property and not to commit or permit any waste thereof, and to appear in and defend any action or proceeding purporting to affect the property or the rights of the mortgagee under the mortgage.  Upon a failure of the mortgagor to perform any of these obligations, the mortgagee is given the right under certain mortgages to perform the obligation itself, at its election, with the mortgagor reimbursing the mortgagee for any sums expended by the mortgagee on behalf of the mortgagor.  All sums so expended by the mortgagee become part of the indebtedness secured by the mortgage.

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Consumer Protection Laws

The Reigle Community Development and Regulatory Improvement Act of 1994 (the “Reigle Act”) incorporates the Home Ownership and Equity Protection Act of 1994, which adds certain additional provisions to Regulation Z, the implementing regulation of the Truth-in-Lending Act (“TILA”).  These provisions impose additional disclosure and other requirements on creditors with respect to high cost loans.  In general, mortgage loans within the purview of the Reigle Act have annual percentage rates over 8% greater than the yield on United States Treasury securities of comparable maturity and/or fees and points which exceed the greater of 8% of the total loan amount or $455.  The provisions of the Reigle Act apply on a mandatory basis to all mortgage loans originated on or after October 1, 1995.  These provisions can impose specific statutory liabilities upon creditors who fail to comply with their provisions and may affect the enforceability of the related loans.  In addition, any assignee of a creditor, including the issuing entity and the trustee, would generally be subject to all claims and defenses that the consumer could assert against the creditor, including, without limitation, the right to rescind the mortgage loan.

Mortgage loans are also subject to various other federal laws, including (1) 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; (2) the Americans with Disabilities Act, which, among other things, prohibits discrimination on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages or accommodations of any place of public accommodation; and (3) the Fair Credit Reporting Act, which regulates the use and reporting of information related to borrowers’ 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 and in addition could subject the issuing entity to damages.

State laws applicable to mortgage loans generally regulate interest rates and other charges and require certain disclosures to borrowers.  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 mortgage loans.  Depending upon the provisions of the applicable law and the specific facts and circumstances involved, violations of these laws, policies and principles may limit the ability of the servicer to collect all or part of the principal of or interest on the mortgage loans, may entitle borrowers to a refund of amounts previously paid and could subject the issuing entity to damages.

Financial Regulatory Legislative Reform and Related Regulations Could Have a Significant Impact

In response to the financial crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which President Obama signed into law on July 21, 2010. The Dodd-Frank Act requires the creation of new federal regulatory agencies, and grants additional authorities and responsibilities to existing regulatory agencies to identify and address emerging systemic risks posed by the activities of financial services firms. The Dodd-Frank Act also provides for enhanced regulation of derivatives and mortgage-backed securities offerings, restrictions on executive compensation and enhanced oversight of credit rating agencies. Additionally, the Dodd-Frank Act establishes the Bureau of Consumer Financial Protection (the “BCFP”) within the Federal Reserve System, a new consumer protection regulator tasked with regulating consumer financial services and products. The Dodd-Frank Act also limits the ability of federal laws to preempt state and local consumer laws.

The impact of the Dodd-Frank Act will depend significantly upon the content and implementation of the rules and regulations issued on its mandate. It is not yet clear how the Dodd-Frank Act and its associated rules and regulations will impact the mortgage-backed securities market and residential mortgage lending generally, and the issuing entity, investors in the securities offered thereby, the sponsor, the depositor, the servicers and their respective businesses and assets specifically. No assurance can be given that the new regulations will not have an adverse impact on these entities or the value of the securities offered thereby.

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The BCFP is charged with issuing regulations to implement amendments to the TILA made by the Dodd-Frank Act. These regulations will expand the existing “ability to pay” requirements under TILA, establish new minimum underwriting standards and impose new limits on prepayment penalties. To the extent the regulations ultimately adopted may impact investors in series of securities offered hereby, they will be described in the related prospectus supplement.

Forfeitures in Drug and RICO Proceedings

Federal law provides that property owned by persons convicted of drug-related crimes or of criminal violations of the Racketeer Influenced and Corrupt Organizations statute (“RICO”) may be seized by the government if the property was used in or purchased with the proceeds of these crimes.  Under procedures contained in the Comprehensive Crime Control Act of 1984, the government may seize the property even before conviction.  The government must publish notice of the forfeiture proceeding and may give notice to all parties “known to have an alleged interest in the property,” including the holders of mortgage loans.

A lender may avoid forfeiture of its interest in the property if it establishes that:  (1) its mortgage was executed and recorded before commission of the crime upon which the forfeiture is based or (2) the lender was at the time of execution of the mortgage “reasonably without cause to believe” that the property was used in or purchased with the proceeds of illegal drug or RICO activities.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

General

The following is a discussion of the material federal income tax consequences of the purchase, ownership and disposition of the securities. The following discussion is based on the advice of Chapman and Cutler LLP as to the anticipated material federal income tax consequences of the purchase, ownership and disposition of the securities offered hereunder. This discussion is directed solely to securityholders that hold the securities as capital assets within the meaning of Section 1221 of the Internal Revenue Code and does not purport to discuss all federal income tax consequences that may be applicable to particular individual circumstances, including those of banks, insurance companies, foreign investors, tax-exempt organizations, dealers in securities or currencies, mutual funds, real estate investment trusts, S corporations, estates and trusts, securityholders that hold the securities as part of a hedge, straddle, integrated or conversion transaction, or securityholders whose functional currency is not the United States dollar. Also, it does not address alternative minimum tax consequences or the indirect effects on the holders of equity interests in a securityholder.

For purposes of this tax discussion, references to a “securityholder” or a “holder” are to the beneficial owner of a security.

The following discussion is based in part upon the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations (including regulations promulgated under sections 860A through 860G of the Code, the “REMIC Regulations,” and those promulgated under sections 1271 through 1275 of the Code, the “OID Regulations”), rulings and decisions all as in effect as of the date of this prospectus. The OID Regulations, which are effective with respect to debt instruments issued on or after April 4, 1994, do not adequately address some issues relevant to, and in some instances provide that they are not applicable to, securities similar to the securities.

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In addition, the authorities on which this discussion, and the opinions referred to below, are based are subject to change or differing interpretations, which could apply retroactively. An opinion of counsel is not binding on the Internal Revenue Service (“IRS”) or the courts, and no rulings have been or will be sought from the IRS with respect to any of the federal income tax consequences discussed below, and no assurance can be given that the IRS will not take contrary positions. Taxpayers and preparers of tax returns, including those filed by any REMIC or other issuer, should be aware that under applicable Treasury regulations a provider of advice on specific issues of law is not considered an income tax return preparer unless the advice

· is given with respect to events that have occurred at the time the advice is rendered and is not given with respect to the consequences of contemplated actions; and

· is directly relevant to the determination of an entry on a tax return.

This summary and the opinions contained herein may not be able to be relied upon to avoid any income tax penalties that may be imposed with respect to the securities. Accordingly, taxpayers are encouraged to consult their tax advisors and tax return preparers regarding the preparation of any item on a tax return and the application of United States federal income tax laws, as well as the laws of any state, local or foreign taxing jurisdictions, to their particular situations, even where the anticipated tax treatment has been discussed in this prospectus or in a prospectus supplement. See “State and Other Tax Consequences” in this prospectus.

Types of Securities

This discussion addresses the following types of securities:

· REMIC securities (“REMIC Securities”); and

· securities issued by issuing entities for which a REMIC election is not made and which are treated as indebtedness of the issuer for federal income tax purposes (“Non-REMIC Debt Securities”.)

The prospectus supplement for each series of securities will indicate the applicable tax characterization for each security issued pursuant to that supplement.  Set forth below is a general description of each type of security and the anticipated material federal income tax consequences of investing in such security.  The discussions under “—Special Tax Attributes,” “— Withholding With Respect to Certain Foreign Investors, “ —Backup Withholding” and “—Tax Return Disclosure Requirements” below relate to all types of securities discussed herein.

Taxation of Debt Securities Generally

When we refer to a “Debt Security” or “Debt Securities” in the discussion that follows, we mean (1) REMIC securities that are “regular interest securities,” as defined below and (2) Non-REMIC Debt Securities.  This discussion is based in part on the rules governing original issue discount as set forth in Code sections 1271 through 1273, 1275 and 1281 through 1283, the regulations issued thereunder (the “OID Regulations”) and in part on the provisions of the Tax Reform Act of 1986 (the “1986 Act”).  Prospective investors should be aware, however, that the OID Regulations do not adequately address certain issues relevant to prepayable securities, such as the Debt Securities.  To the extent that those issues are not addressed in the OID Regulations, the trustee intends to apply the methodology described in the Conference Committee Report to the 1986 Act.  No assurance can be provided that the Internal Revenue Service (“IRS”) will not take a different position as to those matters not currently addressed by the OID Regulations.  Moreover, the OID Regulations include an anti-abuse rule allowing the IRS to apply or depart from the OID Regulations where necessary or appropriate to ensure a reasonable tax result because of the applicable statutory provisions.  A tax result will not be considered unreasonable under the anti-abuse rule in the absence of a substantial effect on the present value of a taxpayer’s tax liability.  Prospective investors are encouraged to consult their own tax advisors as to the discussion therein and the appropriate method for reporting interest and original issue discount (“OID”) with respect to Debt Securities.

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Original Issue Discount.  Some classes of Debt Securities offered in a series may be issued with OID.  Holders of any class of Debt Securities having OID must generally include OID in ordinary gross income for federal income tax purposes as it accrues, in accordance with the constant yield method, in advance of receipt of the cash attributable to such income.  When required by the Code and/or applicable regulations, the Issuer will indicate on the face of each Debt Security issued by it information concerning the application of the OID rules to such Debt Security and certain other information that may be required.  The Issuer will report annually to the IRS and to holders of record of such Debt Securities information with respect to the OID accruing on such Debt Securities during the reporting period.

In general, each Debt Security will be treated as a single installment obligation for purposes of determining the OID includible in a holder’s income. The amount of OID on such a Debt Security is the excess of the stated redemption price at maturity of the Debt Security over its issue price. The issue price of a Debt Security is the initial offering price to the public at which a substantial amount of the securities of that class are first sold to the public (excluding bond houses, brokers, underwriters or wholesalers), generally as set forth on the cover page of the prospectus supplement for a series of securities. If less than a substantial amount of a particular class of Debt Securities is sold for cash on or prior to the date of their initial issuance, the issue price for such class will likely be treated as equal to its fair market value on the closing date. The portion of the initial offering price which consists of payment for interest accrued on the Debt Securities prior to the closing date generally may, at the option of the initial holders, be subtracted from the issue price of the securities and treated as an offset to interest received on the first payment date.

The stated redemption price at maturity of a Debt Security is equal to the total of all payments to be made on the Debt Security other than “qualified stated interest payments.” “Qualified stated interest payments” are payments on the Debt Securities which are paid at least annually and are based on either a fixed rate or a “qualified variable rate.” Under the OID Regulations, interest is treated as payable at a “qualified variable rate” and not as contingent interest if, generally, (i) such interest is unconditionally payable at least annually, the issue price of the Debt Security does not exceed the total noncontingent principal payments and (ii) interest is based on a “qualified floating rate,” an “objective rate,” or a combination of “qualified floating rates” that do not operate in a manner that significantly accelerates or defers interest payments on such security.  Generally, the stated redemption price at maturity of a Debt Security (other than an “accrual security,” as described below) is its stated principal amount; the stated redemption price at maturity of an accrual security is the sum of all payments (regardless of how denominated) scheduled to be received on such accrual security under the Tax Prepayment Assumption (as defined below).  Any payment denominated as interest that does not constitute a qualified stated interest payment is generally referred to as a “contingent interest payment.” The related prospectus supplement will discuss whether the payments on a Debt Security denominated as interest are qualified stated interest payments and the treatment for federal income tax purposes of any contingent interest payments.

Notwithstanding the general definition of OID above, any OID with respect to a Debt Security will be considered to be zero if such discount is less than 0.25% of the stated redemption price at maturity of the Debt Security multiplied by its weighted average life (a “de minimis” amount). The weighted average life of a Debt Security for this purpose is the sum of the following amounts (computed for each payment included in the stated redemption price at maturity of the Debt Security): (i) the number of complete years (rounded down for partial years) from the closing date until the date on which each such payment is scheduled to be made under the Tax Prepayment Assumption, multiplied by (ii) a fraction, the numerator of which is the amount of the payment, and the denominator of which is the Debt Security’s stated redemption price at maturity. Holders of Debt Securities generally must report de minimis OID pro rata as principal payments are received, and such income will be capital gain if the Debt Security is held as a capital asset. However, accrual method holders may elect to accrue all interest on a Debt Security, including de minimis OID and market discount and as adjusted by any premium, under a constant yield method.

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The Code requires that the amount and rate of accrual of OID be calculated based on a reasonable assumed prepayment rate for the mortgage loans, the mortgage loans underlying any mortgaged-backed securities and/or other mortgage collateral securing the Debt Securities (the “Tax Prepayment Assumption”) and prescribes a method for adjusting the amount and rate of accrual of such discount if actual prepayment rates exceed the Tax Prepayment Assumption. However, if such mortgage loans prepay at a rate slower than the Tax Prepayment Assumption, no deduction for OID previously accrued, based on the Tax Prepayment Assumption, is allowed. The Tax Prepayment Assumption is required to be determined in the manner prescribed by regulations that have not yet been issued. It is anticipated that the regulations will require that the Tax Prepayment Assumption be the prepayment assumption that is used in determining the initial offering price of such securities. The related prospectus supplement for each series of securities will specify the Tax Prepayment Assumption determined by the Issuer for the purposes of determining the amount and rate of accrual of OID. No representation is made that the mortgage collateral will prepay at the Tax Prepayment Assumption or at any other rate.

Generally, a holder of a Debt Security must include in gross income the sum of the “daily portions,” as determined below, of the OID that accrues on a Debt Security for each day the holder owns the Debt Security, including the purchase date but excluding the disposition date.  In the case of an original holder of a Debt Security, a calculation will be made of the portion of the OID that accrues during each successive period (or shorter period from date of original issue) (an “accrual period”) that ends on the day in the calendar year corresponding to each of the payment dates on the Debt Securities (or the date prior to each such date).  This will be done, in the case of each full accrual period, by:

· adding (A) the present value at the end of the accrual period of all remaining payments to be received on the Debt Securities, computed taking into account (i) the yield to maturity of the Debt Security at the issue date, (ii) events (including actual prepayments) that have occurred prior to the end of the accrual period, and (iii) the Tax Prepayment Assumption, and (B) any payments received during such accrual period, other than payments of qualified stated interest: and

· subtracting from that total the “adjusted issue price” of the Debt Securities at the beginning of such accrual period.  The adjusted issue price of a Debt Security at the beginning of the initial accrual period is its issue price; the adjusted issue price of a Debt Security at the beginning of a subsequent accrual period is the adjusted issue price at the beginning of the immediately preceding accrual period plus the amount of OID allocable to such accrual period and reduced by the amount of any payment other than a payment of qualified stated interest made at the end of or during such accrual period.  The OID accrued during such accrual period will then be divided by the number of days in the period to determine the daily portion of OID for each day in the period.  With respect to an initial accrual period shorter than a full accrual period, the daily portions of OID must be determined according to any reasonable method, provided that such method is consistent with the method used to determine yield on the Debt Securities.

With respect to any Debt Security that is a variable rate debt instrument, the sum of the daily portions of OID that is includible in the holder’s gross income is determined under the same principles described above, with the following modifications: the yield to maturity on the Debt Securities should be calculated as if the interest index remained at its value as of the issue date of such Debt Securities.  Because the proper method of adjusting accruals of OID on a variable rate debt instrument as a result of prepayments is uncertain, holders of such instruments should consult their own tax advisors regarding the appropriate treatment of such Debt Securities for federal income tax purposes.

A subsequent purchaser of a Debt Security issued with OID who purchases the Debt Security at a cost less than the remaining stated redemption price at maturity, will also be required to include in gross income for all days during his or her taxable year on which such Debt Security is held, the sum of the daily portions of OID on the Debt Security.  In computing the daily portions of OID with respect to a Debt Security for such a subsequent purchaser, however, the daily portion for any day shall be reduced by the amount that would be the daily portion for such day (computed in accordance with the rules set forth above) multiplied by a fraction, the numerator of which is the amount, if any, by which the price paid by such holder for the Debt Security exceeds its adjusted issue price (the “acquisition premium”), and the denominator of which is the amount by which the remaining stated redemption price at maturity exceeds the adjusted issue price.

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Amortizable Bond Premium. A holder who purchases a Debt Security for an amount (net of accrued interest) greater than its stated redemption price at maturity generally will be considered to have purchased the Debt Security at a premium, which it may, under section 171 of the Code, elect to amortize as an offset to interest income on such Debt Security (and not as a separate deduction item) on a constant yield method. Although no regulations addressing the computation of premium accrual on securities similar to the Debt Securities have been issued, the relevant legislative history under section 171 of the Code indicates that premium is to be accrued in the same manner as market discount. Accordingly, it appears that the accrual of premium on a class of Debt Securities of a series will be calculated using the prepayment assumption used in pricing such class. If a holder makes an election under section 171 of the Code to amortize premium on a Debt Security, such election will apply to all taxable debt instruments (including pass-through certificates representing ownership interests in a trust holding debt obligations) held by the holder at the beginning of the taxable year in which the election is made, and to all taxable debt instruments acquired thereafter by such holder, and will be irrevocable without the consent of the IRS. Purchasers who pay a premium for the Debt Securities should consult their tax advisors regarding the election to amortize premium and the method to be employed.

Market Discount. The Debt Securities are subject to the market discount provisions of Code sections 1276 through 1278. These rules provide that if a subsequent holder of a Debt Security purchases it at a market discount, some or all of any principal payment or of any gain recognized upon the disposition of the Debt Security will be taxable as ordinary interest income. Market discount on a Debt Security means the excess, if any, of (1) the sum of its issue price and the aggregate amount of OID includible in the gross income of all holders of the Debt Security prior to the acquisition by the subsequent holder (presumably adjusted to reflect prior principal payments), over (2) the price paid by the holder for the Debt Security. Market discount on a Debt Security will be considered to be zero if such discount is less than .25% of the stated redemption price at maturity of such Debt Security multiplied by its weighted average life, which presumably would be calculated in a manner similar to weighted average life (described above), taking into account distributions (including prepayments) prior to the date of acquisition of such Debt Security by the subsequent purchaser. If market discount on a Debt Security is treated as zero under this rule, the actual amount of such discount must be allocated to the remaining principal distributions on such Debt Security and when each such distribution is made, gain equal to the discount allocated to such distribution will be recognized.

Any principal payment (whether a scheduled payment or a prepayment) or any gain on the disposition of a market discount Debt Security is to be treated as ordinary income to the extent that it does not exceed the accrued market discount at the time of such payment or disposition.  The amount of accrued market discount for purposes of determining the tax treatment of subsequent principal payments or dispositions of the Debt Securities is to be reduced by the amount so treated as ordinary income.

The 1986 Act grants authority to the U.S. Treasury to issue regulations providing for the computation of accrued market discount on debt instruments, the principal of which is payable in more than one installment.  Until such time as regulations are issued by the U.S. Treasury, certain rules described in the Conference Committee Report to the 1986 Act will apply.  Under those rules, the holder of a market discount Debt Security may elect to accrue market discount either on the basis of a constant interest rate or using one of the following methods.  For Debt Securities issued with OID, the amount of market discount that accrues during a period is equal to the product of (i) the total remaining market discount, multiplied by (ii) a fraction, the numerator of which is the OID accruing during the period and the denominator of which is the total remaining OID at the beginning of the period.  For Debt Securities issued without OID, the amount of market discount that accrues during a period is equal to the product of (i) the total remaining market discount, multiplied by (ii) a fraction, the numerator of which is the amount of stated interest paid during the accrual period and the denominator of which is the total amount of stated interest remaining to be paid at the beginning of the period.  For purposes of calculating market discount under any of the above methods in the case of instruments (such as the Debt Securities) that provide for payments that may be accelerated by reason of prepayments of other obligations securing such instruments, the same prepayment assumption applicable to calculating the accrual of OID shall apply.  Regulations are to provide similar rules for computing the accrual of amortizable bond premium on instruments payable in more than one principal installment.  As an alternative to the inclusion of market discount in income on the foregoing basis, the holder may elect to include such market discount in income currently as it accrues on all market discount instruments acquired by such holder in that taxable year or thereafter.  In addition, accrual method holders may elect to accrue all interest on a Debt Security, including de minimis OID and market discount and as adjusted by any premium, under a constant yield method.

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A subsequent holder of a Debt Security who acquired the Debt Security at a market discount also may be required to defer, until the maturity date of the Debt Security or the earlier disposition of the Debt Security in a taxable transaction, the deduction of a portion of the amount of interest that the holder paid or accrued during the taxable year on indebtedness incurred or maintained to purchase or carry the Debt Security in excess of the aggregate amount of interest (including OID) includible in his or her gross income for the taxable year with respect to such Debt Security.  The amount of such net interest expense deferred in a taxable year may not exceed the amount of market discount accrued on the Debt Security for the days during the taxable year on which the subsequent holder held the Debt Security, and the amount of such deferred deduction to be taken into account in the taxable year in which the Debt Security is disposed of in a transaction in which gain or loss is not recognized in whole or in part is limited to the amount of gain recognized on the disposition.  This deferral rule does not apply to a holder that elects to include market discount in income currently as it accrues on all market discount instruments acquired by such holder in that taxable year or thereafter.

Because the regulations described above with respect to market discounts and bond premiums have not been issued, it is impossible to predict what effect those regulations might have on the tax treatment of a Debt Security purchased at a discount or premium in the secondary market.

Election to Treat All Interest as Original Issue Discount.  The OID Regulations permit a holder of a Debt Security to elect to accrue all interest, discount (including de minimis market discount or OID) and bond premium in income as interest, based on a constant yield method for Debt Securities acquired on or after April 4, 1994.  If such an election were to be made with respect to a Debt Security with market discount, the holder of the Debt Security would be deemed to have made an election to include in income currently market discount with respect to all other debt instruments having market discount that such holder of the Debt Securities acquires during the year of the election or thereafter.  Similarly, a holder of a Debt Security that makes this election for a Debt Security that is acquired at a premium will be deemed to have made an election to amortize bond premium with respect to all debt instruments having amortizable bond premium that such holder owns or acquires.  The election to accrue interest or discount and the election to amortize bond premium on a constant yield method with respect to a security are each irrevocable without IRS consent.

Effects of Defaults and Delinquencies. Certain series of Debt Securities may contain one or more classes of subordinated Debt Securities, and in the event there are defaults or delinquencies on the mortgage assets, amounts that would otherwise be distributed on the subordinated Debt Securities may instead be distributed on the senior Debt Securities. Holders of subordinated Debt Securities nevertheless will be required to report income with respect to such subordinated Debt Securities under an accrual method without giving effect to delays and reductions in distributions on such subordinated Debt Securities attributable to defaults and delinquencies on the mortgage assets, except to the extent that it can be established that such amounts are uncollectible. As a result, the amount of income reported by a subordinated holder of a Debt Security in any period could significantly exceed the amount of cash distributed to such holder in that period. The holder will eventually be allowed a loss (or will be allowed to report a lesser amount of income) to the extent that the aggregate amount of distributions on the subordinated Debt Security is reduced as a result of defaults and delinquencies on the mortgage assets.

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Treatment of Losses.  Holders of Debt Securities using the accrual method of accounting, will be required to report income with respect to such Debt Securities on the accrual method without giving effect to delays and reductions in distributions attributable to defaults or delinquencies on any of the issuing entity’s assets, except possibly, in the case of income that under the Code constitutes “qualified stated interest,” to the extent that it can be established that such amounts are uncollectible.  In addition, potential investors are cautioned that while they may generally cease to accrue interest income if it reasonably appears that the interest will be uncollectible, the IRS may take the position that OID must continue to be accrued in spite of its uncollectibility until the security is disposed of in a taxable transaction or becomes worthless in accordance with the rules under section 166 of the Code.  As a result, the amount of income required to be reported by a holder in any period could exceed the amount of cash distributed to such holder in that period.

Although not entirely clear, it appears that (i) holders of Debt Securities that are corporations should in general be allowed to deduct as an ordinary loss any loss sustained during the taxable year on account of any such Debt Securities becoming wholly or partially worthless and (ii) holders of Debt Securities that are not corporations generally should be allowed to deduct as a short-term capital loss any loss sustained during the taxable year on account of any such Debt Securities becoming wholly worthless.  Although the matter is not entirely clear, non-corporate holders of Debt Securities may be allowed a bad debt deduction at such time that the principal balance of any such Debt Security is reduced to reflect realized losses resulting from any liquidated mortgage assets.  The IRS, however, could take the position that non-corporate holders will be allowed a bad debt deduction to reflect realized losses only after all mortgage assets remaining in the related issuing entity have been liquidated or the Debt Securities of the related series have been otherwise retired.  Potential investors and holders of the Debt Securities are urged to consult their own tax advisors regarding the appropriate timing, amount and character of any loss sustained with respect to such Debt Securities, including any loss resulting from the failure to recover previously accrued interest or discount income.  Special loss rules are applicable to banks and thrift institutions, including rules regarding reserves for bad debts.  Such taxpayers are advised to consult their tax advisors regarding the treatment of losses on Debt Securities.

REMIC Securities

With respect to each series of REMIC securities, Chapman and Cutler LLP will deliver an opinion generally to the effect that, under existing law, assuming timely filing of a REMIC election and ongoing compliance with all provisions of the related Agreements, all or a portion of the trust estate securing such series of securities will qualify as one or more “real estate mortgage investment conduits” (“REMIC”) within the meaning of section 860D of the Code.

The securities in such series will be designated either as one or more “regular interests” in a REMIC, which generally are treated as debt for federal income tax purposes, or the sole class of “residual interest” in a REMIC, which generally is not treated as debt for such purposes but rather as representing rights and responsibilities with respect to the taxable income or loss of the related REMIC.  The prospectus supplement for such series will indicate which classes of securities are being designated as regular interests (“regular interest securities”) and which class is being designated as the residual interest (“residual interest securities”).

For certain series of securities, multiple separate elections may be made to treat designated portions of the related trust estate as REMICs (referred to as the “Upper Tier REMIC” and the “Lower Tier REMIC(s),” respectively) for federal income tax purposes.  Upon the issuance of any such series of securities, Chapman and Cutler LLP will deliver its opinion generally to the effect that, under existing law, assuming timely filing of applicable REMIC elections and ongoing compliance with all provisions of the related Agreements, the Upper Tier REMIC and each Lower Tier REMIC will each qualify as a REMIC for federal income tax purposes.  In certain cases, a single residual interest security may represent the residual interest in both the Upper Tier REMIC and each Lower Tier REMIC.  In such case, the discussion of residual interest securities set forth below should be interpreted as applying to each residual interest separately.

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Taxation of Regular Interest Securities

Treatment of REMIC Regular Interests Generally.  Except as otherwise stated in this discussion, regular interest securities will be treated for federal income tax purposes as debt instruments issued by the REMIC and not as ownership interests in the REMIC or its assets.  Holders of regular interest securities that otherwise report income under a cash method of accounting will be required to report income with respect to regular interest securities under an accrual method.

To the extent provided in the applicable prospectus supplement, a regular interest security may represent not only the ownership of a REMIC regular interest but also an interest in a notional principal contract.  This can occur, for instance, if the applicable pooling and servicing agreement provides that the rate of interest payable by the REMIC on the regular interest is subject to a cap based on the weighted average of the net interest rates payable on the qualified mortgages held by the REMIC.  In these instances, the pooling and servicing agreement may provide for a reserve fund that will be held as part of the issuing entity but not as an asset of any REMIC created pursuant to the pooling and servicing agreement (an “outside reserve fund”).  The outside reserve fund typically would be funded from monthly excess cashflow.  If the interest payments on a regular interest were limited due to the above-described cap, payments of any interest shortfall due to application of that cap would be made to the regular interest holder to the extent of funds on deposit in the outside reserve fund.  For federal income tax purposes, payments from the outside reserve fund will be treated as payments under a notional principal contract written by the owner of the outside reserve fund in favor of the regular interest holders.

Interest Income.  Although unclear at present, the depositor intends to treat interest on a regular interest security that is a weighted average of the net interest rates on mortgage loans as qualified stated interest.  In such case, the weighted average rate used to compute the initial pass-through rate on the regular interest securities will be deemed to be the index in effect through the life of the regular interest securities.  It is possible, however, that the IRS may treat some or all of the interest on regular interest securities with a weighted average rate as taxable under the rules relating to obligations providing for contingent payments.  Such treatment may affect the timing of income accruals on such regular interest securities.

Original Issue Discount.  Certain classes of regular interest securities may be issued with OID.  The rules governing OID with respect to a regular interest security are described above under “Taxation of Debt Securities Generally —Original Issue Discount.” In view of the complexities and current uncertainties as to the manner of inclusion in income of OID on regular interest securities, each investor should consult his own tax advisor to determine the appropriate amount and method of inclusion in income of OID on such regular interest security for federal income tax purposes.

Amortizable Bond Premium. The rules governing “premium” apply equally to regular interest securities (see above “Taxation of Debt Securities Generally—Amortizable Bond Premium”).

Market Discount.  A subsequent purchaser of a regular interest security may also be subject to the market discount provisions of Code sections 1276 through 1278.  These rules are described above under “Taxation of Debt Securities Generally—Market Discount.”

Sale or Exchange.  If a regular interest security is sold, exchanged, redeemed or retired, the holder will recognize gain or loss equal to the difference, if any, between the amount realized on such disposition and the adjusted basis in the regular interest security.  Similarly, a holder who receives a payment denominated as principal with respect to a regular interest security will recognize gain equal to the excess, if any, of the amount of such payment over his adjusted basis in the regular interest security.  A holder that receives a final payment that is less than the holder’s adjusted basis in a regular interest security will generally recognize a loss.  The adjusted basis of a regular interest security generally will equal the cost of the regular interest security to the holder, increased by any OID or market discount previously included in the holder’s gross income with respect to the regular interest security, and reduced by payments (other than payments of qualified stated interest) previously received by the holder on the regular interest security and by any amortized premium.

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Except as noted above with respect to market discount and except as noted below, any such gain or loss on a regular interest security generally will be capital gain or loss.  Such gain or loss will be long-term gain or loss if the regular interest security is held as a capital asset for more than one year.  Long-term capital gains of non-corporate taxpayers are subject to reduced maximum rates while short-term capital gains are taxable at ordinary rates.  The use of capital losses is subject to limitations.

If the holder of a regular interest security is a bank, a mutual savings bank, a thrift institution, or a similar institution described in section 582 of the Code, any gain or loss on the sale or exchange of the regular interest security will be treated as ordinary income or loss.

In the case of other types of holders, gain from the disposition of a regular interest security that otherwise would be capital gain will be treated as ordinary income to the extent that the amount actually includible in income with respect to the regular interest security by the holder during his holding period is less than the amount that would have been includible in income if the yield on that regular interest security during the holding period had been 110% of a specified U.S. Treasury borrowing rate as of the date that the holder acquired the regular interest security.  

Taxation of Holders of Residual Interest Securities

The REMIC will not be subject to federal income tax except with respect to income from prohibited transactions and certain other transactions.  See “—Prohibited Transactions and Contributions Tax” below.  Instead, the original holder of a security representing a residual interest (a “residual interest security”) will report on its federal income tax return, as ordinary income, the “daily portion” of the taxable income or net loss of the REMIC for each day during the taxable year on which such holder held the residual interest security.  The daily portion is determined by allocating to each day in any calendar quarter its ratable portion of the taxable income or net loss of the REMIC for such quarter, and by allocating that amount among the holders (on such day) of the residual interest securities in proportion to their respective holdings on such day.

The taxable income of the REMIC will be determined under an accrual method and will be taxable to the holders of residual interest securities without regard to the timing or amounts of cash distributions by the REMIC.  Ordinary income derived from residual interest securities will be “portfolio income” for purposes of the taxation of taxpayers subject to the limitations on the deductibility of “passive losses.” As residual interests, the residual interest securities will be subject to tax rules, described below, that differ from those that would apply if the residual interest securities were treated for federal income tax purposes as direct ownership interests in the mortgage assets or as debt instruments issued by the REMIC.

The holder of a residual interest security may be required to include taxable income from the residual interest security in excess of the cash distributed.  The reporting of taxable income without corresponding distributions could occur, for example, in certain REMIC issues in which the loans held by the REMIC were issued or acquired at a discount, since mortgage prepayments cause recognition of discount income, while the corresponding portion of the prepayment could be used in whole or in part to make principal payments on REMIC Regular Interests issued without any discount or at an insubstantial discount (if this occurs, it is likely that cash distributions will exceed taxable income in later years).  Taxable income may also be greater in earlier years of certain REMIC issues as a result of the fact that interest expense deductions, as a percentage of outstanding principal on REMIC regular interest securities, will typically increase over time as lower yielding securities are paid, whereas interest income with respect to loans will generally remain constant over time as a percentage of loan principal.

In any event, because the holder of a residual interest security is taxed on the net income of the REMIC, the taxable income derived from a residual interest security in a given taxable year will not be equal to the taxable income associated with investment in a corporate security or stripped instrument having similar cash flow characteristics and pretax yield. Therefore, the after-tax yield on the residual interest security may be less than that of such a security or instrument.

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A subsequent residual interest securityholder also will report on its federal income tax return amounts representing a daily share of the taxable income of the REMIC for each day that such residual interest securityholder owns such residual interest security.  Those daily amounts generally would equal the amounts that would have been reported for the same days by an original residual interest securityholder, as described above.  The legislative history to the Code provisions governing this matter indicates that certain adjustments may be appropriate to reduce (or increase) the income of a subsequent holder of a residual interest security that purchased such residual interest security at a price greater than (or less than) the adjusted basis such residual interest security would have in the hands of an original residual interest securityholder.  See “—Sale or Exchange” below.  It is not clear, however, whether such adjustments will in fact be permitted or required and, if so, how they would be made.  The REMIC Regulations do not provide for any such adjustments.

Limitation on Losses. The REMIC will have a net loss for any calendar quarter in which its deductions exceed its gross income.  The amount of the REMIC’s net loss that a holder may take into account currently is limited to the holder’s adjusted basis at the end of the calendar quarter in which such loss arises.  A holder’s basis in a residual interest security will initially equal such holder’s purchase price, and will subsequently be increased by the amount of the REMIC’s taxable income allocated to the holder, and decreased (but not below zero) by the amount of distributions made and the amount of the REMIC’s net loss allocated to the holder.  Any disallowed loss may be carried forward indefinitely, but may be used only to offset income of the REMIC generated by the same REMIC.  The ability of holders of residual interest securities to deduct net losses may be subject to additional limitations under the Code, as to which such holders should consult their tax advisors.

Distributions.  Distributions on a residual interest security (whether at their scheduled times or as a result of prepayments) will generally not result in any additional taxable income or loss to a holder of a residual interest security.  If the amount of such payment exceeds a holder’s adjusted basis in the residual interest security, however, the holder will recognize gain (treated as gain from the sale of the residual interest security) to the extent of such excess.

Excess Inclusions.  The excess inclusion portion of a REMIC’s income is generally equal to the excess, if any, of (a) REMIC taxable income for the quarterly period allocable to a residual interest security, over (b) the daily accruals for such quarterly period.  For this purpose, daily accruals are determined by allocating to each day in the calendar quarter its ratable portion of the “adjusted issue price” of the residual interest security at the beginning of such quarterly period and 120% of the long term applicable federal rate in effect on the date the residual interest security is issued.  The adjusted issue price of a residual interest at the beginning of each calendar quarter will equal its issue price (calculated in a manner analogous to the determination of the issue price of a regular interest security), increased by the aggregate of the daily accruals for prior calendar quarters, and decreased (but not below zero) by the amount of loss allocated to a holder and the amount of distributions made on the residual interest security before the beginning of the quarter.  The long-term federal rate, which is announced monthly by the U.S. Treasury, is an interest rate that is based on the average market yield of outstanding marketable obligations of the United States government having remaining maturities in excess of nine years.

The portion of the REMIC taxable income of a holder of a residual interest security consisting of “excess inclusion” income will be subject to federal income tax in all events and may not be (i) offset by unrelated deductions or losses, including net operating losses, on such holder’s federal income tax return or (ii) counted as income for purposes of measuring certain income based thresholds or limitations on the claiming of certain deductions (such as the charitable contributions deduction).  Further, if the holder of a residual interest security is an organization subject to the tax on unrelated business income imposed by Code section 511, such holder’s excess inclusion income will be treated as unrelated business taxable income of such holder.  If a residual interest security is owned by a foreign person, excess inclusion income is subject to U.S. withholding tax which may not be reduced by treaty, is not eligible for treatment as “portfolio interest” and is subject to certain additional limitations.  The Small Business Job Protection Act of 1996 (the “SBJPA of 1996”) has eliminated the special rule permitting section 593 institutions (“thrift institutions”) to use net operating losses and other allowable deductions to offset their excess inclusion income from REMIC residual securities that have “significant value” within the meaning of the REMIC Regulations, effective for taxable years beginning after December 31, 1995, except with respect to residual securities continuously held by a thrift institution since November 1, 1995.

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In the case of any residual interest securities held by a REIT, the Code provides that under regulations to be issued the aggregate excess inclusions with respect to such residual interest securities, reduced (but not below zero) by the REIT taxable income (within the meaning of Code Section 857(b)(2), excluding any net capital gain), will be allocated among the shareholders of such trust in proportion to the dividends received by such shareholders from such trust, and any amount so allocated will be treated as an excess inclusion with respect to a residual interest security as if held directly by such shareholder.  Regulated investment companies, common trust funds and certain cooperatives are subject to similar rules.  No such regulations have been issued to date and it is unclear how this provision would be applied in practice.

In addition, the SBJPA of 1996 provides three rules for determining the effect of excess inclusions on the alternative minimum taxable income of a residual holder.  First, alternative minimum taxable income for such residual holder is determined without regard to the special rule that taxable income cannot be less than excess inclusions.  Second, a residual holder’s alternative minimum taxable income for a tax year cannot be less than excess inclusions for the year.  Third, the amount of any alternative minimum tax net operating loss deductions must be computed without regard to any excess inclusions.

Sale or Exchange. A holder of a residual interest security will recognize gain or loss on the sale or exchange of a residual interest security equal to the difference, if any, between the amount realized and such holder’s adjusted basis in the residual interest security at the time of such sale or exchange.  In general, any such gain or loss will be capital gain or loss provided the residual interest security is held as a capital asset.  However, residual interest securities will be “evidences of indebtedness” within the meaning of Code Section 582(c)(l), so that gain or loss recognized from sale of a residual interest security by a bank or thrift institution to which such section applies would be ordinary income or loss.  Any loss upon disposition of a residual interest security may be disallowed if, within six months before or after the disposition of the residual interest security, the selling holder acquires any residual interest in a REMIC or any interest in a “taxable mortgage pool” (as defined in Section 7701(i) of the Code) which is comparable to a residual interest in a REMIC.  In that event, any loss will increase such regular interest securityholder’s adjusted basis in the newly acquired interest.

Disqualified Organizations.  As a condition to qualification as a REMIC, reasonable arrangements must be made to prevent the ownership of a residual interest security by any “disqualified organization.” Disqualified organizations include the United States, any State or political subdivision thereof, any foreign government, any international organization, or any agency or instrumentality of any of the foregoing, a rural electric or telephone cooperative described in section 1381(a)(2)(C) of the Code, or any entity exempt from the tax imposed by sections 1 through 1399 of the Code, if such entity is not subject to tax on its unrelated business income.  Accordingly, the applicable pooling and servicing agreement will prohibit disqualified organizations from owning a residual interest security.  In addition, no transfer of a residual interest security will be permitted unless the proposed transferee shall have furnished to the trustee an affidavit representing and warranting that it is neither a disqualified organization nor an agent or nominee acting on behalf of a disqualified organization.

If a residual interest security is transferred to a disqualified organization (in violation of the restrictions set forth above), a substantial tax will be imposed on the transferor of such residual interest security at the time of the transfer.  In addition, if a disqualified organization holds an interest in a pass-through entity (including, among others, a partnership, trust, REIT, regulated investment company, or any person holding as nominee), that owns a residual interest security, the pass-through entity will be required to pay an annual tax on its allocable share of the excess inclusion income of the REMIC.  The pass-through entity otherwise liable for the tax, for any period during which the disqualified organization is the record holder of an interest in such entity, will be relieved of liability for the tax if such record holder furnishes to such entity an affidavit that such record holder is not a disqualified organization and, for such period, the pass-through entity does not have actual knowledge that the affidavit is false.  Except as may be provided in Treasury regulations not yet issued, any person holding an interest in a pass-through entity as a nominee for another will, with respect to such interest, be treated as a pass-through entity.  Under the Taxpayer Relief Act of 1997, large partnerships (generally with 250 or more partners) will be taxable on excess inclusion income as if all partners were disqualified organizations.

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Transfers of Noneconomic Residual Interests. Under the REMIC Regulations, if a residual interest security is a “noneconomic residual interest,” as described below, such transfer of a residual interest security to a United States person will be disregarded for all Federal tax purposes unless no significant purpose of the transfer was to impede the assessment or collection of tax. A residual interest security is a “noneconomic residual interest” unless at the time of the transfer (i) the present value of the expected future distributions on the residual interest security at least equals the product of the present value of the anticipated excess inclusions and the highest rate of tax for the year in which the transfer occurs, and (ii) the transferor reasonably expects that the transferee will receive distributions from the REMIC at or after the time at which the taxes accrue on the anticipated excess inclusions in an amount sufficient to satisfy the accrued taxes. A significant purpose to impede the assessment or collection of tax exists if the transferor, at the time of the transfer, either knew or should have known that the transferee would be unwilling or unable to pay taxes due on its share of the taxable income of the REMIC. Under final regulations issued by the Treasury Department on July 19, 2002, a transferor is presumed not to have such knowledge if (i) the transferor conducted a reasonable investigation of the financial condition of the transferee, (ii) the transferee acknowledges to the transferor that the residual interest security may generate tax liabilities in excess of the cash flow and the transferee represents that it intends to pay such taxes associated with the residual interest security as they become due, (iii) the transferee represents that it will not cause income from the residual interest security to be attributable to a foreign permanent establishment or fixed base of the transferee or another U.S. taxpayer and (iv) the transfer satisfies either an “asset test” or “formula test.” The “asset test” requires that the transfer be to certain domestic taxable corporations with large amounts of gross and net assets where an agreement is made that all future transfers will be to taxable domestic corporations in transactions that qualify for the aforementioned “safe harbor.” The asset test is not satisfied if the facts and circumstances known to the transferor reasonably indicate that the taxes associated with the residual interest security will not be paid. Meanwhile, the “formula test” requires that the present value of the anticipated tax liabilities associated with holding the residual interest does not exceed the sum of (i) the present value of any consideration given to the transferee to acquire the interest, (ii) the present value of the expected future distributions on the interest, and (iii) the present value of any anticipated tax savings associated with holding the interest as the REMIC generates losses. If a transfer of a “noneconomic residual security” is disregarded, the transferor would continue to be treated as the owner of the residual interest security and would continue to be subject to tax on its allocable portion of the net income of the REMIC.

Foreign Investors. The REMIC Regulations provide that the transfer of a residual interest security that has a “tax avoidance potential” to a “foreign person” will be disregarded for federal income tax purposes.  This rule appears to apply to a transferee who is not a U.S. Person unless such transferee’s income in respect of the residual interest security is effectively connected with the conduct of a United Sates trade or business.  A residual interest security is deemed to have a tax avoidance potential unless, at the time of transfer, the transferor reasonably expect that the REMIC will distribute to the transferee amounts that will equal at least 30 percent of each excess inclusion, and that such amounts will be distributed at or after the time the excess inclusion accrues and not later than the end of the calendar year following the year of accrual.  If the non-U.S. Person transfers the residual interest security to a U.S. Person, the transfer will be disregarded, and the foreign transferor will continue to be treated as the owner, if the transfer has the effect of allowing the transferor to avoid tax on accrued excess inclusions.  The Agreements will provide that no residual interest security may be transferred to a non-U.S. Person.  In addition, no transfer of a residual interest security will be permitted unless the proposed transferee shall have furnished to the trustee an affidavit representing and warranting that it is not a Non-U.S. Person.

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The Agreements provide that any attempted transfer or pledge in violation of the transfer restrictions discussed above shall be absolutely null and void and shall vest no rights in any purported transferee.  Investors in residual interest securities are advised to consult their own tax advisors with respect to transfers of the residual interest securities and, in addition, pass-through entities are advised to consult their own tax advisors with respect to any tax which may be imposed on a pass-through entity.

Inducement Fees.   The REMIC Regulations (i) require transferees of noneconomic residual interests that receive payments made to induce the acquisition of such interests (“inducement fees”) to recognize such fees as income over the expected remaining life of the acquired REMIC in a manner that reasonably reflects the after-tax costs and benefits of holding the residual interests, and (ii) specify that inducement fees constitute income from sources within the United States.  These regulations will apply to any inducement fee received in connection with the acquisition of a residual interest security.

Mark-to-Market Rule.  Prospective purchasers of a residual interest security should be aware that such a security acquired after January 3, 1995 cannot be marked-to-market.

Taxation of the REMIC

Although a REMIC is a separate entity for federal income tax purposes, a REMIC is not generally subject to entity-level tax.  Rather, the taxable income or net loss of a REMIC is taken into account by the holders of residual interests.  As described above, regular interests issued by a REMIC are treated as debt of the REMIC.

Qualification as a REMIC.   The issuing entity’s trust estate or, alternatively, each of one or more designated pools of the assets of the trust estate, may elect to be treated under the Code as a REMIC.  The regular interest securities and residual interest securities will constitute the “regular interests” and “residual interests,” respectively, in a REMIC if an election is in effect and certain tests concerning (i) the composition of the REMIC’s assets and (ii) the nature of the holders’ interests in the REMIC are met on a continuing basis.  A loss of REMIC status could have a number of consequences for holders.  If, as the result of REMIC disqualification, the trust estate were treated as an association taxable as a corporation, distributions on the security could be recharacterized in part as dividends from a non-includible corporation and in part as returns of capital.  Alternatively, distributions on a regular interest security could continue to be treated as comprised of interest and principal notwithstanding REMIC disqualification, in which case a cash-basis holder might not be required to continue to recognize income with respect to the security on a accrual basis.  Under the first alternative, a loss of REMIC status would, and under the second alternative, a loss of REMIC status could cause the securities and the associated distributions not to be qualified assets and income for the various purposes of domestic building and loan associations and REITs described under “Special Tax Attributes—REMIC Securities” below.

Calculation of REMIC Income. The taxable income or net loss of a REMIC is determined under an accrual method of accounting and in the same manner as in the case of an individual, with certain adjustments. In general, the taxable income or net loss will be the difference between (i) the gross income produced by the REMIC’s assets, including stated interest and any OID or market discount on loans and other assets, and (ii) deductions, including stated interest and OID accrued on regular interest securities, amortization of any premium with respect to loans, and servicing fees and other expenses of the REMIC. A holder of a residual interest security that is an individual or a “pass-through interest holder” (including certain pass-through entities, but not including REITs) will be unable to deduct servicing fees payable on the loans or other administrative expenses of the REMIC for a given taxable year, to the extent that such expenses, when aggregated with such holder’s other miscellaneous itemized deductions for that year, do not exceed two percent of such holder’s adjusted gross income.

For purposes of computing its taxable income or net loss, the REMIC should have an initial aggregate tax basis in its assets equal to the aggregate fair market value of the regular interests and the residual interests on the “startup day” (generally, the day that the interests are issued).  That aggregate basis will be allocated among the assets of the REMIC in proportion to their respective fair market values.

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The OID provisions of the Code and the OID regulations apply to loans of individuals originated on or after March 2, 1984, and the market discount provisions apply to loans originated after July 18, 1984.  Subject to possible application of the de minimis rules, the method of accrual by the REMIC of OID income on such loans will be equivalent to the method under which securityholders accrue OID (i.e., under the constant yield method taking into account the Prepayment Assumption).  The REMIC will deduct OID on the regular interest securities in the same manner that the holders of the regular interest securities include such discount in income, but without regard to the de minimis rules.  See “Taxation of Debt Securities Generally” above.  However, a REMIC that acquires loans at a market discount must include such market discount in income currently, as it accrues, on a constant interest basis.

To the extent that the REMIC’s basis allocable to loans that it holds exceeds their principal amounts, the resulting premium, if attributable to mortgages originated after September 27, 1985, will be amortized over the life of the loans (taking into account the Prepayment Assumption) on a constant yield method.  Although the law is somewhat unclear regarding recovery of premium attributable to loans originated on or before such date, it is possible that such premium may be recovered in proportion to payments of loan principal.

Prohibited Transactions and Contributions Tax.  The REMIC will be subject to a 100% tax on any net income derived from a “prohibited transaction.” For this purpose, net income will be calculated without taking into account any losses from prohibited transactions or any deductions attributable to any prohibited transaction that resulted in a loss.  In general, prohibited transactions include: (i) subject to limited exceptions, the sale or other disposition of any qualified mortgage transferred to the REMIC; (ii) subject to limited exceptions, the sale or other disposition of a cash flow investment; (iii) the receipt of any income from assets not permitted to be held by the REMIC pursuant to the Code; or (iv) the receipt of any fees or other compensation for services rendered by the REMIC.  It is anticipated that a REMIC will not engage in any prohibited transactions in which it would recognize a material amount of net income.  In addition, subject to a number of exceptions, a tax is imposed at the rate of 100% on amounts contributed to a REMIC after the close of the three-month period beginning on the startup day.  The holders of residual interest securities will generally be responsible for the payment of any such taxes imposed on the REMIC.  To the extent not paid by such holders or otherwise, however, such taxes will be paid out of the trust fund and will be allocated pro rata to all outstanding classes of securities of such REMIC.

Modifications of mortgage loans entered into after they have been contributed to a REMIC and before the loan is classified as defaulted could cause a REMIC to incur prohibited transaction taxes or to violate certain requirements necessary to maintain its tax status as a REMIC.   Notwithstanding our stated intention to not have the REMIC enter into transactions that could give rise to prohibited transaction taxes, recent government initiated mortgage foreclosure prevention programs encourage mortgage servicers to modify certain categories of residential mortgage loans in advance of default in order to prevent widespread foreclosures.  These programs generally include safe harbors and exemptions from adverse tax consequences for investors in the modified residential mortgage loans, some of which exemptions expired in 2010 and others of which continue in effect.

Administrative Matters. The books of a REMIC must be maintained on a calendar year basis and the REMIC must file an annual federal income tax return.  A REMIC will also be subject to the procedural and administrative rules of the Code applicable to partnerships, including the determination of any adjustments to, among other things, items of REMIC income, gain, loss, deduction, or credit, by the IRS in a unified administrative proceeding.

Non-REMIC Debt Securities

If a REMIC election is not made on behalf of the issuing entity’s trust estate, Chapman and Cutler LLP will deliver its opinion generally to the effect that (i) although no regulations, published rulings or judicial decisions exist that specifically discuss the characterization for federal income tax purposes of securities with terms substantially the same as the non-REMIC debt securities, in its opinion such securities will be treated for federal income tax purposes as indebtedness and not as an ownership interest in the collateral or an equity interest in the issuer, and (ii) either (A) the issuer will not be a taxable mortgage pool or (B) the issuer may be a taxable mortgage pool but will not subject to federal income tax as a corporation so long as all of the securities classified as equity interests in the issuer for federal income tax purposes are held by an entity that qualifies as a REIT, or are held directly or indirectly through one or more wholly owned “qualified REIT subsidiaries,” each as defined under section 856 of the Code.

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Interest on Non-REMIC Debt Securities.  Except as described with respect to OID, market discount or premium, interest paid or accrued on non-REMIC debt securities generally will be treated as ordinary income to the holder, and will be includible in income in accordance with such holder’s regular method of accounting.

Original Issue Discount.  Certain classes of non-REMIC debt securities may be issued with OID.  The rules governing OID with respect to a regular interest security are described above under “Taxation of Debt Securities Generally — Original Issue Discount” In view of the complexities and current uncertainties as to the manner of inclusion in income of OID on non-REMIC debt securities, each investor should consult his own tax advisor to determine the appropriate amount and method of inclusion in income of OID on such non-REMIC debt securities for federal income tax purposes.

Amortizable Bond Premium.  The rules governing “premium” apply equally to non-REMIC debt securities (see above “Taxation of Debt Securities Generally — Amortizable Bond Premium”).

Market Discount. A subsequent purchaser of a non-REMIC debt security may also be subject to the market discount provisions of Code sections 1276 through 1278.  These rules are described above under “Taxation of Debt Securities Generally—Market Discount.”

Sale or Redemption.  If a security is sold, exchanged, redeemed or retired, the seller will recognize gain or loss equal to the difference between the amount realized on the sale and the seller’s adjusted basis in the security.  Such adjusted basis generally will equal the cost of the security to the seller, increased by any OID and market discount included in the seller’s gross income with respect to the security and reduced by payments, other than payments of qualified stated interest, previously received by the seller and by any amortized premium.  If a securityholder is a bank, thrift or similar institution described in section 582(c) of the Code, gain or loss realized on the sale or exchange of a security will be taxable as ordinary income or loss.  Any such gain or loss recognized by any other seller generally will be capital gain or loss provided that the security is held by the seller as a “capital asset” (generally, property held for investment) within the meaning of Code section 1221.  Such gain or loss will be long-term gain or loss if the security is held as a capital asset for more than one year.  Long-term capital gains of non-corporate taxpayers are subject to reduced maximum rates while short-term capital gains are taxable at ordinary rates.  The use of capital losses is subject to limitations.

Special Tax Attributes

Certain securities carry additional special tax attributes under particular sections of the Code, as discussed below.

REMIC Securities.  Except to the extent otherwise provided in the related prospectus supplement:  (i) REMIC securities held by a “domestic building and loan association” will constitute assets described in Code section 7701(a)(19)(C)(xi); and (ii) REMIC securities held by a REIT will constitute “real estate assets” within the meaning of Code section 856(c)(5)(B) and interest on such securities will be considered “interest on obligations secured by mortgages on real property” within the meaning of Code section 856(c)(3)(B), subject to the limitation as set forth below.  REMIC securities held by certain financial institutions will constitute “evidences of indebtedness” within the meaning of Code section 582(c)(1).

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In the case of items (i) and (ii) above, if less than 95% of the REMIC’s assets are assets qualifying under any of the foregoing Code sections, the REMIC securities will be qualifying assets only to the extent that the REMIC’s assets are qualifying assets.  Additionally, in the case of a REIT, the same limitation described in the preceding sentence shall apply for the purpose of treating income on such REMIC securities as “interest on obligations secured by mortgages on real property.” We note that in the case of item (ii) above, pursuant to recent IRS guidance an 80% threshold may be substituted for the 95% threshold but only if the REMIC securities are guaranteed by Fannie Mae or Freddie Mac (which would not typically be the case with respect to any of the Offered Securities). If a series of securities employs a multi-tier REMIC structure, both the Upper Tier REMIC and the Lower Tier REMIC will be treated as a single REMIC for purposes of determining the extent to which the related REMIC securities and the income thereon will be treated as such assets and income.

Regular interest securities held by other REMICs generally also qualify as “qualified mortgages” within the meaning of section 860G(a)(3) of the Code, provided such securities are transferred to the other REMIC within the periods required by the Code.

The determination as to the percentage of the REMIC’s assets that constitute assets described in the foregoing sections of the Code will be made for each calendar quarter based on the average adjusted basis of each category of the assets held by the REMIC during that calendar quarter. The REMIC will report those determinations in the manner and at the times required by applicable Treasury regulations. The SBJPA of 1996 repealed the reserve method for bad debts of domestic building and loan associations and mutual savings banks, and thus has eliminated the asset category of “qualifying real property loans” in former section 593(d) of the Code for taxable years beginning after December 31, 1995. The requirements in the SBJPA of 1996 that these institutions must “recapture” a portion of their existing bad debt reserves is suspended if a certain portion of their assets are maintained in “residential loans” under section 7701(a)(19)(C)(v) of the Code, but only if those loans were made to acquire, construct or improve the related real property and not for the purpose of refinancing. However, no effort will be made to identify the portion of the mortgage loans of any series meeting this requirement, and no representation is made in this regard.

The assets of the REMIC will include, in addition to mortgage loans, payments on mortgage loans held pending distribution on the REMIC securities and property acquired by foreclosure held pending sale, and may include amounts in reserve accounts.  It is unclear whether property acquired by foreclosure held pending sale and amounts in reserve accounts would be considered to be part of the mortgage loans, or whether those assets (to the extent not invested in assets described in the foregoing sections) otherwise would receive the same treatment as the mortgage loans for purposes of all of the foregoing sections.  Under the regulations applicable to REITs, however, mortgage loan payments held by a REMIC pending distribution are real estate assets for purposes of section 856(c)(5)(B) of the Code.  Furthermore, foreclosure property generally will qualify as real estate assets under section 856(c)(5)(B) of the Code.

Non-REMIC Debt Securities.  Non-REMIC debt securities will be treated as indebtedness of the issuer for federal income tax purposes and as such, (i) securities held by a thrift institution taxed as a domestic building and loan association will not constitute “loans secured by an interest in real property” within the meaning of Code section 7701(a)(19)(C)(v), (ii) interest on non-REMIC debt securities held by a REIT will not be treated as “interest on obligations secured by mortgages on real property or on interests in real property” within the meaning of Code section 856(c)(3)(B), and non-REMIC debt securities will not constitute “real estate assets“ or “government securities” within the meaning of Code section 856(c)(4)(A), and (iii) non-REMIC debt securities held by a regulated investment company will not constitute “government securities” within the meaning of Code section 851(b)(4)(A)(i).

Withholding With Respect to Certain Foreign Investors

Interest (including OID) paid to or accrued by a beneficial owner of a security who is a not a U.S. Person (a “foreign person”) generally will be considered “portfolio interest” and generally will not be subject to U.S. federal income and withholding tax, provided the interest is not effectively connected with the conduct of a trade or business within the United States by the foreign person and the foreign person (i) is not actually or constructively a 10 percent shareholder of the depositor or its affiliates or a controlled foreign corporation with respect to which the depositor or its affiliates is a related person (all within the meaning of the Code) and (ii) provides the indenture trustee or other person who is otherwise required to withhold U.S. tax with respect to the securities (the “withholding agent”) with an appropriate statement on Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding), or an applicable successor form.  If a security is held through a securities clearing organization or certain other financial institutions, the organization or institution may provide the relevant signed statement to the withholding agent; in that case, however, the signed statement must be accompanied by a Form W-8BEN provided by the foreign person that owns the security.  If the information shown on Form W-8BEN changes, a new Form W-8BEN must be filed.  If interest on the securities is not portfolio interest, then interest (including OID) will be subject to United States federal income and withholding tax at a rate of 30 percent, unless reduced or eliminated pursuant to an applicable tax treaty.

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Under Treasury regulations, a payment to a foreign partnership is treated, with some exceptions, as a payment directly to the partners, so that the partners are required to provide any required certifications.  Foreign persons that intend to hold a security through a partnership or other pass-through entity should consult their own tax advisors regarding the application of those Treasury regulations to an investment in a security.

Any capital gain realized on the sale, redemption, retirement or other taxable disposition of a security by a foreign person will be exempt from United States federal income and withholding tax, provided that (i) such gain is not effectively connected with the conduct of a trade or business in the United States by the foreign person and (ii) in the case of a foreign person who is an individual, the foreign person is not present in the United States for 183 days or more in the taxable year.

For purposes of this discussion, the term “U.S. Person” means (i) a citizen or resident of the United States; (ii) a corporation (or entity treated as a corporation for tax purposes) created or organized in the United States or under the laws of the United States or of any state including the District of Columbia; (iii) a partnership (or entity treated as a partnership for tax purposes) organized in the United States or under the laws of the United States or of any state including the District of Columbia (unless provided otherwise by future Treasury regulations); (iv) an estate whose income is includible in gross income for United States income tax purposes regardless of its source; or (v) a trust, if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. Persons have authority to control all substantial decisions of the trust.  Notwithstanding the last clause of the preceding sentence, to the extent provided in Treasury regulations, certain trusts that were in existence on August 20, 1996, that were treated as U.S. Persons prior to such date and that elect to continue to be treated as U.S. Persons also will be U.S. Persons.

Backup Withholding

Under federal income tax law, a securityholder, beneficial owner, financial intermediary or other recipient of a payment on behalf of a beneficial owner may be subject to “backup withholding” under certain circumstances. Backup withholding may apply to such person who is a United States person if such person, among other things, (i) fails to furnish his social security number or other taxpayer identification number, (ii) furnishes an incorrect taxpayer identification number, (iii) fails to report properly interest and dividends, or (iv) under certain circumstances, fails to provide a certified statement, signed under penalties of perjury, that the taxpayer identification number provided is correct and that such person is not subject to backup withholding. Backup withholding may apply, under certain circumstances, to a securityholder who is a Non-U.S. Person if the securityholder fails to provide securities broker with a Foreign Person Certification. Backup withholding applies to “reportable payments,” which include interest payments and principal payments to the extent of accrued OID, as well as distributions of proceeds from the sale of regular interest securities or residual interest securities. The backup withholding rate is generally the fourth lowest rate of income tax as in effect from time to time. Backup withholding, however, does not apply to payments on a security made to certain exempt recipients, such as tax-exempt organizations, and to certain Non-U.S. Persons. Securityholders should consult their tax advisors for additional information concerning the potential application of backup withholding to payments received by them with respect to a security.

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FATCA Tax Regime

The Foreign Account Tax Compliance Act (FATCA) tax regime was enacted in the United States in 2010 as part of the “Hiring Incentives to Restore Employment (HIRE) Act” as a way to encourage tax reporting and compliance with respect to ownership by U.S. persons of assets through foreign accounts. Under FATCA, foreign financial institutions (defined broadly to include hedge funds, private equity funds, mutual funds, securitization vehicles and other investment vehicles) must comply with new information gathering and reporting rules with respect to their U.S. account holders and investors and may be required to enter into agreements with the IRS pursuant to which such foreign financial institutions must gather and report certain information to the IRS and withhold U.S. tax from certain payments made by it. The FATCA provisions apply generally to debt instruments issued after March 18, 2012. Foreign financial institutions that fail to comply with the FATCA requirements will be subject to a new 30% withholding tax on U.S. source payments made to them after December 31, 2013, including interest, OID and (for payments after December 31, 2014) gross proceeds from the sale of any equity or debt instruments of U.S. issuers. Foreign non-financial entities may also be required to provide a certification as to their U.S. owners in order to avoid FATCA withholding. The new FATCA withholding tax will apply regardless of whether the payment would otherwise be exempt from U.S. nonresident withholding tax (e.g., under the portfolio interest exemption or as capital gain) and regardless of whether the foreign financial institution is the beneficial owner of such payment. The FATCA provisions also impose new information reporting requirements and increase related penalties for U.S. persons. The IRS is authorized to promulgate regulations and issue guidance as appropriate to carry out the purposes of and prevent avoidance of the FATCA provisions. Although the IRS has issued several notices regarding implementation of FATCA, numerous issues regarding demonstration of compliance with the record keeping and reporting rules of FATCA necessary to avoid application of the FATCA withholding tax remain unresolved.

Tax Return Disclosure Requirements

Tax legislation and Treasury Department pronouncements directed at abusive tax shelter activity may apply to transactions not conventionally regarded as tax shelters.  Taxpayers are required to report certain information on IRS Form 8886 if they participate in a “reportable transaction” (as defined under Treasury regulations promulgated under Section 6011 of the Code).  A penalty in the amount of $10,000 in the case of a natural person and $50,000 in any other case is imposed on any taxpayer that fails to file timely an information return with the IRS with respect to a “reportable transaction.” The rules defining “reportable transactions” are complex and include, among other categories of transactions, transactions that result in certain losses that exceed threshold amounts.  Holders of certificates are encouraged to consult their own tax advisors regarding any possible disclosure obligations in light of their particular circumstances.

DUE TO THE COMPLEXITY OF THE FEDERAL INCOME TAX RULES APPLICABLE TO SECURITYHOLDERS AND THE CONSIDERABLE UNCERTAINTY THAT EXISTS WITH RESPECT TO MANY ASPECTS OF THOSE RULES, POTENTIAL INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE TAX TREATMENT OF THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF THE SECURITIES.

STATE TAX CONSIDERATIONS

In addition to the federal income tax consequences described above, potential investors should consider the state income tax consequences of the acquisition, ownership, and disposition of the securities.  State income tax law may differ substantially from the corresponding federal law, and this discussion does not purport to describe any aspect of the income tax laws of any state.  Therefore, potential investors should consult their own tax advisors with respect to the various state tax consequences of an investment in the securities.

ERISA CONSIDERATIONS

The following describes certain considerations under ERISA and Section 4975 of the Code which apply only to securities of a series that are not divided into subclasses.  If securities are divided into subclasses, the prospectus supplement will contain information concerning considerations relating to ERISA and the Section 4975 of the Code that are applicable to such securities.

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ERISA and Section 4975 of the Code impose requirements on employee benefit plans (and on certain other retirement plans and arrangements, including individual retirement accounts and annuities and certain Keogh plans, and on collective investment funds and separate accounts in which such plans, accounts or arrangements are invested) (collectively “Plans”) subject to ERISA or to Section 4975 of the Code and on persons who are fiduciaries with respect to such Plans. Generally, ERISA applies to investments made by Plans. Among other things, ERISA requires that the assets of Plans be held in trust and that the trustee, or other duly authorized fiduciary, have exclusive authority and discretion to manage and control the assets of such Plans. ERISA also imposes certain duties on persons who are fiduciaries of Plans. Under ERISA, any person who exercises any discretionary authority or control respecting the management or disposition of the assets of a Plan is considered to be a fiduciary of such Plan (subject to certain exceptions not here relevant). Certain employee benefit plans, such as governmental plans (as defined in Section 3(32) of ERISA) and, if no election has been made under Section 410(d) of the Code, church plans (as defined in Section 3(33) of ERISA), are not subject to ERISA requirements. Accordingly, assets of such plans may be invested in securities without regard to the ERISA considerations described above and below, subject to the provisions of applicable state law. Any such plan which is qualified and exempt from taxation under Sections 401(a) and 501(a) of the Code, however, is subject to the prohibited transaction rules set forth in Section 503 of the Code.

In addition to the imposition of general fiduciary standards of investment prudence and diversification, ERISA prohibits a broad range of transactions involving Plan assets and persons (“Parties in Interest”) having certain specified relationships to a Plan and imposes additional prohibitions where Parties in Interest are fiduciaries with respect to such Plan.  Certain Parties in Interest that participate in a prohibited transaction may be subject to excise taxes imposed pursuant to Section 4975 of the Code, or a penalty imposed pursuant to Section 502(i) of ERISA, unless a statutory, regulatory or administrative exemption is available.

On November 13, 1986, the United States Department of Labor (the “DOL”) issued final regulations concerning the definition of what constitutes the assets of a Plan.  Under this regulation, the underlying assets and properties of corporations, partnerships, trusts and certain other entities in which a Plan acquires an “equity” interest could be deemed for purposes of ERISA and Section 4975 of the Code to be assets of the investing Plan in certain circumstances unless certain exceptions apply.

Under the Plan Asset Regulation, the term “equity” interest is defined as any interest in an entity other than an instrument which (i) is treated as indebtedness under “applicable local law“ and (ii) has no “substantial equity features.” If the securities of a series consist of bonds that are not treated as equity interests in the issuing entity for purposes of the Plan Asset Regulation, a Plan’s investment in such bonds would not cause the issuing entity assets to be deemed Plan assets. However, the depositor, the servicer, the trustee and the underwriter may be the sponsor or investment advisor with respect to one or more Plans. Because such parties may receive certain benefits in connection with the sale of the bonds, the purchase of bonds using Plan assets over which any such parties (or any affiliates thereof) has investment authority might be deemed to be a violation of the prohibited transaction rules of ERISA and Section 4975 of the Code for which no exemption may be available. Accordingly, bonds may not be purchased using the assets of any Plan if the depositor, the servicer, the trustee, the underwriter or any of their affiliates (a) has investment or administrative discretion with respect to such Plan assets; (b) has authority or responsibility to give, or regularly gives, investment advice with respect to such Plan assets for a fee and pursuant to an agreement of understanding that such advice (i) will serve as a primary basis for investment decisions with respect to such Plan assets and (ii) will be based on the particular investment needs for such Plan; or (c) is an employer maintaining or contributing to such Plan.

In addition, the issuing entity or an affiliate might be considered or might become a Party in Interest with respect to a Plan.  Also, any holder of certificates issued by the issuing entity, because of its activities or the activities of its respective affiliates, may be deemed to be a Party in Interest with respect to certain Plans, including but not limited to Plans sponsored by such holder.  In either case, the acquisition or holding of bonds by or on behalf of such a Plan could be considered to give rise to a prohibited transaction within the meaning of ERISA and Section 4975 of the Code, unless it is subject to one or more exemptions such as:

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· Prohibited Transaction Class Exemption (“PTCE”) 84-14, which exempts certain transactions effected on behalf of a Plan by a “qualified professional asset manager”;

· PTCE 90-1, which exempts certain transactions involving insurance company pooled separate accounts;

· PTCE 91-38, which exempts certain transactions involving bank collective investment funds;

· PTCE 95-60, which exempts certain transactions involving insurance company general accounts; or

· PTCE 96-23, which exempts certain transactions effected on behalf of a Plan by certain “in-house asset managers.”

The prospectus supplement for a series of securities may require that Plans or Plan asset investors investing in bonds represent that the relevant conditions for exemptive relief under at least one of the foregoing exemptions have been satisfied.

The Plan Asset Regulation provides that, generally, the assets of an entity in which a Plan invests will not be deemed to be assets of such Plan for purposes of ERISA if the equity interest acquired by the investing Plan is a publicly-offered security, or if equity participation by benefit plan investors is not significant.  In general, a publicly-offered security, as defined in the Plan Asset Regulation, is a security that is widely held, freely transferable and registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Equity participation in an entity by benefit plan investors is not significant if, after the most recent acquisition of an equity interest in the entity, less than 25% of the value of each class of equity interest in the entity is held by “benefit plan investors,” which include benefit plans described in ERISA or under Section 4975 of the Code, whether or not they are subject to ERISA, as well as entities whose underlying assets include assets of a Plan by reason of a Plan’s investment in the entity.

If no exception under the Plan Asset Regulation applies and if a Plan (or a person investing Plan assets, such as an insurance company general account) acquires an equity interest in an issuing entity established for a series of securities, then the issuing entity assets would be considered to be assets of the Plan.  Because the loans held by the issuing entity may be deemed Plan assets of each Plan that purchases equity securities, an investment in the securities by a Plan might be a prohibited transaction under Sections 406 and 407 of ERISA and subject to an excise tax under Section 4975 of the Code and may cause transactions undertaken in the course of operating the issuing entity to constitute prohibited transactions, unless a statutory or administrative exemption applies.

The DOL has issued PTCE 83-1, which exempts from ERISA’s prohibited transaction rules certain transactions relating to the operation of residential mortgage pool investment trusts and the purchase, sale and holding of “mortgage pool pass-through certificates” in the initial issuance of such certificates.  If the general conditions (discussed below) of PTEC 83-1 are satisfied, investments by a Plan in certificates that provide for pass-through payments of principal and interest and represent beneficial undivided fractional interests in a fixed investment pool consisting solely of interest-bearing obligations secured by first or second mortgages or deeds of trust on single-family residential property, property acquired in foreclosure and undistributed cash (“single-family securities”) will be exempt from the prohibitions of Sections 406(a) and 407 of ERISA (relating generally to transactions with Parties in Interest who are not fiduciaries) if the Plan purchases the single-family securities at no more than fair market value and will be exempt from the prohibitions of ERISA Sections 406(b)(1) and (2) (relating generally to transactions with fiduciaries) if, in addition, the purchase is approved by an independent fiduciary, no sales commission is paid to the pool depositor, the Plan does not purchase more than 25% of all single-family securities, and at least 50% of all single-family securities are purchased by persons independent of the pool depositor or pool trustee.  PTCE 83-1 does not provide an exemption for transactions involving subordinate securities.

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The discussion in this and the next succeeding paragraph applies only to single-family securities.  PTCE 83-1 sets forth three general conditions which must be satisfied for any transaction to be eligible for exemption:

· the maintenance of a system of insurance or other protection for the pooled mortgage loans and property securing such loans, and for indemnifying certificateholders against reductions in pass-through payments due to property damage or defaults in loan payments in an amount not less than the greater of one percent of the aggregate principal balance of all covered pooled mortgage loans or the principal balance of the largest covered pooled mortgage loan;

· the existence of a pool trustee who is not an affiliate of the pool depositor; and

· a limitation on the amount of the payment retained by the pool depositor, together with other funds inuring to its benefit, to not more than adequate consideration for selling the mortgage loans plus reasonable compensation for services provided by the pool depositor to the pool.

The depositor believes that the first general condition referred to above will be satisfied with respect to the certificates issued without a subordination feature, or the senior certificates only in a series issued with a subordination feature, provided that the subordination and reserve account, subordination by shifting of interests, the pool insurance or other form of credit enhancement described under “Credit Enhancement” in this prospectus (such subordination, pool insurance or other form of credit enhancement being the system of insurance or other protection referred to above) with respect to a series of certificates is maintained in an amount not less than the greater of one percent of the aggregate principal balance of the loans or the principal balance of the largest loan.  See “Description of the Securities” in this prospectus.  In the absence of a ruling that the system of insurance or other protection with respect to a series of certificates satisfies the first general condition referred to above, there can be no assurance that these features will be so viewed by the DOL.  As to the second general condition, the trustee will not be affiliated with the depositor.

Each Plan fiduciary who is responsible for making the investment decisions as to whether to purchase or commit to purchase and to hold single family securities must make its own determination as to whether the first and third general conditions, and the specific conditions described briefly in the preceding paragraphs, of PTCE 83-1 have been satisfied, or as to the availability of any other prohibited transaction exemptions.  Each Plan fiduciary should also determine whether, under the general fiduciary standards of investment prudence and diversification, an investment in the certificates is appropriate for the Plan, taking into account the overall investment policy of the Plan and the composition of the Plan’s investment portfolio.

The DOL has issued to various underwriters individual prohibited transaction exemptions which generally exempt from the application of certain prohibited transaction provisions of ERISA and Section 4975 of the Code transactions with respect to the initial purchase, the holding and the subsequent resale by Plans of securities issued by the investment pools whose assets consist of:

· certain types of secured receivables, secured loans and other secured obligations, including obligations secured by shares issued by a cooperative housing association, and obligations that bear interest or are purchased at a discount and which are secured by single-family residential real property and/or multifamily residential real property (including obligations secured by leasehold interests on residential real property);

· property securing a permitted obligation;

· undistributed cash, cash credited to a “pre-funding account” or a “capitalized interest account,” and certain temporary investments made therewith; and

113

· certain types of credit support arrangements, including yield supplement agreements and interest-rate swaps that meet certain requirements set forth in exemptions.

The securities covered by the underwriter exemptions include certificates representing a beneficial ownership interest in the assets of an issuing entity (including a grantor trust, owner trust or REMIC) and which entitle the holder to payments of principal, interest and/or other payments made with respect to the assets of such issuing entity.

Among the conditions that must be satisfied for the underwriter exemptions to apply are the following:

· The Plan must acquire the securities on terms, including the security price, that are at least as favorable to the Plan as they would be in an arm’s-length transaction with an unrelated party;

· the securities must not be subordinated to any other class of securities issued by the same issuer, unless the securities are issued in a “designated transaction”;

· at the time of acquisition, the securities acquired by the Plan must have received a rating in one of the three (or, in the case of designated transactions, four) highest generic rating categories from Standard and Poor’s Rating Services, Moody’s Investors Service, Inc., Fitch Ratings, DBRS Limited or DBRS, Inc., each referred to herein as a “rating agency”;

· the trustee must not be an affiliate of any other member of the “restricted group”;

· the sum of all payments made to and retained by the underwriter must not total more than reasonable compensation for underwriting the securities, the sum of all payments made to and retained by the issuer’s depositor for assigning the obligations to the issuer must not total more than the fair market value of the obligations, and the sum of all payments made to and retained by any servicer must not total more than reasonable compensation and expense reimbursement for its services;

· the Plan must be an “accredited investor” as defined in Rule 501(a)(l) of Regulation D of the commission under the Securities Act of 1933; and

· in the event that all of the obligations used to fund the issuer have not been transferred to the issuer on the closing date, additional obligations having an aggregate value equal to no more than 25% of the total principal amount of the securities being offered may be transferred to the issuer under a pre-funding feature within 90 days or three months following the closing date.

The issuer must also meet the following requirements:

· the assets of the issuer must consist solely of assets of the type that have been included in other investment pools;

· securities evidencing interests in other investment pools must have been rated in one of the three (or in the case of designated transactions, four) highest rating categories by a rating agency for at least one year prior to the Plan’s acquisition of securities; and

· investors other than Plans must have purchased securities evidencing interests in the other investment pools for at least one year prior to the Plan’s acquisition of securities.

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For purposes of the underwriter exemptions, the term “designated transaction” includes any securitization transaction in which the assets of the issuer consist solely of obligations secured by shares issued by a cooperative housing association and/or obligations that bear interest or are purchased at a discount and which are secured by single-family residential real property and/or multifamily residential real property (including obligations secured by leasehold interests on residential real property).  Such residential mortgage loans may be less than fully secured, provided that:

· the securities acquired by a Plan in the designated transaction are not subordinated to any other class of securities issued by the same issuer;

· at the time of acquisition, the securities acquired by the Plan must have received a rating in one of the two highest generic rating categories from a rating agency; and

· the obligations must be secured by collateral whose fair market value on the closing date of the designated transaction is at least equal to 80% of the sum of (i) the outstanding principal balance due under the obligation and (ii) the outstanding principal balance of any other obligations of higher priority (whether or not held by the issuer) which are secured by the same collateral.

The underwriter exemptions also provide relief from various self-dealing/conflict of interest prohibited transactions that may occur when a Plan fiduciary causes a Plan to acquire securities of an issuer and the fiduciary, or its affiliate, is an obligor with respect to obligations or receivables contained in the issuer; provided that, among other requirements:

· in the case of an acquisition in connection with the initial issuance of the securities, at least 50% of each class of securities in which Plans have invested is acquired by persons independent of the restricted group and at least 50% of the aggregate interest in the issuer is acquired by persons independent of the restricted group;

· the fiduciary, or its affiliate, is an obligor with respect to five percent or less of the fair market value of the obligations or receivables contained in the issuer;

· the Plan’s investment in each class of securities does not exceed 25% of all of the securities of that class outstanding at the time of acquisition; and

· immediately after the Plan acquires the securities, no more than 25% of the Plan’s assets for which the person is a fiduciary are invested in certificates representing an interest in one or more trusts containing assets sold or serviced by the same entity.

The underwriter exemptions do not apply to Plans sponsored by a member of the restricted group, which includes the depositor, the servicer (and any subservicer), the trustee, the underwriter, any obligor with respect to obligations or receivables included in the issuer constituting more than five percent of the aggregate unamortized principal balance of the issuer’s assets, any insurer, the counterparty to any interest-rate swap entered into by the issuer and any affiliate of these parties.

Prohibited Transaction Exemption 2000-58 amended the underwriter exemptions and extended the relief available thereunder to transactions involving the initial purchase, holding and subsequent resale by Plans of securities denominated as debt that are issued by, and are obligations of, investment pools whose assets are held in trust.  The same conditions described above relating to certificates must also be met with respect to bonds.  In addition, prior to the issuance of the bonds, the issuer must have received a legal opinion to the effect that the bondholders will have a perfected security interest in the issuer’s assets.  As with certificates, exemptive relief would not be available for Plans sponsored by a member of the restricted group.

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The prospectus supplement will provide further information that Plans should consider before purchasing the securities.  Any Plan fiduciary that proposes to cause a Plan or an entity holding Plan assets to purchase securities is encouraged to consult with its counsel concerning the impact of ERISA and the Code, the applicability of PTCE 83-1, the availability and applicability of any underwriter exemption or any other exemptions from the prohibited transaction provisions of ERISA and Section 4975 of the Code and the potential consequences in their specific circumstances, before making the investment.  Moreover, each Plan fiduciary should determine whether under the general fiduciary standards of investment prudence and diversification an investment in the securities is appropriate for the Plan, taking into account the overall investment policy of the Plan and composition of the Plan’s investment portfolio.

LEGAL INVESTMENT

The prospectus supplement for each series of securities will specify which, if any, of the classes of securities offered thereby constitute “mortgage related securities” for purposes of the Secondary Mortgage Market Enhancement Act of 1984 (“SMMEA”).  Classes of securities that qualify as mortgage related securities will be legal investments for persons, trusts, corporations, partnerships, associations, business trusts, and business entities (including depository institutions, life insurance companies and pension funds) created pursuant to or existing under the laws of the United States or of any state (including the District of Columbia and Puerto Rico) whose authorized investments are subject to state regulations to the same extent as, under applicable law, obligations issued by or guaranteed as to principal and interest by the United States or any such entities.  Under SMMEA, if a state enacted legislation prior to October 4, 1991 specifically limiting the legal investment authority of any of these entities with respect to mortgage related securities, securities will constitute legal investments for entities subject to such legislation only to the extent provided therein.  Approximately twenty-one states adopted such legislation prior to the October 4, 1991 deadline.  SMMEA provides, however, that in no event will the enactment of this type of legislation affect the validity of any contractual commitment to purchase, hold or invest in securities, or require the sale or other disposition of securities, so long as such contractually commitment was made or such securities were acquired prior to the enactment of the legislation.

SMMEA also amended the legal investment authority of federally chartered depository institutions as follows: federal savings and loan associations and federal savings banks may invest in, sell or otherwise deal in securities without limitations as to the percentage of their assets represented thereby, federal credit unions may invest in mortgage related securities, and national banks may purchase securities for their own account without regard to the limitations generally applicable to investment securities set forth in 12 U.S.C. 24 (Seventh), subject in each case to such regulations as the applicable federal authority may prescribe.  In this connection, federal credit unions should review the National Credit Union Administration (“NCUA”) Letter to Credit Unions No. 96, as modified by NCUA Letter to Credit Unions No. 108, which includes guidelines to assist federal credit unions in making investment decisions for mortgage related securities and the NCUA’s regulation “Investment and Deposit Activities” (12 C.F.R. Part 703), which sets forth certain restrictions on investments by federal credit unions in mortgage related securities (in each case whether or not the class of securities under consideration for purchase constituted a mortgage related security).

Institutions whose investment activities are subject to regulation by federal or state authorities should review rules, policies and guidelines adopted from time to time by those authorities before purchasing any securities, as certain series, classes or subclasses may be deemed unsuitable investments, or may otherwise be restricted, under those rules, policies or guidelines, in certain instances irrespective of SMMEA.

The foregoing does not take into consideration the applicability of statutes, rules, regulations, orders, guidelines or agreements generally governing investments made by a particular investor, including, but not limited to, “prudent investor” provisions, percentage-of-assets limits, provisions which may restrict or prohibit investment in securities which are not “interest bearing” or “income paying,” and, with regard to any securities issued in book-entry form, provisions which may restrict or prohibit investments in securities which are issued in book-entry form.

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Except as to the status of certain classes of securities as “mortgage related securities,” no representation is made as to the proper characterization of the securities for legal investment purposes, financial institution regulatory purposes, or other purposes, or as to the ability of particular investors to purchase securities under applicable legal investment restrictions.  The uncertainties described above, and any unfavorable future determinations concerning legal investment or financial institution regulatory characteristics of the securities, may adversely affect the liquidity of the securities.

Investors should consult their own legal advisors in determining whether and to what extent securities offered by this prospectus and the accompanying prospectus supplement constitute legal investments for them.

METHOD OF DISTRIBUTION

Each series of securities offered hereby and by means of the related prospectus supplement may be sold directly by the depositor or may be offered through an underwriter or underwriting syndicates represented by one or more lead underwriters.  The prospectus supplement with respect to each series of securities will set forth the terms of the offering of that series of securities and each subclass within that series, including the name or names of the underwriters, the proceeds to the depositor, and either the initial public offering price, the discounts and commissions to the underwriters and any discounts or concessions allowed or re-allowed to certain dealers, or the method by which the price at which the underwriters will sell the securities will be determined.

The underwriters will be obligated to purchase only those offered securities of a series as described in the prospectus supplement with respect to that series.  The offered securities may be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale.

If stated in the prospectus supplement, the depositor will authorize underwriters or other persons acting as the depositor’s agents to solicit offers by certain institutions to purchase the offered securities from the depositor pursuant to contracts providing for payment and delivery on a future date.  Institutions with which those contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others, but in all cases those institutions must be approved by the depositor.  The obligation of any purchaser under any contract will be subject to the condition that the purchase of the offered securities shall not at the time of delivery be prohibited under the laws of the jurisdiction to which that purchaser is subject.  The underwriters and other agents will not have any responsibility in respect of the validity or performance of those contracts.

The depositor may also sell the securities offered by means of this prospectus and the related prospectus supplements from time to time in negotiated transactions or otherwise, at prices determined at the time of sale.  The depositor may effect those transactions by selling securities to or through dealers, and those dealers may receive compensation in the form of underwriting discounts, concessions or commissions from the depositor and any purchasers of securities for whom they may act as agents.

The place and time of delivery for each series of securities offered hereby and by means of the related prospectus supplement will be set forth in the prospectus supplement with respect to that series.

If and to the extent required by applicable law or regulation, this prospectus and the attached prospectus supplement will also be used by the underwriter after the completion of the offering in connection with offers and sales related to market-making transactions in the offered securities in which the underwriter acts as principal.  Sales will be made at negotiated prices determined at the time of those sales.

One or more of the underwriters with respect to a series of securities, or affiliates of the underwriters, may engage in financing transactions with the depositor or affiliates of the depositor, including loans or repurchase agreements to provide financing of loans or other assets pending the transfer of those assets to an issuing entity.

117

Underwriters and agents may be entitled under agreements entered into with the depositor to indemnification by the depositor against certain civil liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribution with respect to payments which such underwriters or agents may be required to make in respect thereof.

Redwood Trust, Inc. or other affiliates of the depositor may purchase securities offered hereby and pledge them to secure indebtedness or, together with its pledgees, donees, transferees or other successors in interest, sell the securities, from time to time, either directly or indirectly through one or more underwriters, underwriting syndicates or designated agents.  This prospectus may be used in connection with any such pledge or sale.  

If a series is offered other than through underwriters, the prospectus supplement relating to that series will contain information regarding the nature of the offering and any agreements to be entered into between the depositor and purchasers of securities of that series.

LEGAL MATTERS

The validity of the securities will be passed upon for the issuing entity by Weintraub Genshlea Chediak Tobin & Tobin Law Corporation, San Francisco, California. Certain federal income tax consequences with respect to the securities will be passed upon for the issuing entity by Chapman and Cutler LLP, San Francisco, California. Certain matters may be passed on by counsel specified in the applicable prospectus supplement.

FINANCIAL INFORMATION

Each depositor has determined that its financial statements are not material to investors in the securities offered by this prospectus.  The securities will not represent an interest in or an obligation of either depositor.

A new issuing entity will be formed for each series of securities, and no issuing entity will engage in any business activities or have any material assets or obligations before the issuance of the securities of the related series.  Accordingly, no financial statements for any issuing entity will be included in this prospectus or in the applicable prospectus supplement.

STATIC POOL INFORMATION

Static pool information with respect to the sponsor’s prior securitized pools , presented by pool, or the portfolio of mortgage loans originated or purchased by the sponsor or its affiliates, presented by vintage year, will, to the extent material, be available online at an internet website address specified in the applicable prospectus supplement.  In addition, to the extent material, static pool information with respect to the prior securitized pools, presented by pool, or the portfolio of mortgage loans originated or purchased by one or more originators, presented by vintage year, will be similarly available, if specified in the applicable prospectus supplement.  The static pool data related to an issuing entity will include information, to the extent material, relating to:

· payment delinquencies of the mortgage loans;

· cumulative losses with respect to the mortgage loans; and

· prepayments of the mortgage loans,

in each case presented in periodic increments.

In addition, for each prior securitized pool or vintage origination year, summary information of the original characteristics of the securitized pool or the originated and purchased mortgage loans, as applicable, will be provided.  This information may include, among other things (in each case by pool or vintage year), the number of securitized mortgage loans or of originated or purchased mortgage loans; the original pool balance for each securitized pool or the total original balance of the originated or purchased mortgage loans; the weighted average interest rate; the weighted average original term to maturity; the weighted average remaining term to maturity; the weighted average and minimum and maximum credit score; the product type(s); the loan purposes; the weighted average loan-to-value ratio; the distribution of mortgage loans by interest rate; and information regarding the geographic distribution of the mortgage loans.

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Static pool information is not deemed part of this prospectus or of the Registration Statement of which the prospectus is a part to the extent that the static pool information relates to (a) any issuing entity that was established by the depositor or any other party before January 1, 2006, (b) information with respect to the portfolio of mortgage loans originated or purchased by an originator for periods before January 1, 2006 or (c) in the case of any information regarding the mortgage loans in any issuing entity established on or after January 1, 2006, information regarding those mortgage loans for periods before January 1, 2006.

Static pool information made available via an internet web site in connection with an offering of securities of any series will remain available on that web site for at least five years following commencement of the offering.

AVAILABLE INFORMATION

The depositors have filed the registration statement with the Securities and Exchange Commission (Registration Nos. 333-179292 and 333-179292-01).  The depositors are also subject to some of the information requirements of the Exchange Act, and, accordingly, will file reports thereunder with the Securities and Exchange Commission.  The registration statement and the exhibits thereto, and reports and other information filed by the depositors under the Exchange Act can be inspected and copied at the public reference facilities maintained by the Securities and Exchange Commission at 100 F Street, N.E., Washington, D.C. 20549, or by calling the SEC at 1-800-SEC-0330, and at certain of its Regional Offices located as follows: Chicago Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and Northeast Regional Office, 233 Broadway, New York, New York 10279 and electronically through the Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval System at the Securities and Exchange Commission’s web site (http://www.sec.gov).

The depositors’ annual reports on Form 10-K, the distribution reports on Form 10-D, current reports on Form 8-K and any amendments to those reports will be filed with the Securities and Exchange Commission (333-179292 and 333-179292-01).  These reports will be made available at www.ctslink.com as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Securities and Exchange Commission (the “SEC”) allows each depositor to “incorporate by reference” the information filed with the SEC by the depositor, under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, that relates to the issuing entity for the securities.  This means that the depositor can disclose important information to any investor by referring the investor to these documents.  The information incorporated by reference is an important part of this prospectus, and information filed by the depositor with the SEC that relates to the issuing entity for any series of securities will automatically update and supersede this information.  Documents that may be incorporated by reference for a particular series of securities include an insurer’s financial statements, a surety policy, mortgage pool policy, computational materials, collateral term sheets, the related agreement and amendments thereto, and other documents filed on Form 8-K and pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act as may be required in connection with the related issuing entity.

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Each depositor will provide or cause to be provided without charge to each person to whom this prospectus and accompanying prospectus supplement is delivered in connection with the offering of one or more classes of the related series of securities, on written or oral request of that person, a copy of any or all reports incorporated in this prospectus by reference, in each case to the extent the reports relate to one or more of the classes of the related series of securities, other than the exhibits to those documents, unless the exhibits are specifically incorporated by reference in the documents. Requests should be directed in writing to the Sponsor at One Belvedere Place, Suite 310, Mill Valley, California 94941.

RATING

It is a condition to the issuance of the securities of each series offered by this prospectus that at the time of issuance they will have been rated in one of the four highest rating categories by at least one nationally recognized statistical rating agency hired to rate them (the “hired NRSRO”).

Ratings on securities address the likelihood of the receipt by securityholders of their allocable share of principal and interest on the underlying mortgage loans.  These ratings address such factors as:

· structural and legal aspects associated with the securities;

·	the extent to which the payment stream on the underlying assets is adequate to make payments required by the securities; and
·	the credit quality of the credit enhancer or guarantor, if any.
Ratings on the securities do not, however, constitute a statement regarding:

· the likelihood of principal prepayments by borrowers;

· the degree by which the rate of prepayments made by borrowers might differ from that originally anticipated; or

· whether the yields originally anticipated by investors of any series of securities may be adversely affected as a result of those prepayments.

As a result, investors in securities of any series might suffer a lower than anticipated yield.

A rating on any or all of the securities of any series by a rating agency, if assigned at all, other than a hired NRSRO, may be lower than the rating or ratings assigned to the securities by the hired NRSRO.  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 hired NRSRO.  Each security rating should be evaluated independently of any other security rating.

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INDEX OF DEFINED TERMS

	Page No.
1986 Act		94
Bankruptcy Code		88
Bankruptcy Laws		88
CERCLA		85
CMT		25
Code		35, 94
COFI		26
Debt Security(s)		94
DOL		111
DTC		18
EPA		85
ERISA		35
Exchange Act		112
Garn-St. Germain Act		90
GPM fund		25
GPM loans		25
IRS		94, 95
LIBOR		25
LIBORSWAP		25
Lower Tier REMIC(s)		99
MTA		26
NCUA		116
Non-REMIC Debt Securities		94
OID		95
OID Regulations		94
OTS		90
Parity Act		90
Parties in Interest		111
Plans		111
Prime Rate		25
PTCE		112
RCRA		86
RRAC		20
Reigle Act		92
Relief Act		91
REMIC		33, 99
REMIC Regulations		94
REMIC Securities		94
RICO		93
RWT Holdings		19
SBJPA of 1996		103
SEC		119
SMMEA		116
Sponsor		19
Tax Prepayment Assumption		96
T-Bill		25
TILA		92
Title V		91
Trust Indenture Act		75
Upper Tier REMIC		99
U.S. Person		109

I-1

PART II – INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14.         OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Set forth below is an estimate of the amount of fees and expenses (other than underwriting discounts and commissions) to be incurred in connection with the issuance and distribution of the Offered Securities.

SEC Filing Fee	$	573
Trustee’s Fees and Expenses*
Legal Fees and Expenses*
Accounting Fees and Expenses*
Printing and Engraving Expenses*
Blue Sky Qualification and Legal Investment Fees and Expenses*
Rating Agency Fees*
Miscellaneous
TOTAL	$

       *   Estimated in accordance with Item 511 of Regulation S-K.

ITEM 15.          INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Indemnification. Under the laws which govern the organization of the registrant, each co-registrant has the power and in some instances may be required to provide an agent, including an officer or director, who was or is a party or is threatened to be made a party to certain proceedings, with indemnification against certain expenses, judgments, fines, settlements and other amounts under certain circumstances. Each co-registrant’s Amended and Restated Certificate of Incorporation and Bylaws provide for indemnification of directors and officers of the co-registrant to the fullest extent permitted by the laws which govern its organization. In addition, we have entered into indemnification agreements with our directors and certain of our officers and the directors of certain of our subsidiaries and affiliates which obligate us to indemnify them against certain losses relating to their service to us and the related costs of defense.

The form of the Underwriting Agreement, filed as Exhibit 1.1 to this Registration Statement, provides that the co-registrant will indemnify and reimburse the underwriter(s) and each controlling person of the underwriter(s) with respect to certain expenses and liabilities, including liabilities under the 1933 Act or other federal or state regulations or under the common law, which arise out of or are based on certain material misstatements or omissions in the Registration Statement. In addition, the Underwriting Agreement provides that the underwriter(s) will similarly indemnify and reimburse the co-registrant and its controlling persons with respect to certain material misstatements or omissions in the Registration Statement which are based on certain written information furnished by the underwriter(s) for use in connection with the preparation of the Registration Statement.

The form of the Agreements, filed as Exhibits 4.1 and 4.4 to this Registration Statement, provide that the co-registrant and its controlling persons will be entitled to indemnification by the related issuing entity and will be held harmless against any loss, liability or expense incurred in connection with any legal action relating to the Agreement or the securities for the related series, other than any loss, liability or expense related to any specific loan or loans (except any loss, liability or expense otherwise reimbursable pursuant to the Agreement) and any loss, liability or expense incurred by reason of willful misfeasance, bad faith or gross negligence in the performance of the indemnified party’s duties thereunder or by reason of reckless disregard by the indemnified party of obligations and duties thereunder.

The directors and officers of each co-registrant have entered into indemnification agreements with Redwood Trust, Inc. and are covered by a directors’ and officers’ liability insurance policy maintained by Redwood Trust, Inc. for the benefit of all of its subsidiaries.

ITEM 16.	EXHIBITS.
1.1	Form of Underwriting Agreement.***
3.1a	Restated Certificate of Incorporation of Sequoia Mortgage Funding Corporation.*
3.1b	Restated Certificate of Incorporation of Sequoia Residential Funding, Inc.*
4.1	Form of Indenture (Debt Bond form) in substantially the form to be entered into between the Issuer and the Indenture Trustee.
4.2	Form of Deposit Trust Agreement.**
4.3	Form of Master Servicing Agreement.***
4.4	Form of Pooling and Servicing Agreement.
4.5	Form of Mortgage Loan Purchase and Sale Agreement among Seller, Depositor and Issuer.
4.6	Form of Mortgage Loan Purchase and Sale Agreement between Seller and Depositor.
4.7	Form of Loan Servicing Agreement. ****
5.1	Opinion of Weintraub Genshlea Chediak Tobin & Tobin Law Corporation with respect to validity.  t
8.1	Opinion of Chapman and Cutler LLP with respect to tax matters. t
23.1	Consent of Weintraub Genshlea Chediak Tobin & Tobin Law Corporation (to be included in Exhibit 5.1). t
23.2	Consent of Chapman and Cutler LLP (to be included in Exhibit 8.1).  t
24.1	Powers of Attorney (included on pages II-6 and II-7). *****
25.1	Statement of Eligibility and Qualification of Trustee under the Trust Indenture Act of 1939 (to be filed pursuant to Section 305(b)(2) of the Trust Indenture Act of 1939).

*	Incorporation by reference to the correspondingly numbered exhibit to the Registration Statement on Form S-3 (333-90772) filed by the Co-registrants.
**	Incorporated by reference to the correspondingly numbered exhibit to the Registration Statement on Form S-3 (333-22681) filed by Co-registrant Sequoia Mortgage Funding Corporation.
***	Incorporated by reference to the correspondingly numbered exhibit to the Registration Statement on Form S-3 (333-132123) filed by the Co-registrants.
****	Incorporated by reference to the correspondingly numbered exhibit to the Registration Statement on Form S-3 (333-159791) filed by the Co-registrants.
*****	Previously filed.
t	To be filed by amendment

ITEM 17.         UNDERTAKINGS.

A.          Undertaking pursuant to Rule 415.

Each co-registrant hereby undertakes:

(1)          To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i)          To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii)         To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

(iii)        To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

Provided, however, That:

(A)         Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) (§230.424(b) of this chapter) that is part of the registration statement; and

(B)         Paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment is provided pursuant to Item 1100(c) of Regulation AB (§229.1100(c)).

(2)          That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)          To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)          That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

If the co-registrant is relying on Rule 430B (§230.430B of this chapter):

(A)         Each prospectus filed by the registrant pursuant to Rule 424(b)(3) (§230.424(b)(3) of this chapter) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

(B)         Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) (§230.424(b)(2), (b)(5), or (b)(7) of this chapter) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) (§230.415(a)(1)(i), (vii), or (x) of this chapter) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.

(5)          That, for the purpose of determining liability of the co-registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

Each of the undersigned co-registrants undertakes that in a primary offering of securities of the undersigned co-registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned co-registrant will be a seller to the purchaser and will be considered to offer or sell such securities to the purchaser:

(i)          Any preliminary prospectus or prospectus of the undersigned co-registrant relating to the offering required to be filed pursuant to Rule 424 (§230.424 of this chapter);

(ii)         Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned co-registrant or used or referred to by the undersigned registrant;

(iii)        The portion of any other free writing prospectus relating to the offering containing material information about the undersigned co-registrant or its securities provided by or on behalf of the undersigned co-registrant; and

(iv)        Any other communication that is an offer in the offering made by the undersigned co-registrant to the purchaser.

B.           Undertaking in respect of filings incorporating subsequent Exchange Act documents by reference.

Each of the undersigned co-registrants hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of each co-registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

E.           Undertaking in respect of qualification of trust indentures under the Trust Indenture Act of 1939 for delayed offerings.

Each co-registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of section 310 of the Trust Indenture Act (“Act”) in accordance with the rules and regulations prescribed by the Commission under section 305(b)(2) of the Act.

H.           Undertaking in respect of indemnification.

Insofar as indemnification for liabilities arising under the 1933 Act may be permitted to directors, officers and controlling persons of each co-registrant pursuant to the foregoing provisions, or otherwise, each co-registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by a co-registrant of expenses incurred or paid by a director, officer or controlling person of such co-registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the co-registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by them is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

I.            Undertaking pursuant to Rule 430A under the Securities Act of 1933:

Each of the undersigned co-registrants hereby undertakes that:

(1)         For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2)         For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

J.            Undertaking with respect to filings regarding asset-backed securities incorporating by reference subsequent Exchange Act documents by third parties.

Each of the co-registrants hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 of a third party that is incorporated by reference in the registration statement in accordance with Item 1100(c)(1) of Regulation AB (17 CFR 229.1100(c)(1)) shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

K.          Undertaking with respect to filings regarding asset-backed securities that provide certain information through an internet web site.

Each of the co-registrants hereby undertakes that, except as otherwise provided by Item 1105 of Regulation AB (17 CFR 229.1105), information provided in response to that Item pursuant to Rule 312 of Regulation S-T (17 CFR 232.312) through the specified Internet address in the prospectus is deemed to be a part of the prospectus included in the registration statement. In addition, each of the undersigned co-registrants hereby undertakes to provide to any person without charge, upon request, a copy of the information provided in response to Item 1105 of Regulation AB pursuant to Rule 312 of Regulation S-T through the specified Internet address as of the date of the prospectus included in the registration statement if a subsequent update or change is made to the information.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each co-registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Mill Valley, State of California, on the 1^st day of March, 2012.

SEQUOIA RESIDENTIAL FUNDING, INC.		SEQUOIA MORTGAGE FUNDING CORPORATION
By:	/s/ John H. Isbrandtsen	By:	/s/ John H. Isbrandtsen
	John H. Isbrandtsen Chief Executive Officer		John H. Isbrandtsen Chief Executive Officer

Each co-registrant reasonably believes that the security ratings to be assigned to the securities registered hereunder will make the securities “investment grade securities” pursuant to Transaction Requirement I.B.2 of Form S-3, prior to the sale of such securities.

Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John H. Isbrandtsen	Chairman of the Board, Chief Executive	March 1, 2012
John H. Isbrandtsen	Officer and Director
	(Principal Executive Officer)
/s/ Christopher J. Abate *	Controller and Vice President	March 1, 2012
Christopher J. Abate	(Principal Accounting Officer)
/s/ Harold F. Zagunis *	Vice President and Director	March 1, 2012
Harold F. Zagunis
/s/ Joseph G. Daher *	Director	March 1, 2012
Joseph G. Daher
/s/ Brett D. Nicholas *	Director	March 1, 2012
Brett D. Nicholas
/s/ Henry B. Pilger *	Director	March 1, 2012
Henry B. Pilger

*By:	/s/ John H. Isbrandtsen
	John H. Isbrandtsen
	Chairman of the Board, Chief Executive Officer
	and Director
	Attorney-in-fact

Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John H. Isbrandtsen	Chairman of the Board, Chief Executive	March 1, 2012
John H. Isbrandtsen	Officer and Director
	(Principal Executive Officer)
/s/ Christopher J. Abate *	Controller and Vice President	March 1, 2012
Christopher J. Abate	(Principal Accounting Officer)
/s/ Harold F. Zagunis *	Vice President and Director	March 1, 2012
Harold F. Zagunis
/s/ John Connolly IV *	Director	March 1, 2012
John Connolly IV
/s/ Brett D. Nicholas *	Director	March 1, 2012
Brett D. Nicholas
/s/ Craig A. Severance *	Director	March 1, 2012
Craig A. Severance

*By:	/s/ John H. Isbrandtsen
	John H. Isbrandtsen
	Chairman of the Board, Chief Executive Officer
	and Director
	Attorney-in-fact

EXHIBIT INDEX

Exhibit No.
1.1	Form of Underwriting Agreement.***
3.1a	Restated Certificate of Incorporation of Sequoia Mortgage Funding Corporation.*
3.1b	Restated Certificate of Incorporation of Sequoia Residential Funding, Inc. *
4.1	Form of Indenture (Debt Bond form) in substantially the form to be entered into between the Issuer and the Indenture Trustee.
4.2	Form of Deposit Trust Agreement.**
4.3	Form of Master Servicing Agreement. ***
4.4	Form of Pooling and Servicing Agreement.
4.5	Form of Mortgage Loan Purchase and Sale Agreement among Seller, Depositor and Issuer.
4.6	Form of Mortgage Loan Purchase and Sale Agreement between Seller and Depositor.
4.7	Form of Loan Servicing Agreement.****
5.1	Opinion of Weintraub Genshlea Chediak Tobin & Tobin Law Corporation with respect to validity.  t
8.1	Opinion of Chapman and Cutler LLP with respect to tax matters.  t
23.1	Consent of Weintraub Genshlea Chediak Tobin & Tobin Law Corporation (to be included in Exhibit 5.1). t
23.2	Consent of Chapman and Cutler LLP (to be included in Exhibit 8.1). t
24.1	Powers of Attorney (included on pages II-6 and II-7). *****
25.1	Statement of Eligibility and Qualification of Trustee under the Trust Indenture Act of 1939 (to be filed pursuant to Section 305(b)(2) of the Trust Indenture Act of 1939).

*	Incorporation by reference to the correspondingly numbered exhibit to the Registration Statement on Form S-3 (333-90772) filed by the Co-registrants.
**	Incorporated by reference to the correspondingly numbered exhibit to the Registration Statement on Form S-3 (333-22681) filed by Co-registrant Sequoia Mortgage Funding Corporation.
***	Incorporated by reference to the correspondingly numbered exhibit to the Registration Statement on Form S-3 (333-132123) filed by the Co-registrants.
****	Incorporated by reference to the correspondingly numbered exhibit to the Registration Statement on Form S-3 (333-159791) filed by the Co-registrants.
*****	Previously filed.
t	To be filed by amendment.

EX-4.1

Exhibit 4.1

SEQUOIA MORTGAGE TRUST 201_-_,

Issuer

and

_________________________________,

Trustee

INDENTURE

Dated as of _____________ __, 201__

Relating to

SEQUOIA MORTGAGE TRUST 201_-_

COLLATERALIZED MORTGAGE BONDS

Cross-reference sheet showing the location in the indenture of the provisions inserted pursuant to Sections 310 through 318(a) inclusive of the Trust Indenture Act of 1939.

TIA		Indenture Section
Section 310
	(a)     (1)	6.08
	(a)     (2)	6.09
	(a)     (3)	6.14(2)
	(a)     (4)	Not Applicable
	(a)     (5)	6.08
	(b)	6.08
		6.10
		11.05
	(c)	Not Applicable
Section 311
	(a)	6.13
	(b)	6.13
Section 312
	(a)	7.01(a)
		7.02(a)
	(b)	7.02(b)
	(c)	7.02(c)
Section 313
	(a)	7.03(a)
	(b)	7.03(a)
	(c)	7.03(a)
		11.05
	(d)	7.03(b)
Section 314
	(a)	7.04
		11.05
		3.10
	(b)     (1)	2.12(c)(viii)
	(b)     (2)	3.06
	(c)     (1)	2.12(d)
		4.01
		11.01
	(c)     (2)	2.12(c)(ii)
		4.01
		11.01
	(c)     (3)	1.01
		2.12(f)
	(d)     (1)	1.01
		8.12
	(d)     (2)	1.01
		Not Applicable
	(d)     (3)	1.01

i

		2.12(f)
	(e)	11.01
Section 315
	(a)	6.01(b)
		6.01(c)(1)
	(b)	6.02
		11.05
	(c)	6.01(a)
	(d)	6.01(c)
	(d)     (1)	6.01(b)
	(d)     (2)	6.01(c)(2)
	(d)     (3)	6.01(c)(3)
	(e)	5.16
Section 316
(a)	(1)    (A)	5.14
		8.01
(a)	(1)    (B)	5.15
(a)	(2)	Not Applicable
	(b)	5.10
	(c)	Not Applicable
Section 317
	(a)     (1)	5.03
	(a)     (2)	5.06
	(b)	3.03
Section 318
	(a)	11.07

ii

TABLE OF CONTENTS

PARTIES		1
PRELIMINARY STATEMENT		1
GRANTING CLAUSE		1
ARTICLE I	DEFINITIONS	2
SECTION 1.01.	GENERAL DEFINITIONS.	2
ARTICLE II	THE BONDS.	22
SECTION 2.01.	FORMS GENERALLY.	22
SECTION 2.02.	FORMS OF BONDS AND CERTIFICATE OF AUTHENTICATION.	23
SECTION 2.03.	BONDS ISSUABLE IN CLASSES; PROVISIONS WITH RESPECT TO PRINCIPAL AND INTEREST PAYMENTS.	23
SECTION 2.04.	DENOMINATIONS.	26
SECTION 2.05.	EXECUTION, AUTHENTICATION, DELIVERY AND DATING.	26
SECTION 2.06.	TEMPORARY BONDS.	27
SECTION 2.07.	REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.	27
SECTION 2.08.	MUTILATED, DESTROYED, LOST OR STOLEN BONDS.	28
SECTION 2.09.	PAYMENTS OF PRINCIPAL AND INTEREST.	28
SECTION 2.10.	PERSONS DEEMED OWNERS.	29
SECTION 2.11.	CANCELLATION.	30
SECTION 2.12.	AUTHENTICATION AND DELIVERY OF BONDS.	30
SECTION 2.13.	MATTERS RELATING TO BOOK ENTRY BONDS.	33
SECTION 2.14.	TERMINATION OF BOOK ENTRY SYSTEM.	34
SECTION 2.15.	ADDITIONAL BONDS.	34
ARTICLE III	COVENANTS.	35
SECTION 3.01.	PAYMENT OF BONDS.	35
SECTION 3.02.	MAINTENANCE OF OFFICE OR AGENCY.	35

iii

SECTION 3.03.	MONEY FOR BOND PAYMENTS TO BE HELD IN TRUST.	35
SECTION 3.04.	CORPORATE EXISTENCE OF OWNER TRUSTEE.	37
SECTION 3.05.	PROTECTION OF TRUST ESTATE.	37
SECTION 3.06.	OPINIONS AS TO TRUST ESTATE.	38
SECTION 3.07.	PERFORMANCE OF OBLIGATIONS; MASTER SERVICING AGREEMENT.	38
SECTION 3.08.	INVESTMENT COMPANY ACT.	39
SECTION 3.09.	NEGATIVE COVENANTS.	39
SECTION 3.10.	ANNUAL STATEMENT AS TO COMPLIANCE.	40
SECTION 3.11.	RECORDING OF ASSIGNMENTS.	40
SECTION 3.12.	LIMITATION OF LIABILITY OF SATISFACTION AND DISCHARGE.	40
ARTICLE IV		41
SECTION 4.01.	SATISFACTION AND DISCHARGE OF INDENTURE.	41
SECTION 4.02.	APPLICATION OF TRUST MONEY.	42
ARTICLE V	DEFAULTS AND REMEDIES.	42
SECTION 5.01.	EVENT OF DEFAULT.	42
SECTION 5.02.	ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.	43
SECTION 5.03.	COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.	44
SECTION 5.04.	REMEDIES.	45
SECTION 5.05.	[RESERVED].	45
SECTION 5.06.	TRUSTEE MAY FILE PROOFS OF CLAIM.	45
SECTION 5.07.	TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF BONDS.	46
SECTION 5.08.	APPLICATION OF MONEY COLLECTED.	46
SECTION 5.09.	LIMITATION ON SUITS.	46
SECTION 5.10.	UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL AND INTEREST.	47
SECTION 5.11.	RESTORATION OF RIGHTS AND REMEDIES.	47
SECTION 5.12.	RIGHTS AND REMEDIES CUMULATIVE.	47
SECTION 5.13.	DELAY OR OMISSION NOT WAIVER.	47

iv

SECTION 5.14.	CONTROL BY BONDHOLDERS.	48
SECTION 5.15.	WAIVER OF PAST DEFAULTS.	48
SECTION 5.16.	UNDERTAKING FOR COSTS.	48
SECTION 5.17.	WAIVER OF STAY OR EXTENSION LAWS.	49
SECTION 5.18.	SALE OF TRUST ESTATE.	49
SECTION 5.19.	ACTION ON BONDS.	50
ARTICLE VI	THE TRUSTEE	50
SECTION 6.01.	DUTIES OF TRUSTEE.	50
SECTION 6.02.	NOTICE OF DEFAULT.	52
SECTION 6.03.	RIGHTS OF TRUSTEE.	52
SECTION 6.04.	NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF BONDS.	53
SECTION 6.05.	MAY HOLD BONDS.	53
SECTION 6.06.	MONEY HELD IN TRUST.	54
SECTION 6.07.	COMPENSATION AND REIMBURSEMENT.	54
SECTION 6.08.	ELIGIBILITY; DISQUALIFICATION.	55
SECTION 6.09.	TRUSTEE’S CAPITAL AND SURPLUS.	55
SECTION 6.10.	RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.	55
SECTION 6.11.	ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.	56
SECTION 6.12.	MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS OF TRUSTEE.	56
SECTION 6.13.	PREFERENTIAL COLLECTION OF CLAIM AGAINST ISSUER.	57
SECTION 6.14.	CO-TRUSTEES AND SEPARATE TRUSTEES.	57
SECTION 6.15.	AUTHENTICATING AGENTS.	58
SECTION 6.17.	PAYMENT OF CERTAIN INSURANCE PREMIUMS.	59
SECTION 6.18.	SUBSTITUTION OF INSURANCE POLICIES, ETC.; NOTIFICATION OF RATING AGENCIES.	59
ARTICLE VII	BONDHOLDERS’ LISTS AND REPORTS	60
SECTION 7.01.	ISSUER TO FURNISH TRUSTEE NAMES AND ADDRESSES OF BONDHOLDERS.	60
SECTION 7.02.	RESERVATION OF INFORMATION; COMMUNICATIONS TO BONDHOLDERS.	60

v

SECTION 7.03.	REPORTS BY TRUSTEE.	60
SECTION 7.04.	REPORTS BY ISSUER.	61
SECTION 7.05.	NOTICE TO THE RATING AGENCIES [AND TO BOND INSURER.]	61
ARTICLE VIII	ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES	61
SECTION 8.01.	COLLECTION OF MONEYS.	61
SECTION 8.02.	DISTRIBUTION ACCOUNT.	62
SECTION 8.03.	GENERAL PROVISIONS REGARDING PLEDGED ACCOUNTS.	62
SECTION 8.04.	PURCHASES OF DEFECTIVE PLEDGED MORTGAGES.	63
SECTION 8.05.	GRANT OF REPLACEMENT PLEDGED MORTGAGE.	64
SECTION 8.06.	REPORTS BY TRUSTEE TO BONDHOLDERS.	64
SECTION 8.07.	PREPARATION AND FILING OF REPORTS with the SEC	66
SECTION 8.08.	TRUSTEE’S ANNUAL STATEMENT OF COMPLIANCE.	70
SECTION 8.09.	TRUSTEE’S ASSESSMENT OF COMPLIANCE AND ATTESTATION REPORT.	70
SECTION 8.10.	OTHER REPORTS BY TRUSTEE.	71
SECTION 8.11.	TRUST ESTATE; RELEASE AND DELIVERY OF MORTGAGE DOCUMENTS.	71
SECTION 8.09.	AMENDMENTS TO THE MASTER SERVICING AGREEMENT.	72
SECTION 8.10.	SERVICERS AND MASTER SERVICER AS AGENTS AND BAILEES OF TRUSTEE.	72
SECTION 8.11.	OPINION OF COUNSEL.	73
SECTION 8.12.	RELEASE OF PLEDGED MORTGAGES.	73
ARTICLE IX	SUPPLEMENTAL INDENTURES	74
SECTION 9.01.	SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS.	74
SECTION 9.02.	SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS.	75
SECTION 9.03.	EXECUTION OF SUPPLEMENTAL INDENTURES.	76
SECTION 9.04.	EFFECT OF SUPPLEMENTAL INDENTURES.	76
SECTION 9.05.	CONFORMITY WITH TRUST INDENTURE ACT.	76
SECTION 9.06.	REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES.	76
SECTION 9.07.	AMENDMENTS TO DEPOSIT TRUST AGREEMENT OR MASTER SERVICING AGREEMENT.	77

vi

ARTICLE X	REDEMPTION OF BONDS	77
SECTION 10.01.	SPECIAL REDEMPTION; REDEMPTION.	77
SECTION 10.02.	FORM OF REDEMPTION NOTICE.	78
SECTION 10.03.	BONDS PAYABLE ON OPTIONAL REDEMPTION DATE.	78
ARTICLE XI	MISCELLANEOUS	78
SECTION 11.01.	COMPLIANCE CERTIFICATES AND OPINIONS.	78
SECTION 11.02.	FORM OF DOCUMENTS DELIVERED TO TRUSTEE.	79
SECTION 11.03.	ACTS OF BONDHOLDERS.	80
SECTION 11.04.	NOTICES, ETC. TO TRUSTEE AND ISSUER.	80
SECTION 11.05.	NOTICES AND REPORTS TO BONDHOLDERS; WAIVER OF	81
SECTION 11.06.	RULES BY TRUSTEE AND AGENTS.	81
SECTION 11.07.	CONFLICT WITH TRUST INDENTURE ACT.	81
SECTION 11.08.	EFFECT OF HEADINGS AND TABLE OF CONTENTS.	81
SECTION 11.09.	SUCCESSORS AND ASSIGNS.	82
SECTION 11.11.	BENEFITS OF INDENTURE.	82
SECTION 11.12.	LEGAL HOLIDAYS.	82
SECTION 11.13.	GOVERNING LAW.	82
SECTION 11.14.	COUNTERPARTS.	82
SECTION 11.15.	RECORDING OF INDENTURE.	82
SECTION 11.16.	ISSUER OBLIGATION.	82
SECTION 11.17.	INSPECTION.	83
SECTION 11.18.	USURY.	83
SECTION 11.19.	NO PETITION.	83
ARTICLE XII	THE BOND INSURER.	83
SECTION 12.01.	CERTAIN MATTERS REGARDING THE BOND INSURER AND THE BOND INSURANCE POLICY.	83

vii

EXHIBITS

EXHIBIT I	LETTER AGREEMENT WITH THE DEPOSITORY	i-1
EXHIBIT II	FORM OF SENIOR BOND	ii-1
EXHIBIT III	FORM OF A CLASS [B-1] BOND	iii-1
EXHIBIT IV	FORM OF A CLASS [B-2] BOND	iv-1
EXHIBIT V	FORM OF BOND INSURANCE POLICY	v-1
EXHIBIT VI	FORM OF CERTIFICATION TO BE PROVIDED TO MANAGER BY THE TRUSTEE	vi-1
EXHIBIT VII	SERVICING CRITERIA	vii-1
EXHIBIT VIII	ADDITIONAL FORM 10-D DISCLOSURE	viii
EXHIBIT IX	ADDITIONAL FORM 10-K DISCLOSURE	ix
EXHIBIT X	FORM 8-K DISCLOSURE information	x

viii

PARTIES

INDENTURE, dated as of ___________ ___, 201__ (as amended or supplemented from time to time as permitted hereby, the “Indenture”), between Sequoia Mortgage Trust 201_-_ (herein, together with its permitted successors and assigns, called the “Issuer”), a statutory business trust created under the Deposit Trust Agreement (as defined herein), and _____________________________, a _____________ corporation, as trustee (together with its permitted successors in the trusts hereunder, the “Trustee”).

PRELIMINARY STATEMENT

The Issuer has duly authorized the execution and delivery of this Indenture to provide for its Collateralized Mortgage Bonds, (the “Bonds”), issuable as provided in this Indenture. All covenants and agreements made by the Issuer herein are for the benefit and security of the Holders of the Bonds. The Issuer is entering into this Indenture, and the Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

All things necessary to make this Indenture a valid agreement of the Issuer in accordance with its terms have been done.

GRANTING CLAUSE

The Issuer hereby Grants to the Trustee, for the exclusive benefit of the Holders of the Bonds [and the Bond Insurer], all of the Issuer’s right, title and interest in and to (a) the Pledged Mortgages identified in Schedule A to this Indenture, including the related Mortgage Documents, which the Issuer has caused to be delivered to the Trustee herewith, and all interest and principal received or receivable by the Issuer on or with respect to the Pledged Mortgages after the Cut-Off Date and all interest and principal payments on the Pledged Mortgages received prior to the Cut-off Date in respect of installments of interest and principal due thereafter, but not including payments of interest and principal due and payable on the Pledged Mortgages on or before the Cut-off Date, and all other proceeds received in respect of such Pledged Mortgages, (b) the Issuer’s rights under the Master Servicing Agreement, (c) the Insurance Policies, (d) all cash, instruments or other property held or required to be deposited in the Bond Account or the Distribution Account (exclusive of any earnings on investments made with funds deposited in the Distribution Account or the Bond Account) and (e) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other liquid assets, including, without limitation, all Insurance Proceeds, Liquidation Proceeds and condemnation awards. Such Grants are made, however, in trust, to secure the Bonds equally and ratably without prejudice, priority or distinction between any Bond and any other Bond by reason of difference in time of issuance or otherwise, and to secure (i) the payment of all amounts due on the Bonds in accordance with their terms, (ii) the payment of all other sums payable under this Indenture with respect to the Bonds and (iii) compliance with the provisions of this Indenture, all as provided in this Indenture. All terms used in the foregoing granting clauses that are defined in Section 1.01 are used with the meanings given in said Section.

The Trustee acknowledges such Grant, accepts the trusts hereunder in accordance with the provisions of this Indenture and agrees to perform the duties herein required to the best of its ability to the end that the interests of the Holders of the Bonds [and the Bond Insurer] may be adequately and effectively protected.

[The Trustee agrees that it will hold any proceeds of any claim made upon the Bond Insurance Policy, solely for the use and benefit of the Bondholders in accordance with the terms hereof and of the Bond Insurance Policy.]

1

ARTICLE I

DEFINITIONS

SECTION 1.01. GENERAL DEFINITIONS.

Except as otherwise specified or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Indenture, and the definitions of such terms are applicable to the singular as well as to the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Whenever reference is made herein to an Event of Default or a Default known to the Trustee or of which the Trustee has notice or knowledge, such reference shall be construed to refer only to an Event of Default or Default of which the Trustee is deemed to have notice or knowledge pursuant to Section 6.01(d). All other terms used herein which are defined in the Trust Indenture Act (as hereinafter defined), either directly or by reference therein, have the meanings assigned to them therein.

“ACCOUNTANT”: A Person engaged in the practice of accounting who (except when this Indenture provides that an Accountant must be Independent) may be employed by or affiliated with the Issuer or an Affiliate of the Issuer.

“ACCRUAL DATE”: The date upon which interest begins accruing on the Bonds, such date being ____________ ___, 201__.

“ACT”: With respect to any Bondholder, as defined in Section 11.03.

“ADDITIONAL FORM 10-D DISCLOSURE”: As defined in Section 8.07(a)(i).

“ADDITIONAL FORM 10-K DISCLOSURE”: As defined in Section 8.07(b)(i).

“ADDITIONAL MORTGAGE COLLATERAL”: Pledged Mortgages pledged to the Trustee following the Closing Date in connection with the issuance of Additional Bonds pursuant to Section [___] hereof, provided that following such pledge, aggregate Pledged Mortgages then pledged to secure the Bonds are within the following parameters: (i) the percentage of the Pledged Mortgages which are [fixed interest rate] mortgage loans will not exceed __%, (ii) the percentage of Pledged Mortgages which are [adjustable rate] mortgage loans will not exceed __%, (iii) the percentage of Pledged Mortgages that contain “due-on-sale” clauses will not exceed __%, (iv) the percentage of Pledged Mortgages secured by investor properties will not exceed __%, (v) the weighted average original Loan-to-Value Ratio of the Pledged Mortgages will not exceed __%, (vi) the percentage of Pledged Mortgages originated pursuant to a “limited documentation” program will not exceed __%, (vii) the percentage of Pledged Mortgages having an original Loan-to-Value Ratio in excess of 80% that will be covered by a primary mortgage loan insurance policy will equal at least __%, (viii) the percentage of Pledged Mortgages which are cash-out refinance mortgages will not exceed __% and (ix) the percentage of Pledged Mortgages that are delinquent by one or more scheduled payments will not exceed __%.

“ADDITIONAL SERVICER:” Each affiliate of a Servicer that Services any of the Mortgage Loans and each Person who is not an affiliate of any Servicer, who Services 10% or more of the Mortgage Loans.

“ADJUSTED NET MORTGAGE RATE”: As to each Pledged Mortgage and at any time, the per annum rate equal to the Mortgage Rate less the sum of the Master Servicing Fee Rate and the related Servicing Fee Rate.

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“ADJUSTMENT DATE”: As to any Pledged Mortgage, the date on which the related Mortgage Rate adjusts [annually] after a period of ___ year[s] following origination, in accordance with the terms of the related Mortgage Note.

“ADVANCE”: The payment required to be made by the Master Servicer with respect to any Payment Date pursuant to Section 4 of the Master Servicing Agreement, the amount of any such payment being equal to the aggregate of the payments of principal and interest (net of the Master Servicing Fee and the applicable Servicing Fee and net of any net income in the case of any REO Property) on the Pledged Mortgages that were due on the related Due Date and not received as of the close of business on the related Determination Date, less the aggregate amount of any such delinquent payments that the Master Servicer has determined would constitute a Nonrecoverable Advance if advanced.

“AFFILIATE”: With respect to any Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“AGENT”: Any Bond Registrar, Paying Agent or Authenticating Agent.

“APPRAISED VALUE”: With respect to any Pledged Mortgage, the Appraised Value of the related Mortgaged Property shall be: (i) with respect to a Pledged Mortgage other than a Refinancing Pledged Mortgage, the lesser of (a) the value of the Mortgaged Property based upon the appraisal made at the time of the origination of such Pledged Mortgage and (b) the sales price of the Mortgaged Property at the time of the origination of such Pledged Mortgage; (ii) with respect to a Refinancing Pledged Mortgage, the value of the Mortgaged Property based upon the appraisal made at the time of the origination of such Refinancing Pledged Mortgage.

“ASSIGNMENTS”: Collectively (i) the original instrument of assignment of a Mortgage, including any interim assignments from the originator or any other holder of any Pledged Mortgage, and (ii) the original instrument of assignment of such Mortgage, made by the Issuer to the Trustee (which in either case may, to the extent permitted by the laws of the state in which the related Mortgaged Property is located, be a blanket instrument of assignment covering other Mortgages as well and which may also, to the extent permitted by the laws of the state in which the related Mortgaged Property is located, be an instrument of assignment running directly from the mortgagee of record under the related Mortgage to the Trustee).

“AUTHENTICATING AGENT”: The Person, if any, appointed as Authenticating Agent by the Trustee at the request of the Issuer pursuant to Section 6.15, until any successor Authenticating Agent for the Bonds is named, and thereafter “Authenticating Agent” shall mean such successor.

“AUTHORIZED OFFICER”: Any officer of the Owner Trustee who is authorized to act for the Owner Trustee in respect of the Issuer and whose name appears on a list of such authorized officers furnished by the Owner Trustee to the Trustee, as such list may be amended or supplemented from time to time, and any officer of the Issuer who is authorized to act pursuant to the Deposit Trust Agreement and whose name appears on a list furnished by the Depositor to the Owner Trustee and the Trustee, as such list may be amended or supplemented from time to time.

“AVAILABLE FUNDS”: As defined in Section 1 of the Master Servicing Agreement.

“BACK-UP CERTIFICATION”: the certification as defined in Section 8.07(e).

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“BANK”: ________________________, a Delaware banking corporation, in its individual capacity and not as Owner Trustee.

“BANKRUPTCY CODE”: The United States Bankruptcy Reform Act of 1978, as amended.

“BENEFICIAL OWNER”: With respect to a Book Entry Bond, the Person who is the beneficial owner of such Book Entry Bond.

“BOND ACCOUNT”: The separate Eligible Account or Accounts created and maintained by the Master Servicer pursuant to Section 3(h)(v) of the Master Servicing Agreement with a depository institution in the name of the Master Servicer for the benefit of the Trustee on behalf of Bondholders and designated “Sequoia Mortgage Holdings, Inc. in trust for the registered holders of Sequoia Mortgage Trust 201_-_ Collateralized Mortgage Bonds, Series 201_-_”.

“BOND DISTRIBUTION AMOUNT”: As to any Payment Date, an amount equal to the sum of (i) the Senior Interest Payment Amount, (ii) the Senior Principal Payment Amount, (iii) the Class [B-1] Interest Payment Amount, (iv) the Class [B-1] Principal Payment Amount, (v) the Class [B-2] Interest Payment Amount and (vi) the Class [B-2] Principal Payment Amount.

“BOND PAYMENT AMOUNT”: As to any Payment Date, an amount equal to the sum of (i) the Senior Interest Payment Amount, (ii) the Senior Principal Payment Amount, (iii) the Class [B-1] Interest Payment Amount, (iv) the Class [B-1] Principal Payment Amount, (v) the Class [B-2] Interest Payment Amount and (vi) the Class [B-2] Principal Payment Amount, in each case for such Payment Date.

“BONDHOLDER” OR “HOLDER”: The Person in whose name a Bond is registered in the Bond Register.

“BOND INSURANCE POLICY”: Any financial guaranty insurance policy covering any Bonds or Class of Bonds of any Series.

“BOND INSURER”: The issuer of any Bond Insurance Policy.

“BOND INTEREST RATE”: The Senior Bond Interest Rate, the Class [B-1] Bond Interest Rate or the Class [B-2] Bond Interest Rate, as applicable.

“BOND REGISTER” AND “BOND REGISTRAR”: As defined in Section 2.07.

“BONDS”: Any bonds authorized by, and authenticated and delivered under, this Indenture.

“BOOK ENTRY BONDS”: The Bonds shall be registered in the name of the Depository or its nominee, ownership of which is reflected on the books of the Depository or on the books of a Person maintaining an account with such Depository (directly or as an indirect participant in accordance with the rules of such Depository).

“BUSINESS DAY”: Any day other than (i) a Saturday or a Sunday, or (ii) a day on which banking institutions in the City of New York, New York or the State of California or the city in which the Corporate Trust Office of the Trustee is located are authorized or obligated by law or executive order to be closed.

“CERTIFICATE INTEREST RATE”: As defined in Section 1 of the Master Servicing Agreement.

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“CLASS”: Collectively, all of the Bonds bearing the same class designation. The Bonds are divided into Classes as provided in Section 2.03.

“CLASS [B-1] INTEREST CARRYOVER SHORTFALL”: The amount by which sum of (i) the interest at the Class [B-1] Bond Interest Rate on the Class [B-1] Principal Amount and (ii) the interest at the Class [B-1] Bond Interest Rate on any Class [B-1] Principal Carryover Shortfall, on each prior Payment Date, exceeded the amount actually distributed as interest on such prior Payment Dates and not subsequently distributed.

“CLASS [B-1] BOND INTEREST RATE”: With respect to any Interest Accrual Period, the annual rate at which interest accrues on the Class [B-1] Bonds as specified in such Bonds and in Section 2.03(c).

“CLASS [B-1] INTEREST PAYMENT AMOUNT”: As to any Payment Date, the sum of (i) interest at the Class [B-1] Bond Interest Rate on the Class [B-1] Principal Amount, (ii) interest at the Class [B-1] Bond Interest Rate on any Class [B-1] Principal Carryover Shortfall, (iii) the Class [B-1] Interest Carryover Shortfall and (iv) interest at the Class [B-1] Bond Interest Rate on any Class [B-1] Interest Carryover Shortfall.

“CLASS [B-1] PERCENTAGE”: As to any Payment Date, the percentage equivalent of a fraction the numerator of which is the Class [B-1] Principal Amount immediately prior to such date and the denominator of which is the sum of (i) the Senior Class Principal Amount, (ii) the Class [B-1] Principal Amount, (iii) the Class [B-2] Principal Amount and (iv) the Invested Amount, in each case immediately prior to such date.

“CLASS [B-1] PRINCIPAL AMOUNT”: As to any Payment Date is the lesser of (i) the aggregate of the Stated Principal Balances of the Pledged Mortgages, less the Senior Class Principal Amount immediately prior to such date, and (ii) the Original Class [B-1] Principal Amount reduced by all amounts previously distributed to holders of the Class [B-1] Bonds as payments of principal.

“CLASS [B-1] PRINCIPAL CARRYOVER SHORTFALL”: As to any Payment Date, the excess of (i) the Original Class [B-1] Principal Amount reduced by all amounts previously distributed to holders of the Class [B-1] Bonds as payments of principal or Class [B-1] Principal Carryover Shortfall, over (ii) the Class [B-1] Principal Amount immediately prior to such date.

“CLASS [B-1] PRINCIPAL PAYMENT AMOUNT”: As to any Payment Date, the sum of (i) the Class [B-1] Percentage of the sum of (a) the principal portion of the Schedules Payment due on each Pledged Mortgage [on the related Due Date], (b) the principal portion of the purchase price of each Pledged Mortgage that was purchased by [__________] or another person pursuant to the Mortgage Loan Purchase Agreement [or by the Master Servicer in connection with any optional purchase by the Master Servicer of a defaulted Pledged Mortgage] as of such Payment Date, (c) the Substitution Adjustment Amount in connection with any Deleted Pledged Mortgage received with respect to such Payment Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of principal of Pledged Mortgages that are not yet Liquidated Pledged Mortgages received during the [calendar month] preceding the month of such Payment Date, (e) with respect to each Pledged Mortgage that became a Liquidated Pledged Mortgage during the [calendar month] preceding the month of such Payment Date, the Stated Principal Balance of such Pledged Mortgage and (f) all partial and full principal prepayments by borrowers received during the related Prepayment Period and (ii) any Class [B-1] Principal Carryover Shortfall.

“CLASS [B-2] BOND INTEREST RATE”: With respect to any Interest Accrual Period, the annual rate at which interest accrues on the Class [B-2] Bonds as specified in such Bonds and in Section 2.03(c).

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“CLASS [B-2] INTEREST CARRYOVER SHORTFALL”: The amount by which sum of (i) the interest at the Class [B-2] Bond Interest Rate on the Class [B-2] Principal Amount and (ii) the interest at the Class [B-2] Bond Interest Rate on any Class [B-2] Principal Carryover Shortfall, on each prior Payment Date, exceeded the amount actually distributed as interest on such prior Payment Dates and not subsequently distributed.

“CLASS [B-2] INTEREST PAYMENT AMOUNT”: As to any Payment Date, the sum of (i) interest at the Class [B-2] Bond Interest Rate on the Class [B-2] Principal Amount, (ii) interest at the Class [B-2] Bond Interest Rate on any Class [B-2] Principal Carryover Shortfall, (iii) the Class [B-2] Interest Carryover Shortfall and (iv) interest at the Class [B-2] Bond Interest Rate on any Class [B-2] Interest Carryover Shortfall.

“CLASS [B-2] PERCENTAGE”: As to any Payment Date, the percentage equivalent of a fraction the numerator of which is the Class [B-2] Principal Amount immediately prior to such date and the denominator of which is the sum of (i) the Senior Class Principal Amount, (ii) the Class [B-1] Principal Amount, (iii) the Class [B-2] Principal Amount and (iv) the Invested Amount, in each case immediately prior to such date.

“CLASS [B-2] PRINCIPAL AMOUNT”: As to any Payment Date is the lesser of (i) the aggregate of the Stated Principal Balances of the Pledged Mortgages, less the sum of the Senior Class Principal Amount and the Class [B-1] Principal Amount, in each case immediately prior to such date, and (ii) the Original Class [B-2] Principal Amount reduced by all amounts previously distributed to holders of the Class [B-2] Bonds as payments of principal.

“CLASS [B-2] PRINCIPAL CARRYOVER SHORTFALL”: As to any Payment Date, the excess of (i) the Original Class [B-2] Principal Amount reduced by all amounts previously distributed to holders of the Class [B-2] Bonds as payments of principal or Class [B-2] Principal Carryover Shortfall, over (ii) the Class [B-2] Principal Amount immediately prior to such date.

“CLASS [B-2] PRINCIPAL PAYMENT AMOUNT”: As to any Payment Date, the sum of (i) the Class [B-2] Percentage of the sum of (a) the principal portion of the Scheduled Payment due on each Pledged Mortgage [on the related Due Date], (b) the principal portion of the purchase price of each Pledged Mortgage that was purchased by [____________]or another person pursuant to the Mortgage Loan Purchase Agreement [or by the Master Servicer in connection with any optional purchase by the Master Servicer of a defaulted Pledged Mortgage] as of such Payment Date, (c) the Substitution Adjustment Amount in connection with any Deleted Pledged Mortgage received with respect to such Payment Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of principal of Pledged Mortgages that are not yet Liquidated Pledged Mortgages received during the [calendar month] preceding the month of such Payment Date, (e) with respect to each Pledged Mortgage that became a Liquidated Pledged Mortgage during the [calendar month] preceding the month of such Payment Date, the Stated Principal Balance of such Pledged Mortgage and (f) all partial and full principal prepayments by borrowers received during the related Prepayment Period and (ii) any Class [B-2] Principal Carryover Shortfall.

“CLASS INTEREST SHORTFALL”: As to any Payment Date, the Senior Interest Shortfall, the Class [B-1] Interest Carryover Shortfall or the Class [B-2] Interest Carryover Shortfall, as applicable.

“CLASS PRINCIPAL AMOUNT”: The Senior Class Principal Amount, the Class [B-1] Principal Amount or the Class [B-2] Principal Amount, as applicable.

“CLOSING DATE”: ____________ ___, 201__.

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“CODE”: The Internal Revenue Code of 1986, including any successor or amendatory provisions.

“COMMISSION”: Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or if at any time such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time under the Trust Indenture Act or similar legislation replacing the Trust Indenture Act.

“CONTROLLING CLASS”: The Class [A-1] Bonds or, if the Class [A-1] Bonds are no longer Outstanding, the most senior Class of Subordinated Bonds then Outstanding.

“COOPERATIVE LOAN”: As defined in Section 1 of the Master Servicing Agreement.

“COOPERATIVE SHARES”: As defined in Section 1 of the Master Servicing Agreement.

“CORPORATE TRUST OFFICE”: The principal corporate trust office of the Trustee located at ____________________________________________________, or at such other address as the Trustee may designate from time to time by notice to the Bondholders and the Issuer, or the principal corporate trust office of any successor Trustee.

“CUT-OFF DATE”: _____________ ___, 201__.

“DEBT SERVICE REDUCTION”: With respect to any Pledged Mortgage, a reduction by a court of competent jurisdiction in a proceeding under the Bankruptcy Code in the Scheduled Payment for such Pledged Mortgage which became final and non-appealable, except such a reduction resulting from a Deficient Valuation or any reduction that results in a permanent forgiveness of principal.

“DEFAULT”: Any occurrence which is, or with notice or the lapse of time or both would become, an Event of Default.

“DEFAULTED PLEDGED MORTGAGE”: The meaning specified in Section 8.04(e).

“DEFICIENT VALUATION”: With respect to any Pledged Mortgage, a valuation by a court of competent jurisdiction of the Mortgaged Property in an amount less than the then outstanding indebtedness under the Pledged Mortgage, or any reduction in the amount of principal to be paid in connection with any Scheduled Payment that results in a permanent forgiveness of principal, which valuation or reduction results from an order of such court which is final and non-appealable in a proceeding under the Bankruptcy Code.

“DEFINITIVE BONDS”: Bonds other than Book Entry Bonds.

“DELETED PLEDGED MORTGAGE”: As defined in Section 5 of the Master Servicing Agreement.

“DENOMINATION”: With respect to each Bond, the amount set forth on the face thereof as the “Initial Principal Amount of this Bond”.

“DEPOSITOR”: [_________________], a Delaware corporation.

“DEPOSITORY”: The initial Depository with respect to each Class of Book Entry Bonds shall be The Depository Trust Company of New York, the nominee for which is Cede & Co. The Depository shall at all times be a “clearing corporation” as defined in Section 8-102(3) of the Uniform Commercial Code of the State of New York.

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“DEPOSITORY PARTICIPANTS”: A broker, dealer, bank or other financial institution or other Person for whom from time to time a Depository effects book-entry transfers and pledges of securities deposited with the Depository.

“DEPOSIT TRUST AGREEMENT”: The Amended and Restated Deposit Trust Agreement, dated as of ____________ _ _, 201__, between the Bank and the Depositor, creating the Issuer, as such Deposit Trust Agreement may be amended or supplemented from time to time.

“DEPOSITOR”: [________________], a Delaware corporation, or its successors-in-interest.

“DETERMINATION DATE”: As to any Payment Date, the ___th day of each month or if such ___th day is not a Business Day the next succeeding Business Day; provided, however, that if such next succeeding Business Day is less than two Business Days prior to the related Payment Date, then the Determination Date shall be the next Business Day preceding the ___th day of such month.

“DISTRIBUTION ACCOUNT”: The separate Eligible Account created and maintained by the Trustee pursuant to Section 8.02 in the name of the Trustee for the benefit of the Bondholders and designated “____________________ in trust for registered holders of Sequoia Mortgage Trust 201_-_, Collateralized Mortgage Bonds. Funds in the Distribution Account shall be held in trust for the Bondholders for the uses and purposes set forth in this Indenture.

“DISTRIBUTION ACCOUNT DEPOSIT DATE”: As to any Payment Date, [12:30 p.m. Pacific time] on the Business Day immediately preceding such Payment Date.

“DUE DATE”: The first day of each month.

[“DUFF & PHELPS”: Duff & Phelps Credit Rating Company, or any successor thereto. For purposes of Section 11.04 the address for notices to Duff & Phelps shall be Duff & Phelps Credit Rating Company, 55 E. Monroe Street, 35th Floor, Chicago, Illinois 60603, Attention: MBS Monitoring, or such other address as Duff & Phelps may hereafter furnish to the Issuer and the Master Servicer.]

“ELIGIBLE ACCOUNT”: Any of (i) an account or accounts maintained with a federal or state chartered depository institution or trust company the short-term unsecured debt obligations of which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding company, the debt obligations of such holding company) have the highest short-term ratings of each Rating Agency at the time any amounts are held on deposit therein, or (ii) an account or accounts in a depository institution or trust company in which such accounts are insured by the FDIC or the SAIF (to the limits established by the FDIC or the SAIF) and the uninsured deposits in which accounts are otherwise secured such that, as evidenced by an Opinion of Counsel delivered to the Trustee and to each Rating Agency, the Bondholders have a claim with respect to the funds in such account or a perfected first priority security interest against any collateral (which shall be limited to Permitted Investments) securing such funds that is superior to claims of any other depositors or creditors of the depository institution or trust company in which such account is maintained, or (iii) a trust account or accounts maintained with the trust department of a federal or state chartered depository institution or trust company, acting in its fiduciary capacity or (iv) any other account acceptable to each Rating Agency. Eligible Accounts may bear interest, and may include, if otherwise qualified under this definition, accounts maintained with the Trustee.

“ESCROW ACCOUNT”: As defined in Section 1 of the Master Servicing Agreement.

“EVENT OF DEFAULT”: The meaning specified in Section 5.01.

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“EXPENSE RATE”: As to each Pledged Mortgage, the sum of the related Servicing Fee Rate, the Master Servicing Fee Rate and Trustee Fee Rate.

“FDIC”: The Federal Deposit Insurance Corporation, or any successor thereto.

“FHLMC”: The Federal Home Loan Mortgage Corporation, a corporate instrumentality of the United States created and existing under Title III of the Emergency Home Finance Act of 1970, as amended, or any successor thereto.

“FIRREA”: The Financial Institutions Reform, Recovery and Enforcement Act of 1989.

[“FITCH”: Fitch Investors Service, L.P., or any successor thereto. For purposes of Section 11.04 the address for notices to Fitch shall be Fitch Investors Service, L.P., One State Street Plaza, New York, New York 10004, Attention: Residential Mortgage Surveillance Group, or such other address as Fitch may hereafter furnish to the Issuer and the Master Servicer.]

“FNMA”: The Federal National Mortgage Association, a federally chartered and privately owned corporation organized and existing under the Federal National Mortgage Association Charter Act, or any successor thereto.

“FORM 8-K DISCLOSURE INFORMATION”: as defined in Section 8.07(c)(i).

“GRANT”: To grant, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, mortgage, pledge, create and grant a security interest in, deposit, set-over and confirm. A Grant of a Pledged Mortgage and related Mortgage Documents, a Permitted Investment, the Master Servicing Agreement, an Insurance Policy, or any other instrument shall include all rights, powers and options (but none of the obligations) of the Granting party thereunder, including, without limitation, the immediate and continuing right to claim for, collect, receive and give receipts for principal and interest payments thereunder, Insurance Proceeds, condemnation awards, purchase prices and all other moneys payable thereunder and all proceeds thereof, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the Granting party or otherwise, and generally to do and receive anything which the Granting party is or may be entitled to do or receive thereunder or with respect thereto.

“HIGHEST LAWFUL RATE”: The meaning specified in Section 11.18.

“HOLDER”: The holder of Bonds issued pursuant to this Indenture.

“INDENTURE” or “THIS INDENTURE”: This instrument as originally executed and, if from time to time supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, as so supplemented or amended. All references in this instrument to designated “Articles”, “Sections”, “Subsections” and other subdivisions are to the designated Articles, Sections, Subsections and other subdivisions of this instrument as originally executed. The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, Subsection or other subdivision.

“INDEPENDENT”: When used with respect to any specified Person means such a Person who (i) is in fact independent of the Issuer and any other obligor upon the Bonds, (ii) does not have any direct financial interest or any material indirect financial interest in the Issuer or in any such other obligor or in an Affiliate of the Issuer or such other obligor and (iii) is not connected with the Issuer or any such other obligor as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions. Whenever it is herein provided that any Independent Person’s opinion or certificate shall be furnished to the Trustee, such Person shall be appointed by an Issuer Order and with the approval of the Trustee, which approval shall not be unreasonably withheld, and such opinion or certificate shall state that the signer has read this definition and that the signer is Independent within the meaning hereof.

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“INDEX”: As to (a) each Pledged Mortgage, the index from time to time in effect for the adjustment of the Mortgage Rate set forth as such on the related Mortgage Note and (b) either Bond Interest Rate and any Payment Date, the weekly average yield on United States Treasury Securities adjusted to a constant maturity of one year as made available by the Federal Reserve Board and most recently available as of 45 days prior to the first day of the month preceding the month in which such Payment Date occurs.

“INDIRECT PARTICIPANT”: A broker, dealer, bank or other financial institution or other Person that clears through or maintains a custodial relationship with a Depository Participant.

“INDIVIDUAL BOND”: A Bond of an original principal amount of $_____; a Bond of an original principal amount in excess of $______ shall be deemed to be a number of Individual Bonds equal to the quotient obtained by dividing such original principal amount by $_______.

“INSURANCE POLICY”: With respect to any Pledged Mortgage, any insurance policy, including all riders and endorsements thereto in effect, including any replacement policy or policies for any Insurance Policies.

“INSURANCE PROCEEDS”: Proceeds paid by an insurer pursuant to any Insurance Policy, in each case other than any amount included in such Insurance Proceeds in respect of Insured Expenses.

“INSURED EXPENSES”: Expenses covered by an Insurance Policy or any other insurance policy with respect to the Pledged Mortgages.

“INTEREST ACCRUAL PERIOD”: With respect to each Class of Bonds and any Payment Date, the calendar month prior to the month of such Payment Date.

“INTEREST CONVERSION DATE”: As to the Pledged Mortgages, the date on which the first Adjustment Date occurs.

“INTEREST PAYMENT AMOUNT”: The Senior Interest Payment Amount, the Class [B-1] Interest Payment Amount, the Class [B-2] Interest Payment Amount or the Certificate Interest Payment Amount, as applicable.

“INVESTED AMOUNT”: As of any Payment Date, the lesser of (i) the aggregate of the Stated Principal Balances of the Pledged Mortgages, less the sum of (x) the Senior Class Principal Amount, (y) the Class [B-1] Principal Amount and (z) the Class [B-2] Principal Amount, in each case immediately prior to such date, and (ii) the Original Invested Amount reduced by all amounts previously distributed to the holder of the Investor Certificate in reduction of the Invested Amount.

“INVESTOR CERTIFICATE”: As defined in Section 1.01 of the Deposit Trust Agreement.

“INVESTOR PERCENTAGE”: As of any Payment Date, the difference between 100% and the sum of the Senior Percentage, the Class [B-1] Percentage and the Class [B-2] Percentage for such date.

“ISSUER”: Sequoia Mortgage Trust 201_-_ formed pursuant to the Deposit Trust Agreement.

“ISSUER ORDER” and “ISSUER REQUEST”: A written order or request that is dated and signed in the name of the Issuer by an Authorized Officer and delivered to the Trustee.

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“LETTER AGREEMENT”: With respect to the Book Entry Bonds, the letter agreement among the Issuer, the Trustee and the Depository governing book entry transfers of, and certain other matters with respect to, such Book Entry Bonds and attached as Exhibit I hereto.

“LIQUIDATED PLEDGED MORTGAGE”: With respect to any Payment Date, a defaulted Pledged Mortgage (including any REO Property) which was liquidated in the calendar month preceding the month of such Payment Date and as to which the Master Servicer has certified (in accordance with the Master Servicing Agreement) that it has received all amounts it expects to receive in connection with the liquidation of such Pledged Mortgage including the final disposition of an REO Property.

“LIQUIDATION PROCEEDS”: Amounts, including Insurance Proceeds, received in connection with the partial or complete liquidation of defaulted Pledged Mortgages, whether through trustee’s sale, foreclosure sale or otherwise or amounts received in connection with any condemnation or partial release of a Mortgaged Property and any other proceeds received in connection with an REO Property, less the sum of related unreimbursed Master Servicing Fees, Servicing Advances and Advances.

“LOAN-TO-VALUE RATIO”: With respect to any Pledged Mortgage and as to any date of determination, the fraction (expressed as a percentage) the numerator of which is the principal balance of the related Pledged Mortgage at such date of determination and the denominator of which is the Appraised Value of the related Mortgaged Property.

“MANAGEMENT AGREEMENT”: The agreement between the Trust and [ ], pursuant to which the Trust has delegated certain administrative functions of the Trust to the Manager.

“MANAGER”: The person acting in such capacity pursuant to the Management Agreement.

“MARGIN”: As to each Pledged Mortgage, the percentage amount set forth on the related Mortgage Note added to the Index in calculating the Mortgage Rate thereon.

“MASTER SERVICER”: _________________________________, a ____________ corporation, as Master Servicer under the Master Servicing Agreement, and its permitted successors and assigns thereunder.

“MASTER SERVICING AGREEMENT”: The master servicing agreement dated as of _____________ , 201__, among the Issuer, the Trustee and the Master Servicer, pursuant to which the Master Servicer will be obligated to manage and supervise the administration and servicing of the Pledged Mortgages securing the Bonds and each Servicer of the Pledged Mortgages, or its successors or assigns, as such agreement may be amended or supplemented from time to time as permitted thereby.

“MASTER SERVICING FEE”: As to each Pledged Mortgage and any Payment Date, an amount equal to one month’s interest at the related Master Servicing Fee Rate on the Stated Principal Balance of such Pledged Mortgage or, in the event of any payment of interest which accompanies a Principal Prepayment in Full made by the Mortgagor, interest at the Master Servicing Fee Rate on the Stated Principal Balance of such Pledged Mortgage for the period covered by such payment of interest, subject to reduction as provided in Section 5(a) of the Master Servicing Agreement.

“MASTER SERVICING FEE RATE”: With respect to each Mortgage Loan, _____% per annum.

“MATURITY”: With respect to any Bond, the date on which the entire unpaid principal amount of such Bond becomes due and payable as therein or herein provided, whether at the Stated Maturity of the final installment of such principal or by declaration of acceleration, call for redemption or otherwise.

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“MAXIMUM RATE”: As to any Pledged Mortgage, the maximum rate set forth on the related Mortgage Note at which interest can accrue on such Pledged Mortgage.

[“MOODY’S”: Moody’s Investors Service, Inc., or any successor thereto. For purposes of Section 11.04 the address for notices to Moody’s shall be Moody’s Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention: ____________ or such other address as Moody’s may hereafter furnish to the Issuer and the Master Servicer.]

“MORTGAGE”: The mortgage, deed of trust or other instrument creating a first lien on an estate in fee simple or leasehold interest in real property securing a Mortgage Note.

“MORTGAGE DOCUMENTS”: The mortgage documents listed in Section 2(a)(i) of the Master Servicing Agreement pertaining to a particular Pledged Mortgage and any additional documents delivered to the Trustee to be added to the Mortgage Documents pursuant to the Master Servicing Agreement.

“MORTGAGE NOTE”: The original executed note or other evidence of indebtedness evidencing the indebtedness of a Mortgagor under a Pledged Mortgage.

“MORTGAGE RATE”: The annual rate of interest borne by a Mortgage Note from time to time.

“MORTGAGED PROPERTY”: The underlying property securing a Pledged Mortgage, which, with respect to a Cooperative Loan, is the related Cooperative Shares and Proprietary Lease.

“MORTGAGOR”: The obligor(s) on a Mortgage Note.

“NET MORTGAGE RATE”: As to any Pledged Mortgage and Payment Date, the related Mortgage Rate as of the Due Date in the month preceding the month of such Payment Date reduced by the related Expense Rate.

“NET INTEREST SHORTFALLS”: As to any Payment Date, the amount by which the sum of (i) the amount of interest which would otherwise have been received with respect to any Pledged Mortgage that was the subject of a Relief Act Reduction and (ii) any Prepayment Interest Shortfalls, in each case during the [calendar month] preceding the month of such Payment Date, exceeds the sum of (i) the Master Servicing Fee for such period and (ii) the Certificate Interest Payment Amount, the Invested Amount Payment and any other amounts payable to the holder of the Investor Certificate described in [_______].

“NONRECOVERABLE ADVANCE”: Any portion of an Advance or Servicer Advance previously made or proposed to be made by the Master Servicer or the related Servicer, as the case may be, that, in the good faith judgment of the Master Servicer or such Servicer, will not be ultimately recoverable by the Master Servicer from the related Mortgagor, related Liquidation Proceeds or otherwise.

“NRSRO”: Any nationally statistical rating organization for purposes of Rule 17g-5 under the Exchange Act.

“NRSRO CERTIFICATION”: A certification in the form of Exhibit O to the Pooling and Servicing Agreement.

“OFFICERS’ CERTIFICATE”: A certificate signed by two Authorized Officers.

“OFFICER’S CERTIFICATE OF THE MASTER SERVICER”: A certificate (i) signed by the Chairman of the Board, the Vice Chairman of the Board, the President, a Managing Director, a Vice President (however denominated), an Assistant Vice President, the Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant Secretaries of the Master Servicer, or (ii) if provided for herein, signed by a Servicing Officer, as the case may be, and delivered to the Trustee, as required hereby.

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“OPERATIVE AGREEMENTS”: The meaning ascribed thereto in the Deposit Trust Agreement.

“OPINION OF COUNSEL”: A written opinion of counsel who may, except as otherwise expressly provided in this Indenture, be counsel for the Issuer, and who shall be reasonably satisfactory to the Trustee.

“OPTIONAL REDEMPTION DATE”: With respect to the Bonds which are subject to optional redemption, the date on which Bonds may be redeemed pursuant to Section 10.01.

“OPTIONAL REDEMPTION RECORD DATE”: The meaning specified in Section 10.02.

“ORIGINAL CLASS [B-1] PRINCIPAL AMOUNT”: $____________.

“ORIGINAL CLASS [B-2] PRINCIPAL AMOUNT”: $____________.

“ORIGINAL INVESTED AMOUNT”: $____________.

“ORIGINAL PLEDGED MORTGAGES”: The Pledged Mortgages listed on the Pledged Mortgage Schedule and granted to the Trustee on the Closing Date.

“ORIGINAL SENIOR CLASS PRINCIPAL AMOUNT”: $___________________.

“ORIGINAL SUBORDINATION AMOUNT”: The sum of the Original Subordinated Class Principal Amount and the Original Invested Amount.

“OTS”: The Office of Thrift Supervision.

“OUTSTANDING”: As of the date of determination, all Bonds theretofore authenticated and delivered under this Indenture except:

(i) Bonds theretofore cancelled by the Bond Registrar or delivered to the Bond Registrar for cancellation;

(ii) Bonds or portions thereof for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Issuer) in trust for the Holders of such Bonds; provided, however, that if such Bonds are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor, satisfactory to the Trustee, has been made;

(iii) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered pursuant to this Indenture unless proof satisfactory to the Trustee is presented that any such Bonds are held by a bona fide purchaser (as defined by the Uniform Commercial Code of the applicable jurisdiction); and

(iv) Bonds alleged to have been destroyed, lost or stolen for which replacement Bonds have been issued as provided for in Section 2.08;

provided, however, that in determining whether the Holders of the requisite percentage of the aggregate Class Principal Amount of the Outstanding Bonds have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Bonds owned by the Issuer, any other obligor upon the Bonds or any Affiliate of the Issuer or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Trustee knows to be so owned shall be so disregarded. Bonds so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Bonds and that the pledgee is not the Issuer, any other obligor upon the Bonds or any Affiliate of the Issuer or such other obligor.

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“OUTSTANDING PLEDGED MORTGAGE”: As of any Due Date, a Pledged Mortgage with a Stated Principal Balance greater than zero which was not the subject of a Principal Prepayment in Full prior to such Due Date and which did not become a Liquidated Pledged Mortgage prior to such Due Date.

“OWNER”: The meaning ascribed thereto in the Deposit Trust Agreement.

“OWNER TRUSTEE”: [_______________], a [____] banking corporation, not in its individual capacity but solely as Owner Trustee under the Deposit Trust Agreement, until a successor Person shall have become the Owner Trustee pursuant to the applicable provisions of the Deposit Trust Agreement, and thereafter “Owner Trustee” shall mean such successor Person.

“PAYING AGENT”: The Trustee or any other depository institution or trust company that is authorized by the Issuer pursuant to Section 3.03 to pay the principal of, or interest on, any Bonds on behalf of the Issuer.

“PAYMENT DATE”: The ___th day of each [calendar month] after the initial issuance of the Bonds or, if such ___th day is not a Business Day, the next succeeding Business Day, commencing in ____________ 201__.

“PAYMENT DATE STATEMENT”: shall have the meaning specified in Section 8.06.

[“PERIODIC RATE CAP”: As to any Pledged Mortgage and any Adjustment Date, the maximum percentage increase or decrease to the related Mortgage Note on any such Adjustment Date, as specified in the related Mortgage Note.]

“PERMITTED ENCUMBRANCE”: Any lien, charge, security interest, mortgage or other encumbrance Granted by the Issuer in the Trust Estate, provided that:

(i) such lien, charge, security interest, mortgage or encumbrance extends only to a portion of the Trust Estate which is limited to cash deliverable or payable to the Issuer pursuant to Section 8.01 or Section 8.02(d);

(ii) such lien, charge, security interest, mortgage or other encumbrance secures indebtedness which the Issuer is permitted to incur under the terms of this Indenture; and

(iii) the beneficiary of such lien, charge, security interest, mortgage or other encumbrance has agreed that in connection with the enforcement thereof it will not bring any Proceeding seeking, or which would result in, the sale of any portion of the Trust Estate and will not file any petition for the commencement of insolvency proceedings with respect to the Issuer under the federal bankruptcy laws, as now or hereafter in effect, or any other present or future federal or state bankruptcy, insolvency or similar law, or for the appointment of any receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or of any of its property, or seeking an order for the winding up or liquidation of the affairs of the Issuer.

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“PERMITTED INVESTMENTS”: At any time, any one or more of the following obligations and securities:

(i) obligations of the United States or any agency thereof, provided that such obligations are backed by the full faith and credit of the United States;

(ii) general obligations of or obligations guaranteed by any state of the United States or the District of Columbia receiving the highest long-term debt rating of each Rating Agency, or such lower rating as will not result in the downgrading or withdrawal of the ratings then assigned to the Bonds by the Rating Agencies, as evidenced by a signed writing delivered by each Rating Agency;

(iii) commercial or finance company paper which is then receiving the highest commercial or finance company paper rating of each Rating Agency, or such lower rating as will not result in the downgrading or withdrawal of the ratings then assigned to the Bonds by the Rating Agencies, as evidenced by a signed writing delivered by each Rating Agency;

(iv) certificates of deposit, demand or time deposits, or bankers’ acceptances issued by any depository institution or trust company incorporated under the laws of the United States or of any state thereof and subject to supervision and examination by federal and/or state banking authorities, provided that the commercial paper and/or long-term unsecured debt obligations of such depository institution or trust company (or in the case of the principal depository institution in a holding company system, the commercial paper or long-term unsecured debt obligations of such holding company, but only if Moody’s Investor’s service, Inc. is not the applicable Rating Agency) are then rated one of the two highest long-term and the highest short-term ratings of each Rating Agency for such securities, or such lower ratings as will not result in the downgrading or withdrawal of the ratings then assigned to the Bonds by the Rating Agencies, as evidenced by a signed writing delivered by each Rating Agency;

(v) demand or time deposits or certificates of deposit issued by any bank or trust company or savings institution to the extent that such deposits are fully insured by the FDIC;

(vi) guaranteed reinvestment agreements issued by any bank, insurance company or other corporation acceptable to the Rating Agencies at the time of the issuance of such agreements, as evidenced by a signed writing delivered by each Rating Agency;

(vii) repurchase obligations with respect to any security described in clauses (i) and (ii) above, in either case entered into with a depository institution or trust company (acting as principal) described in clause (iv) above;

(viii) securities (other than stripped bonds, stripped coupons or instruments sold at a purchase price in excess of 115% of the face amount thereof) bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States or any state thereof which, at the time of such investment, have one of the two highest ratings of each Rating Agency (except if the Rating Agency is Moody’s, such rating shall be the highest commercial paper rating of Moody’s for any such series), or such lower rating as will not result in the downgrading or withdrawal of the ratings then assigned to the Bonds by the Rating Agencies, as evidenced by a signed writing delivered by each Rating Agency;

(ix) interests in any money market fund which at the date of acquisition of the interests in such fund and throughout the time such interests are held in such fund has the highest applicable rating by each Rating Agency or such lower rating as will not result in a change in the rating then assigned to the Bonds by each Rating Agency;

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(x) short-term investment funds sponsored by any trust company or national banking association incorporated under the laws of the United States or any state thereof which on the date of acquisition has been rated by each applicable Rating Agency in their respective highest applicable rating category or such lower rating as will not result in a change in the rating then specified stated maturity and bearing interest or sold at a discount acceptable to each Rating Agency as will not result in the downgrading or withdrawal of the ratings then assigned to the Bonds by the Rating Agencies; and

(xi) such other investments having a specified stated maturity and bearing interest or sold at a discount acceptable to the Rating Agencies as will not result in the downgrading or withdrawal of the ratings then assigned to the Bonds by the Rating Agencies;

provided, that no such instrument shall be a Permitted Investment if (i) such instrument evidences the right to receive interest only payments with respect to the obligations underlying such instrument or (ii) such instrument would require the Issuer to register as an investment company under the Investment Company Act of 1940, as amended.

“PERSON”: Any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

“PLEDGED ACCOUNTS”: The Bond Account and the Distribution Account (exclusive of any earnings on investments made with funds deposited in the Distribution Account or the Bond Account).

“PLEDGED MORTGAGE SCHEDULE”: The list of Pledged Mortgages (as from time to time amended by the Master Servicer to reflect the addition of Replacement Pledged Mortgages and the deletion of Deleted Pledged Mortgages pursuant to the provisions of the Master Servicing Agreement) Granted to the Trustee pursuant to the provisions hereof as part of the Trust Estate and from time to time subject to this Agreement, attached hereto as Schedule I.

“PLEDGED MORTGAGES”: Such of the mortgage loans Granted to the Trustee pursuant to the provisions hereof as from time to time are held as a part of the Trust Estate (including any REO Property), the mortgage loans so held being identified in the Pledged Mortgage Schedule, notwithstanding foreclosure or other acquisition of title of the related Mortgaged Property.

“POOL STATED PRINCIPAL BALANCE”: As to any Payment Date, the aggregate of the Stated Principal Balances of the Pledged Mortgages which were Outstanding Pledged Mortgages on the Due Date in the month preceding the month of such Payment Date.

“PREDECESSOR BONDS”: With respect to any particular Bond of a Class, every previous Bond of that Class evidencing all or a portion of the same debt as that evidenced by such particular Bond; and, for the purpose of this definition, any Bond authenticated and delivered under Section 2.08 in lieu of a lost, destroyed or stolen Bond shall be deemed to evidence the same debt as the lost, destroyed or stolen Bond.

“PREPAYMENT INTEREST SHORTFALL”: As to any Payment Date, Pledged Mortgage and Principal Prepayment, the amount, if any, by which one month’s interest at the related Mortgage Rate on such Principal Prepayment exceeds the amount of interest paid in connection with such Principal Prepayment.

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“PREPAYMENT PERIOD”: As to any Payment Date, the [calendar month] preceding the month of such Payment Date.

“PRIMARY MORTGAGE INSURANCE POLICY”: Each policy of primary mortgage guaranty insurance or any replacement policy therefor with respect to any Pledged Mortgage.

“PRINCIPAL PREPAYMENT”: Any payment of principal by a Mortgagor on a Pledged Mortgage that is received in advance of its scheduled Due Date and is not accompanied by an amount representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment.

“PRINCIPAL PREPAYMENT IN FULL”: Any Principal Prepayment made by a Mortgagor of the entire principal balance of a Pledged Mortgage.

“PROCEEDING”: Any suit in equity, action at law or other judicial or administrative proceeding.

“PROPRIETARY LEASE”: As defined in Section 1 of the Master Servicing Agreement.

“PROSPECTUS SUPPLEMENT”: The Prospectus Supplement dated _________ ___, 201__ relating to the Bonds.

“PURCHASE AGREEMENT:” The Mortgage Loan Purchase Agreement, dated as of ________, 201_, by and between the Seller and the Depositor with respect to the Mortgage Loans.

“PURCHASE PRICE”: With respect to any Pledged Mortgage required to be purchased by the Master Servicer pursuant to Section 2(a)(ii) or 2(d)(iii) of the Master Servicing Agreement or purchased at the option of the Master Servicer pursuant to Section 3(n) of the Master Servicing Agreement, an amount equal to the sum of (i) 100% of the unpaid principal balance of the Pledged Mortgage on the date of such purchase, and (ii) accrued interest thereon at the applicable Adjusted Net Mortgage Rate from the date through which interest was last paid by the Mortgagor to the Due Date in the month in which the Purchase Price is to be distributed to Bondholders.

“RATING AGENCY”: Each of [ ] and [ ]. If either such organization or a successor is no longer in existence, “Rating Agency” shall be such nationally recognized statistical rating organization, or other comparable Person, as is designated by the Issuer, notice of which designation shall be given to the Trustee. References herein to a given rating or rating category of a Rating Agency shall mean such rating category without giving effect to any modifiers.

“REALIZED LOSS”: With respect to each Liquidated Pledged Mortgage, an amount (not less than zero or more than the Stated Principal Balance of the Pledged Mortgage) as of the date of such liquidation, equal to (i) the Stated Principal Balance of the Liquidated Pledged Mortgage as of the date of such liquidation, plus (ii) interest at the Net Mortgage Rate from the Due Date as to which interest was last paid or advanced (and not reimbursed) to Bondholders up to the Due Date in the month in which Liquidation Proceeds are required to be distributed on the Stated Principal Balance of such Liquidated Pledged Mortgage from time to time, minus (iii) the Liquidation Proceeds, if any, received during the month in which such liquidation occurred, to the extent applied as recoveries of interest at the Adjusted Net Mortgage Rate and to principal of the Liquidated Pledged Mortgage. With respect to each Pledged Mortgage which has become the subject of a Deficient Valuation, if the principal amount due under the related Mortgage Note has been reduced, the difference between the principal balance of the Pledged Mortgage outstanding immediately prior to such Deficient Valuation and the principal balance of the Pledged Mortgage as reduced by the Deficient Valuation. With respect to each Pledged Mortgage which has become the subject of a Debt Service Reduction and any Payment Date, the amount, if any, by which the principal portion of the related Scheduled Payment has been reduced.

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“RECORD DATE”: With respect to any Payment Date, the date on which the Persons entitled to receive any payment of principal of, or interest on, any Bonds (or notice of a payment in full of principal) due and payable on such Payment Date are determined; such date shall be the last day of the month preceding the month of such Payment Date.

“REDEMPTION DATE”: Any Optional Redemption Date or any Payment Date on which Bonds may be redeemed.

“REDEMPTION PRICE”: With respect to any Class of Bonds to be redeemed, an amount equal to 100% of the related Class Principal Amount of the Bonds (including, in the case of the Subordinated Bonds, any unpaid Subordinated Principal Carryover Shortfall) to be so redeemed, together with interest on such amount at the applicable Bond Interest Rate through the last day of the month immediately preceding the month in which such Redemption Date occurs, together with any unpaid Class Interest Shortfalls.

“REFINANCING PLEDGED MORTGAGE”: Any Pledged Mortgage originated in connection with the refinancing of an existing mortgage loan.

“REGULATION AB”: Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and subject to such clarifications and interpretations as have been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time.

“RELEVANT SERVICING CRITERIA”: The Servicing Criteria applicable to each party, as set forth on Exhibit VII attached hereto. Multiple parties can have responsibility for the same Relevant Servicing Criteria. With respect to a Servicing Function Participant engaged by the Master Servicer, the Trustee or each Servicer, the term “Relevant Servicing Criteria” may refer to a portion of the Relevant Servicing Criteria applicable to such parties.

“RELIEF ACT”: The Soldiers’ and Sailors’ Civil Relief Act of 1940, as amended.

“RELIEF ACT REDUCTIONS”: With respect to any Payment Date and any Pledged Mortgage as to which there has been a reduction in the amount of interest collectible thereon for the most recently ended calendar month as a result of the application of the Relief Act, the amount, if any, by which (i) interest collectible on such Pledged Mortgage for the most recently ended calendar month is less than (ii) interest accrued thereon for such month pursuant to the Mortgage Note.

“REO PROPERTY”: A Mortgaged Property acquired by the Trustee through foreclosure or deed-in-lieu of foreclosure in connection with a defaulted Pledged Mortgage.

“REPLACEMENT PLEDGED MORTGAGE”: A Mortgage Loan substituted by the Master Servicer for a Deleted Mortgage Loan which must, on the date of such substitution, as confirmed in a Request for Release, substantially in the form of Exhibit C to the Master Servicing Agreement, (i) have a Stated Principal Balance, after deduction of the principal portion of the Scheduled Payment due in the month of substitution, not in excess of, and not more than 10% less than, the Stated Principal Balance of the Deleted Mortgage Loan; (ii) be accruing interest at a rate no lower than and not more than 1% per annum higher than, that of the Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (iv) have a Mortgage Rate based upon the same Index and a Margin at least equal to and not greater than 50 basis points higher than that of the Deleted Mortgage Loan; (v) have a Mortgage Rate subject to a Periodic Rate Cap and Maximum Rate that are no less than those applicable to the Deleted Mortgage Loan; (vi) have Adjustment Dates that are no more or less frequent than the Deleted Mortgage Loan; (vii) have a remaining term to maturity no greater than (and not more than one year less than that of) the Deleted Mortgage Loan; (viii) not be a Cooperative Loan unless the Deleted Mortgage Loan was a Cooperative Loan; and (ix) comply with each representation and warranty set forth in Section 2(d)(ii) of the Master Servicing Agreement.

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“REQUEST FOR RELEASE”: The Request for Release submitted by the Master Servicer to the Trustee, substantially in the form of Exhibits C and D to the Master Servicing Agreement, as appropriate.

“RESPONSIBLE OFFICER”: With respect to the Trustee, any officer in the corporate trust department or similar group of the Trustee and also, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject.

“RULE 15GA-1 INFORMATION: As defined in Section 4.04(a) of the Pooling and Servicing Agreement.

“RULE 17g-5 INFORMATION PROVIDER”: The Securities Administrator.

“RULE 17G-5 WEBSITE”: The website maintained by the Securities Administrator pursuant to Section 4.03 of the Pooling and Servicing Agreement.

“S&P”: Standard & Poor’s Ratings Group, a division of McGraw-Hill Inc. For purposes of Section 11.04 the address for notices to S&P shall be Standard & Poor’s Ratings Group, 26 Broadway, 15th Floor, New York, New York 10004, Attention: Mortgage Surveillance Monitoring, or such other address as S&P may hereafter furnish to the Issuer and the Master Servicer.

“SAIF”: The Savings Association Insurance Fund, or any successor thereto.

“SALE”: The meaning specified in Section 5.18(a).

“SARBANES OXLEY ACT”: The Sarbanes-Oxley Act of 2002 and the rules and regulations of the Commission promulgated thereunder (including any interpretations thereof by the Commission’s staff).

“SARBANES-OXLEY CERTIFICATION”: A written certification covering the activities of all Servicing Function Participants and signed by an officer of the Depositor and that complies with (i) the Sarbanes-Oxley Act of 2002, as amended from time to time, and (ii) the February 21, 2003 Statement by the Staff of the Division of Corporation Finance of the Securities and Exchange Commission Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and 15d-14, as in effect from time to time; provided that if, after the Closing Date (a) the Sarbanes-Oxley Act of 2002 is amended, (b) the Statement referred to in clause (ii) is modified or superseded by any subsequent statement, rule or regulation of the Securities and Exchange Commission or any statement of a division thereof, or (c) any future releases, rules and regulations are published by the Securities and Exchange Commission from time to time pursuant to the Sarbanes-Oxley Act of 2002, which in any such case affects the form or substance of the required certification and results in the required certification being, in the reasonable judgment of the Master Servicer, materially more onerous than the form of the required certification as of the Closing Date, the Sarbanes-Oxley Certification shall be as agreed to by the Master Servicer, the Manager and the Seller following a negotiation in good faith to determine how to comply with any such new requirements.

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“SCHEDULED PAYMENT”: The scheduled monthly payment on a Pledged Mortgage due on any Due Date allocable to principal and/or interest on such Pledged Mortgage which, unless otherwise specified in the Master Servicing Agreement, shall give effect to any related Debt Service Reduction and any Deficient Valuation that affects the amount of the monthly payment due on such Pledged Mortgage.

“SECURITIES ACT”: The Securities Act of 1933, as amended.

“SELLER”: RWT Holdings, Inc., a Delaware corporation, in its capacity as Seller pursuant to the Purchase Agreement.

“SENIOR BOND INTEREST RATE”: With respect to any Interest Accrual Period, the annual rate at which interest accrues on the Senior Bonds as specified in such Bonds and in Section 2.03(c).

“SENIOR BONDS”: The Class [A-1] Bonds.

“SENIOR CLASS PRINCIPAL AMOUNT”: As of any Payment Date, the Original Senior Class Principal Amount reduced by all amounts previously distributed to Holders of the Senior Bonds as payments of principal.

“SENIOR INTEREST PAYMENT AMOUNT”: As to any Payment Date, the sum of (i) one month’s interest accrued during the related Interest Accrual Period at the Senior Bond Interest Rate on the Senior Class Principal Amount, subject to reduction pursuant to Section 2.03(d) and (ii) the sum of the amounts, if any, by which the amount described in clause (i) above on each prior Payment Date exceeded the amount actually distributed as interest on such prior Payment Dates and not subsequently distributed.

“SENIOR INTEREST SHORTFALL”: As to any Payment Date, the amount by which the amount described in clause (i) of the definition of Senior Interest Payment Amount exceeds the amount of interest actually paid on the Senior Bonds on such Payment Date pursuant to such clause (i).

“SENIOR PERCENTAGE”: As to any Payment Date, the percentage equivalent of a fraction the numerator of which is the Senior Class Principal Amount immediately prior to such date and the denominator of which is the sum of (i) the Senior Class Principal Amount, (ii) the Class [B-1] Principal Amount, (iii) the Class [B-2] Principal Amount and (iv) the Invested Amount, in each case immediately prior to such date.

“SENIOR PRINCIPAL PAYMENT AMOUNT”: As to each Payment Date, the Senior Percentage of the sum of (a) the principal portion of the Scheduled Payment due on each Pledged Mortgage [on the related Due Date], (b) the principal portion of the purchase price of each Pledged Mortgage that was purchased by [___________]or another person pursuant to the Mortgage Loan Purchase Agreement [or any optional purchase by the Master Servicer of a defaulted Pledged Mortgage] as of such Payment Date, (c) the Substitution Adjustment Amount in connection with any Deleted Pledged Mortgage received with respect to such Payment Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of principal of Pledged Mortgages that are not yet Liquidated Pledged Mortgages received during the [calendar month] preceding the month of such Payment Date, (e) with respect to each Pledged Mortgage that became a Liquidated Pledged Mortgage during the [calendar month] preceding the month of such Payment Date, the Stated Principal Balance of such Pledged Mortgage, and (f) all partial and full principal prepayments by borrowers received during the related Prepayment Period.

“SERVICER”: Any person with which the Master Servicer has entered into a Servicing Agreement for the servicing of all or a portion of the Pledged Mortgages pursuant to Section 3(b) of the Master Servicing Agreement.

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“SERVICER ADVANCE”: The meaning ascribed to such term in Section 3(h)(iv) of the Master Servicing Agreement.

“SERVICING ADVANCES”: All customary, reasonable and necessary “out of pocket” costs and expenses incurred in the performance by the Master Servicer of its servicing obligations, including, but not limited to, the cost of (i) the preservation, restoration and protection of a Mortgaged Property, (ii) any expenses reimbursable to the Master Servicer pursuant to Section 3(n) of the Master Servicing Agreement and any enforcement or judicial proceedings, including foreclosures, (iii) the management and liquidation of any REO Property and (iv) compliance with the obligations under Section 3(l) of the Master Servicing Agreement.

“SERVICING AGREEMENT”: Any agreement between the Master Servicer and related Servicer relating to servicing and/or administration of certain Pledged Mortgages as provided in Section 3(b) of the Master Servicing Agreement.

“SERVICING CRITERIA”: The criteria set forth in paragraph (d) of Item 1122 of Regulation AB, as such may be amended from time to time.

“SERVICING DEFAULT”: As defined in the Master Servicing Agreement.

“SERVICING FEE”: As to each Pledged Mortgage and any Payment Date, an amount equal to one month’s interest at the applicable Servicing Fee Rate on the Stated Principal Balance of such Pledged Mortgage.

“SERVICING FEE RATE”: With respect to any Pledged Mortgage, the per annum rate set forth in the Pledged Mortgage Schedule for such Pledged Mortgage.

“SERVICING FUNCTION PARTICIPANT”: Any Subservicer or Subcontractor, other than each Servicer, the Master Servicer and the Trustee, that is participating in the servicing function within the meaning of Regulation AB, unless such Person’s activities relate only to 5% or less of the Mortgage Loans.

“SERVICING OFFICER”: Any officer of the Master Servicer involved in, or responsible for, the administration and servicing of the Pledged Mortgages whose name and facsimile signature appear on a list of servicing officers furnished to the Trustee by the Master Servicer on the Closing Date pursuant to the Master Servicing Agreement, as such list may from time to time be amended.

“STATED MATURITY”: With respect to any and all Bonds _________________.

“STATED PRINCIPAL BALANCE”: As to any Pledged Mortgage and Due Date, the unpaid principal balance of such Pledged Mortgage as of such Due Date as specified in the amortization schedule at the time relating thereto (before any adjustment to such amortization schedule by reason of any moratorium or similar waiver or grace period) after giving effect to any previous partial Principal Prepayments and Liquidation Proceeds allocable to principal (other than with respect to any Liquidated Pledged Mortgage) and to the payment of principal due on such Due Date and irrespective of any delinquency in payment by the related Mortgagor.

“SUBCONTRACTOR”: Any vendor, subcontractor or other Person that is not responsible for the overall servicing of Mortgage Loans but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans under the direction or authority of any Servicer (or a Subservicer of any Servicer), the Master Servicer or the Trustee.

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“SUBSERVICER”: Any Person that (i) services Mortgage Loans on behalf of any Servicer, and (ii) is responsible for the performance (whether directly or through sub-servicers or Subcontractors) of Servicing functions required to be performed under this Agreement, any related Servicing Agreement or any sub-servicing agreement that are identified in Item 1122(d) of Regulation AB.

“SUBORDINATED BOND INTEREST RATE”: With respect to any Interest Accrual Period, the annual rate at which interest accrues on the Subordinated Bonds as specified in such Bonds and in Section 2.03(c).

“SUBORDINATED BONDS”: The Class [B-1] and the Class [B-2] Bonds.

“SUBSTITUTION ADJUSTMENT AMOUNT”: The meaning ascribed to such term pursuant to Section 2(d)(iv) of the Master Servicing Agreement.

“SUCCESSOR MASTER SERVICER”: A Person appointed by the Trustee who succeeds either the Trustee or the Master Servicer, pursuant to the applicable provisions of the Master Servicing Agreement.

“TRUST”: Sequoia Mortgage Trust 201_-_, a trust established by a deposit trust agreement between the depositor and [ ], as owner trustee.

“TRUST ESTATE”: All money, instruments and other property subject or intended to be subject to the lien of this Indenture for the benefit of the Bondholders as of any particular time (including, without limitation, all property and interests Granted to the Trustee), including all proceeds thereof.

“TRUST INDENTURE ACT” OR “TIA”: The Trust Indenture Act of 1939, as amended, as in force at the Closing Date, unless otherwise specifically provided.

“TRUSTEE”: ______________________________, a banking corporation organized and existing under the laws of _________________________________, and any Person succeeding as Trustee hereunder pursuant to Section 6.12 or any other applicable provision hereof.

“TRUSTEE FEE”: As to any Payment Date, an amount equal to one-twelfth of the Trustee Fee Rate multiplied by the Pool Stated Principal Balance with respect to such Payment Date.

“TRUSTEE FEE RATE”: With respect to each Pledged Mortgage, the per annum rate agreed upon in writing on or prior to the Closing Date by the Trustee and the Issuer.

“TRUSTEE MORTGAGE FILE”: With respect to each Pledged Mortgage, the original documents and instruments relating thereto to be retained in the custody and possession of the Trustee, as set forth and enumerated in Section 2(a) of the Master Servicing Agreement.

“WITHDRAWAL DATE”: The ___th day of each month, or if such day is not a Business Day, the next preceding Business Day.

ARTICLE II

THE BONDS

SECTION 2.01. FORMS GENERALLY.

The Bonds and the Trustee’s certificate of authentication shall be in substantially the form required by this Article II, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange on which the Bonds may be listed, or as may, consistently herewith, be determined by the officers executing such Bonds, as evidenced by their execution thereof. Any portion of the text of any Bond may be set forth on the reverse thereof with an appropriate reference on the face of the Bond.

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The Definitive Bonds may be produced in any manner determined by the officers executing such Bonds, as evidenced by their execution thereof; provided, however, that in the event the Bonds are listed on any securities exchange, the Bonds shall be produced in accordance with the rules of any securities exchange on which the Bonds may be listed.

SECTION 2.02. FORMS OF BONDS AND CERTIFICATE OF AUTHENTICATION.

(a) The form of Bond which is a Senior Bond is attached hereto as Exhibit II.

(b) The form of Bond which is a Class [B-1] Bond is attached hereto as Exhibit III.

(c) The form of Bond which is a Class [B-2] Bond is attached hereto as Exhibit IV.

(d) The form of the Trustee’s certificate of authentication is as follows:

“This is one of the Bonds referred to in the within mentioned Indenture.

as Trustee

By:

Authorized Signatory”

(e) The form of assignment is as follows:

“FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto __________________________________________________ (Please insert Social Security or other Identifying Number of Assignee) _________________________________________________________________ (Please print or type name and address of Assignee) __________________________________________________________ the within Bond of Sequoia Mortgage Trust 201_-_, and does hereby irrevocably constitute and appoint __________ Attorney to transfer such Bond on the books of the within named trust, with full power of substitution in the premises.

Dated: ______________________________

Notice: The signature to this assignment must correspond with the name as written upon the face of this Bond in every particular without alteration or enlargement or any change whatever. The signature must be guaranteed by a member of a signature guaranty medallion program. Notarized or witnessed signatures are not acceptable.”

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[(f) The Bonds shall have a Statement of Insurance printed thereon or attached thereto which essentially sets forth the terms of the Bond Insurance Policy.]

SECTION 2.03. BONDS ISSUABLE IN CLASSES; PROVISIONS WITH RESPECT TO PRINCIPAL AND INTEREST PAYMENTS.

(a) General.

The Bonds shall be designated generally as the Sequoia Mortgage Trust _________, “Collateralized Mortgage Bonds” of the Issuer. Each Bond shall bear upon the face thereof the designation so selected for the Class to which it belongs.

Bonds of each Class shall constitute Book Entry Bonds as defined in Section 2.13 hereof. The aggregate principal amount of Bonds that may be authenticated and delivered under the Indenture is unlimited.

All of the Bonds shall be issued in the appropriate forms attached as Exhibits hereto with such additions and completions as are appropriate for each such Class.

The Class [A-1] Bonds shall constitute the sole Class of Senior Bonds and the Class [B-1] Bonds and the Class [B-2] Bonds shall constitute the sole Classes of Subordinated Bonds.

The final installments of principal of the Classes of Bonds shall have the Stated Maturity specified above. The principal of each Bond shall be payable in installments ending no later than the Stated Maturity of the final installment of the principal thereof unless the unpaid principal of such Bond becomes due and payable at an earlier date by declaration of acceleration or call for redemption or otherwise. All payments made with respect to any Bond shall be applied first to the interest then due and payable on such Bond and then to the principal thereof.

(b) Payments of Principal of and Interest on the Bonds.

On each Payment Date, the Trustee shall withdraw the Bond Payment Amount from the Distribution Account and apply such funds to payments on the Bonds in the following order of priority and, in each case, to the extent of funds remaining:

(i) to the Senior Bonds, an amount allocable to interest equal to the Senior Interest Payment Amount for such Payment Date;

(ii) to the Senior Bonds, an amount allocable to principal equal to the Senior Principal Payment Amount for such Payment Date;

(iii) to the Class [B-1] Bonds, an amount allocable to interest equal to the Class [B-1] Interest Payment Amount for such Payment Date;

(iv) to the Class [B-1] Bonds, an amount allocable to principal equal to the Class [B-1] Principal Payment Amount for such Payment Date;

(v) to the Class [B-2] Bonds, an amount allocable to interest equal to the Class [B-2] Interest Payment Amount for such Payment Date; and

(vi) to the Class [B-2] Bonds, an amount allocable to principal to the Class [B-2] Principal Payment Amount for such Payment Date.

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(c) Calculation of the Bond Interest Rate.

(i) The Bond Interest Rate for the Senior Bonds (the “Senior Bond Interest Rate”) and any Interest Accrual Period will equal ______________;

(ii) The Bond Interest Rate for the Class [B-1] Bonds (the “Class [B-1] Bond Interest Rate”) and any Interest Accrual Period will equal ___________________;

(iii) The Bond Interest Rate for the Class [B-2] Bonds (the “Class [B-2] Bond Interest Rate”) and any Interest Accrual Period will equal _______________; and

(iv) The Senior Interest Payment Amount, the Class [B-1] Interest Payment Amount and the Class [B-2] Interest Payment Amount shall each be calculated on the basis of a 360-day year of twelve 30-day months.

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(d) Reduction of Interest Payment Amounts.

With respect to each Payment Date, the amounts referred to in clause (i) of the definition of Senior Interest Payment Amount and clauses (i) and (ii) of the definitions of Class [B-1] Interest Payment Amount and Class [B-2] Interest Payment Amount, as applicable, for such Payment Date shall be reduced by the applicable Class’ pro rata share (based on the Interest Payment Amount for such Class before reduction pursuant to this Section 2.03(d)) of Net Interest Shortfalls.

(e) Pro Rata Payments.

All payments on the Bonds of any Class shall be made pro rata among all Bonds of such Class.

(f) Payments to the Senior Bondholders provided for in (b) of this Section 2.03 shall be paid, on each Payment Date after the Subordinated Class Principal Amount and the Invested Amount have been reduced to zero and where the Senior Interest Payment Amount and the Senior Principal Payment Amount exceed the Available Funds, by the Bond Insurer.

SECTION 2.04. DENOMINATIONS.

Each Class of Book Entry Bonds shall be evidenced initially by a single Bond representing the entire aggregate Class Principal Amount of such Class of Bonds as of the Closing Date, beneficial ownership of which may be held in denominations of $_______ and increments of $______ in excess thereof for all Bonds. All of the Book Entry Bonds shall be initially registered on the Bond Register in the name of Cede & Co., the nominee of the Depository, and no Beneficial Owner will receive a Definitive Bond representing such Beneficial Owner’s interest in the Book Entry Bonds, except in the event of Book Entry Termination.

SECTION 2.05. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.

The Bonds shall be executed by an Authorized Officer of the Issuer. The signature of such officer on the Bonds may be manual or facsimile.

Bonds bearing the manual or facsimile signature of an individual who was at any time an Authorized Officer shall bind the Issuer, notwithstanding that such individual has ceased to hold such office prior to the authentication and delivery of such Bonds or did not hold such office at the date of such Bonds.

At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Bonds executed on behalf of the Issuer to the Trustee for authentication; and the Trustee shall authenticate and deliver such Bonds as in this Indenture provided and not otherwise.

Each Bond authenticated on the Closing Date shall be dated the Closing Date. All other Bonds which are authenticated after the Closing Date for any other purpose hereunder shall be dated the date of their authentication.

No Bond shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Bond a certificate of authentication substantially in the form provided for herein executed by the Trustee or by any Authenticating Agent by the manual signature of one of its authorized officers or employees, and such certificate upon any Bond shall be conclusive evidence, and the only evidence, that such Bond has been duly authenticated and delivered hereunder.

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SECTION 2.06. TEMPORARY BONDS.

So long as the Book Entry Bonds are held by the Depository for the Participants in book-entry form, they may be typewritten or in any other form acceptable to the Issuer, the Trustee and the Depository. At any time during which the Book Entry Bonds are not held by the Depository for the Participants in book-entry form, the Definitive Bonds shall be lithographed or printed with steel engraved borders.

Pending the preparation of Definitive Bonds, the Issuer may execute, and upon Issuer Order the Trustee shall authenticate and deliver, temporary Bonds which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Bonds in lieu of which they may be so issued and with such variations as the officers executing such Bonds may determine, as evidenced by their execution of such Bonds.

If temporary Bonds are issued, the Issuer will cause definitive Bonds to be prepared without unreasonable delay. After the preparation of definitive Bonds, the temporary Bonds shall be exchangeable for definitive Bonds upon surrender of the temporary Bonds at the office or agency of the Issuer to be maintained as provided in Section 3.02, without charge to the Holder. Upon surrender or cancellation of any one or more temporary Bonds, the Issuer shall execute and the Trustee shall authenticate and deliver and exchange therefor a like principal amount of definitive Bonds of the same Class and of authorized denominations. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits under this Indenture as Definitive Bonds of the same Class.

SECTION 2.07. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.

The Issuer shall cause to be kept a register (the “Bond Register”) in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Bonds and the registration of transfers of Bonds. The Trustee is hereby initially appointed “Bond Registrar” for the purpose of registering Bonds and transfers of Bonds as herein provided. Upon any resignation of any Bond Registrar appointed by the Issuer, the Issuer shall promptly appoint a successor or, in the absence of such appointment, shall assume the duties of Bond Registrar.

At any time the Trustee is not also the Bond Registrar, the Trustee shall be a co-Bond Registrar. The Issuer shall cause each co-Bond Registrar to furnish the Bond Registrar, promptly after each authentication of a Bond by it, appropriate information with respect thereto for entry by the Bond Registrar into the Bond Register. If the Trustee shall at any time not be authorized to keep and maintain the Bond Register, the Trustee shall have the right to inspect such Bond Register at all reasonable times and to rely conclusively upon a certificate of the Person in charge of the Bond Register as to the names and addresses of the Holders of the Bonds and the principal amounts and numbers of such Bonds so held.

Upon surrender for registration of transfer of any Bond at the office or agency of the Issuer to be maintained as provided in Section 3.02, the Issuer shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of any authorized denominations and of a like aggregate principal amount and Class.

At the option of the Holder, Bonds may be exchanged for other Bonds of any authorized denominations, and of a like aggregate initial principal amount and Class, upon surrender of the Bonds to be exchanged at such office or agency. Whenever any Bonds are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and deliver, the Bonds which the Bondholder making the exchange is entitled to receive.

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All Bonds issued upon any registration of transfer or exchange of Bonds shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Bonds surrendered upon such registration of transfer or exchange.

Every Bond presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Trustee duly executed by the Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or exchange of Bonds, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge as may be imposed in connection with any registration of transfer or exchange of Bonds, other than exchanges pursuant to Section 2.08 not involving any transfer.

SECTION 2.08. MUTILATED, DESTROYED, LOST OR STOLEN BONDS.

If (1) any mutilated Bond is surrendered to the Trustee or the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Bond and (2) there is delivered to the Trustee such security or indemnity as may be required by the Trustee to save the Issuer and the Trustee harmless, then, in the absence of notice to the Issuer or the Trustee that such Bond has been acquired by a bona fide purchaser, the Issuer shall execute and upon its request the Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond or Bonds of the same tenor, aggregate initial principal amount and Class bearing a number not contemporaneously outstanding. If, after the delivery of such new Bond, a bona fide purchaser of the original Bond in lieu of which such new Bond was issued presents for payment such original Bond, the Issuer and the Trustee shall be entitled to recover such new Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expenses incurred by the Issuer or the Trustee in connection therewith. If any such mutilated, destroyed, lost or stolen Bond shall have become or shall be about to become due and payable, or shall have become subject to redemption in full, instead of issuing a new Bond, the Issuer may pay such Bond without surrender thereof, except that any mutilated Bond shall be surrendered.

Upon the issuance of any new Bond under this Section, the Issuer may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Bond issued pursuant to this Section in lieu of any destroyed, lost or stolen Bond shall constitute an original additional contractual obligation of the Issuer, whether or not the destroyed, lost or stolen Bond shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Bonds duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Bonds.

SECTION 2.09. PAYMENTS OF PRINCIPAL AND INTEREST.

(a) Each payment of principal of and interest on a Book Entry Bond shall be paid to the Depository, which shall credit the amount of such payments to the accounts of its Depository Participants in accordance with its normal procedures. Each Depository Participant shall be responsible for disbursing such payments to the Beneficial Owners of the Book Entry Bonds that it represents and to each indirect participating brokerage firm (a “brokerage firm” or “indirect participating firm”) for which it acts as agent. Each brokerage firm shall be responsible for disbursing funds to the Beneficial Owners of the Book Entry Bonds that it represents. All such credits and disbursements are to be made by the Depository and the Depository Participants in accordance with the provisions of the Bonds. Neither the Trustee, the Bond Registrar nor the Issuer shall have any responsibility for such credits and disbursements.

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Each payment of principal of and interest on a Definitive Bond shall be paid to the Person in whose name such Bond (or one or more Predecessor Bonds) is registered at the close of business on the Record Date or Optional Redemption Record Date, for such Payment Date or Optional Redemption Date, by check mailed to such Person’s address as it appears in the Bond Register on such Record Date or the Optional Redemption Record Date, except for the final installment of principal payable with respect to such Bond, which shall be payable as provided in Section 2.09(b).

All payments of principal of and interest on the Bonds shall be made only from the Trust Estate and any other assets of the Issuer, and each Holder of the Bonds, by its acceptance of the Bonds, agrees that it will have recourse solely against such Trust Estate and such other assets of the Issuer and that neither the Owner Trustee in its individual capacity, the Owner nor any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for any amounts payable, or performance due, under the Bonds or this Indenture.

(b) All reductions in the principal amount of a Bond (or one or more Predecessor Bonds) effected by payments of installments of principal made on any Payment Date or Optional Redemption Date shall be binding upon all Holders of such Bond and any Bond issued upon transfer thereof or in exchange therefor or in lieu thereof. The final installment of principal of each Bond (including the Redemption Price of any Bond called for optional redemption, if such optional redemption will result in payment of the entire unpaid principal amount of any such Bond) shall be payable only upon presentation and surrender thereof on or after the Payment Date or Optional Redemption Date therefor at the office or agency of the Issuer maintained by it for such purpose in the Borough of Manhattan, the City of New York, State of New York, pursuant to Section 3.02. Whenever the Trustee expects that the entire remaining unpaid principal amount of any Bond will become due and payable on the next Payment Date, it shall, no later than five days prior to such Payment Date, mail or cause to be mailed to the Holder of each Bond as of the close of the business on such otherwise applicable Record Date a notice to the effect that:

(i) the Trustee expects that funds sufficient to pay such final installment will be available in the Distribution Account on such Payment Date; and

(ii) if such funds are available, such final installment will be payable on such Payment Date, but only upon presentation and surrender of such Bond at the office or agency of the Issuer maintained for such purpose pursuant to Section 3.02 (the address of which shall be set forth in such notice).

Notices in connection with optional redemptions of Bonds shall be mailed to Holders in accordance with Section 10.02.

SECTION 2.10. PERSONS DEEMED OWNERS.

Prior to due presentment for registration of transfer of any Bond, the Issuer, [the Bond Insurer], the Trustee, any Agent and any other agent of the Issuer, [the Bond Insurer], or the Trustee shall treat the Person in whose name any Bond is registered as the owner of such Bond (a) on the applicable Record Date or Optional Redemption Record Date for the purpose of receiving payments of the principal of, and interest on, such Bond and (b) on any other date for all other purposes whatsoever, whether or not such Bond is overdue, and neither the Issuer, [the Bond Insurer], the Trustee, any Agent nor any other agent of the Issuer or the Trustee shall be affected by notice to the contrary.

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SECTION 2.11. CANCELLATION.

All Bonds surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Issuer may at any time deliver to the Trustee for cancellation any Bond previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Trustee. No Bonds shall be authenticated in lieu of or in exchange for any Bonds cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Bonds held by the Trustee shall be held by the Trustee in accordance with its standard retention policy, unless the Issuer shall direct by an Issuer Order that they be destroyed or returned to it.

SECTION 2.12. AUTHENTICATION AND DELIVERY OF BONDS.

The Bonds may be executed by the Issuer and delivered to the Trustee for authentication, and thereupon the same shall be authenticated and delivered by the Trustee, upon Issuer Request and upon receipt by the Trustee of the following:

(a) an Issuer Order authorizing the execution, authentication and delivery of the Bonds and specifying the Classes, the Stated Maturity of the final installment of principal, the principal amount and the Bond Interest Rate, of each Class of such Bonds to be authenticated and delivered;

(b) an Issuer Order authorizing the execution and delivery of this Indenture;

(c) one or more Opinions of Counsel addressed to the Trustee, complying with the requirements of Section 11.01, reasonably satisfactory in form and substance to the Trustee, and to the effect that:

(i) all instruments furnished to the Trustee by the Issuer pursuant to this Section 2.12 in connection with the Bonds conform in all material respects to the requirements of this Indenture and constitute all the documents required to be delivered under this Section 2.12 for the Trustee to authenticate and deliver the Bonds (counsel rendering such opinion or opinions need not express any opinion as to whether the Pledged Mortgages Granted to the Trustee as security conform to the requirements of this Indenture);

(ii) all conditions precedent provided for in this Indenture relating to the authentication and delivery of the Bonds have been complied with in all material respects (counsel rendering such opinion or opinions need not express any opinion as to the matters set forth in the parenthetical clause at the end of paragraph (i) above or as to whether the amount of cash or other collateral, if any, delivered to the Trustee pursuant to any subsection of this Section 2.12 is the requisite amount);

(iii) the Bank has corporate power to execute and deliver the Deposit Trust Agreement, the Deposit Trust Agreement authorizes the Issuer to execute and deliver the Bonds and this Indenture, and to issue the Bonds, and the Owner Trustee has duly taken all necessary action under the Deposit Trust Agreement for those purposes;

(iv) the Issuer is a statutory business trust created under the laws of the State of Delaware and duly authorized by the Deposit Trust Agreement;

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(v) assuming due authorization, execution and delivery thereof by the Trustee, this Indenture will be the legally valid and binding obligation of the Issuer, enforceable against the Issuer in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws and equitable principles relating to or limiting creditors’ rights generally and such counsel need express no opinion as to the availability of equitable remedies;

(vi) the Bonds, when issued, delivered, authenticated and paid for, will be the legally valid and binding obligations of the Issuer, entitled to the benefits of this Indenture, and enforceable against the Issuer in accordance with their terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws and equitable principles relating to or limiting creditors’ rights generally and such counsel need express no opinion as to the availability of equitable remedies;

(vii) assuming due execution and delivery thereof by the Trustee and by the Master Servicer, the Master Servicing Agreement constitutes the legally valid and binding obligation of the Master Servicer and of the Issuer, respectively, enforceable against the Master Servicer and the Issuer in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws and equitable principles relating to or limiting creditors’ rights generally and such counsel need express no opinion as to the availability of equitable remedies;

(viii) the Mortgage Notes included in the Original Pledged Mortgages have been duly and validly assigned, delivered and pledged to the Trustee to the extent contemplated by this Indenture, and this Indenture together with such assignment, delivery and pledge to the Trustee, creates as security for the Bonds a valid and perfected security interest of first priority in such Mortgage Notes, except to the extent limited in the event (A) the Trustee relinquishes possession of any such Mortgage Note, (B) the Depositor, the Issuer, the Master Servicer or any Servicer transfers any such Mortgage Note or the related Mortgage to a bona fide purchaser for value without notice prior to notification to the Mortgagor of the assignment to the Trustee of such Mortgage Note or due recordation of the Assignment to the Trustee of the related Mortgage or (C) the Depositor, the Issuer, the Master Servicer or any Servicer discharges any such Mortgage Note or the related Mortgage prior to such notification or recordation; the Mortgages delivered to the Trustee with the Original Mortgage Notes will continue to secure the Mortgage Notes included in the Original Pledged Mortgages, as though, and to the same extent as if, such Mortgage Notes had not been assigned, delivered and pledged; and it is not necessary to record or file this Indenture or to take any other action, except as set forth above, in order to make effective the lien and security interest created by this Indenture in the Mortgage Notes included in the Original Pledged Mortgages;

(ix) this Indenture has been duly qualified under the TIA; and

(x) the Issuer’s registration statement with respect to the Bonds has become effective under the Securities Act of 1933, as amended, and, to the best of such counsel’s knowledge, no stop order suspending the effectiveness of such registration statement has been issued and is in effect under such act and no proceedings for that purpose have been instituted or are pending under such act.

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In rendering the opinions set forth above, such counsel may rely upon officers’ certificates of the Depositor, the Owner Trustee, the Issuer, any Servicer, the Master Servicer and the Trustee, without independent confirmation or verification, as to the following matters and as to such other matters as shall be reasonably acceptable to the Trustee: (A) the accuracy of the descriptions of the Mortgage Notes included in the Original Pledged Mortgages and the conformity thereof to the descriptions in this Indenture, (B) the ownership by [______________], the Depositor and the Issuer of such Mortgage Notes free and clear of any lien, claim, charge or interest of any kind of any third party, (C) the physical delivery of such Mortgage Notes to the Trustee, (D) the absence of any evidence appearing on any such Mortgage Note of any right or interest inconsistent with the opinions expressed, and (E) the form of endorsement approved by such counsel having been made on each such Mortgage Note. In rendering the opinions set forth above, such counsel need express no opinion as to (A) the perfection of the security interest in any collateral not governed by Article 9 of the Uniform Commercial Code of the State of California, (B) the existence of, or the priority of the security interest created by the Indenture against, any liens or other interests which arise by operation of law and which do not require any filing or similar action in order to take priority over a perfected security interest or (C) the priority of the security interest created by this Indenture with respect to any claim or lien in favor of the United States or any agency or instrumentality thereof (including federal tax liens and liens arising under Title IV of the Employee Retirement Income Security Act of 1974, as amended).

(d) an Officers’ Certificate complying with the requirements of Section 11.01 and stating that:

(i) the Issuer is not in Default under this Indenture and the issuance of the Bonds will not result in any breach of any of the terms, conditions or provisions of, or constitute a default under, the Deposit Trust Agreement or any indenture, mortgage, deed of trust or other agreement or instrument to which the Issuer is a party or by which it is bound, or any order of any court or administrative agency entered in any proceeding to which the Issuer is a party or by which it may be bound or to which it may be subject, and that all conditions precedent provided in this Indenture relating to the authentication and delivery of the Bonds have been complied with;

(ii) the Issuer is the owner of each Original Pledged Mortgage, free and clear of any lien, security interest or charge, has not assigned any interest or participation in any such Pledged Mortgage (or, if any such interest or participation has been assigned, it has been released) and has the right to Grant each such Original Pledged Mortgage to the Trustee;

(iii) the information set forth in the Pledged Mortgage Schedule attached as Schedule A to this Indenture is true and correct in all material respects as of the Closing Date;

(iv) the Issuer has Granted to the Trustee all of its right, title and interest in each Pledged Mortgage;

(v) as of the Closing Date, no lien in favor of the United States described in Section 6321 of the Code, or lien in favor of the Pension Benefit Guaranty Corporation described in Section 4068(a) of the Employee Retirement Income Security Act of 1974, as amended, has been filed as described in subsections 6323(f) and 6323(g) of the Code upon any property belonging to the Issuer; and

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(vi) attached thereto is a true and correct copy of letters signed by the Rating Agencies confirming that the Senior Bonds have been rated AAA by [ ] and [ ] and that the Class [B-1] Bonds have been rated [ ] by [ ].

(e) an executed counterpart of the Master Servicing Agreement.

(f) a certificate of one or more Independent Persons, whose regular business activity includes valuing securities and mortgage loans similar to the Original Pledged Mortgages, of the fair value of the Original Pledged Mortgages, which fair value, as so certified, will be equal to or in excess of the sum of the Original Senior Class Principal Amount and the Original Subordinated Class Principal Amount, and which determination of fair value shall be as of a date not earlier than three Business Days prior to the Closing Date.

SECTION 2.13. MATTERS RELATING TO BOOK ENTRY BONDS.

(a) If the Bonds are listed on any stock exchange at any time after the Closing Date, the Issuer shall, if required as a condition to such listing, prepare and deliver to the Trustee Bonds in substantially the same form as the Bonds issued on the Closing Date, but with such other additional features and such modifications, if any, as shall be necessary or appropriate in order to comply with the requirements of such stock exchange for the listing of the Bonds on such exchange. Bonds in the form issued on the Closing Date shall thereafter be exchangeable for Bonds in such revised form to the same extent as temporary Bonds are exchangeable for Definitive Bonds pursuant to Section 2.06.

(b) Each Class of Book Entry Bonds will be issued in the form of a single typewritten bond certificate (each, a “DTC Certificate”) to be delivered to the Depository by the Issuer substantially in the respective forms for each such Class attached as Exhibits hereto. The DTC Certificate for each such Class of Book Entry Bonds shall be initially registered on the Bond Register in the name of the nominee of such Depository and no Beneficial Owner will receive a certificate representing its interests in any Class of Book Entry Bonds except in the event that the Trustee issues Definitive Bonds, as provided in Section 2.14. Pursuant to the Letter Agreement, while each Class of the Book Entry Bonds remains outstanding and such Depository remains the Holder, it will agree to make book-entry transfers among the Depository Participants and receive and transmit payments of principal and interest on the Book Entry Bonds until and unless the Trustee authenticates and delivers Definitive Bonds to the Beneficial Owners of the Book Entry Bonds or their nominees, as described in Section 2.14.

(c) Prior to Book Entry Termination, each Class of Book Entry Bonds will remain registered in the name of the Depository or its nominee and at all times: (i) registration of the Book Entry Bonds may not be transferred by the Trustee or the Bond Registrar except to another Depository; (ii) the Depository shall maintain book-entry records with respect to the Beneficial Owners and with respect to ownership and transfers of such Book Entry Bonds; (iii) ownership and transfers of registration of the Book Entry Bonds on the books of the Depository shall be governed by applicable rules established by the Depository; (iv) the Depository may collect its usual and customary fees, charges and expenses from its Depository Participants; (v) the Trustee shall deal with the Depository, Depository Participants and interest participating firms as representatives of the Beneficial Owners of the Book Entry Bonds for purposes of exercising the rights of holders under the Indenture, and requests and directions for and votes of such representatives shall not be deemed to be inconsistent if they are made with respect to different Beneficial Owners; and (vi) the Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its Depository Participants and furnished by the Depository Participants with respect to indirect participating firms and Persons shown on the books of such indirect participating firms as direct or indirect Beneficial Owners.

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All transfers by Beneficial Owners of Book Entry Bonds shall be made in accordance with the procedures established by the Depository Participant or brokerage firm representing such Beneficial Owner. Each Depository Participant shall only transfer Book Entry Bonds of Beneficial Owners it represents or of brokerage firms for which it acts as agent in accordance with the Depository’s normal procedures.

SECTION 2.14. TERMINATION OF BOOK ENTRY SYSTEM.

(a) The book entry system through the Depository with respect to any Class of Book Entry Bonds may be terminated upon the happening of any of the following:

(i) The Depository or the Issuer advises the Trustee in writing that the Depository is no longer willing or able to properly discharge its responsibilities as Depository and the Issuer is unable to locate a qualified successor clearing agency satisfactory to the Trustee and the Issuer;

(ii) The Issuer at its option advises the Trustee in writing that it elects to terminate the book entry system through the Depository; or

(iii) After the occurrence of an Event of Default (at which time the Trustee shall use all reasonable efforts to promptly notify each Beneficial Owner through the Depository of such Event of Default when such notice shall be given pursuant to Section 6.02), the Beneficial Owners of a majority in aggregate Class Principal Amount of the Book Entry Bonds together advise the Trustee and the Depository through the Depository Participants in writing that the continuation of a book entry system through the Depository is no longer in the best interests of the Beneficial Owners.

(b) Upon the occurrence of any event described in subsection (a) above, the Trustee shall notify all Beneficial Owners, through the Depository, of the occurrence of any such event and of the availability of Definitive Bond certificates to Beneficial Owners requesting the same, in an aggregate Class Principal Amount representing the interest of each, making such adjustments and allowances as it may find necessary or appropriate as to accrued interest, if any, and previous calls for redemption. Definitive Bond certificates shall be issued only upon surrender to the Trustee of the Book Entry Bond by the Depository, accompanied by registration instructions for the Definitive Bond certificates. Neither the Issuer nor the Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon issuance of the Definitive Bond certificates, all references herein to obligations imposed upon or to be performed by the Depository shall cease to be applicable and the provisions relating to Definitive Bonds shall be applicable.

SECTION 2.15. ADDITIONAL BONDS.

Notwithstanding the requirements of Article II hereof, the Issuer may without the consent of any Bondholder, pledge additional Mortgage Collateral to the Trust Estate subsequent to the issuance of the Bonds and may issue Additional Bonds of any Class then Outstanding or of one or more additional Classes. The Issuer’s right to issue any Additional Bonds is subject to receipt of written confirmation from each Rating Agency to the effect that the issuance of such Additional Bonds will not adversely affect the rating of any Outstanding Bonds of such Series and to satisfaction of the conditions precedent for authentication and delivery of Bonds by the Trustee in Section 2.12.

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ARTICLE III

COVENANTS

SECTION 3.01. PAYMENT OF BONDS.

The Issuer will pay or cause to be duly and punctually paid the principal of, and interest on, the Bonds in accordance with the terms of the Bonds and this Indenture.

SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY.

The Issuer will maintain in the Borough of Manhattan, the City of New York, the State of New York an office or agency where Bonds may be presented or surrendered for payment or may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Issuer in respect of the Bonds and this Indenture may be served. The Issuer will give prompt written notice to the Trustee of the location and any change in the location, of such office or agency. Until written notice of any change in the location of such office or agency is delivered to the Trustee or if at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, Bonds may be so presented and surrendered, and such notices and demands may be made or served, at the office of ___________________________________________ at _______________________.

The Issuer may also from time to time designate one or more other offices or agencies (in or outside the City of New York) where the Bonds may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that (i) no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency in the Borough of Manhattan, the City of New York, the State of New York, for the purposes set forth in the preceding paragraph, (ii) presentations or surrenders of Bonds for payment may be made only in the City of New York, the State of New York or at the Corporate Trust Office of the Trustee and (iii) any designation of an office or agency for payment of Bonds shall be subject to Section 3.03. The Issuer will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

SECTION 3.03. MONEY FOR BOND PAYMENTS TO BE HELD IN TRUST.

All payments of amounts due and payable with respect to any Bonds which are to be made from amounts withdrawn from the Distribution Account pursuant to Section 8.02(c) or Section 5.08 shall be made on behalf of the Issuer by the Trustee or by a Paying Agent, and no amounts so withdrawn from the Distribution Account for payments of Bonds shall be paid over to the Issuer under any circumstances except as provided in this Section 3.03 or in Section 5.08.

If the Issuer shall have a Paying Agent that is not also the Bond Registrar, it shall furnish, or cause the Bond Registrar to furnish, no later than

(a) the fifth calendar day after each Record Date, and

(b) the first Business Day after the Optional Redemption Record Date applicable to the Optional Redemption Date,

a list, in such form as such Paying Agent may reasonably require, of the names and addresses of the Holders of Bonds and of the number of Individual Bonds of each Class held by each such Holder.

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Whenever the Issuer shall have a Paying Agent other than the Trustee, it will, on or before the Business Day next preceding each Payment Date and Optional Redemption Date, direct the Trustee to deposit with such Paying Agent an aggregate sum sufficient to pay the amounts then becoming due (to the extent funds are then available for such purpose in the Distribution Account), such sum to be held in trust for the benefit of the Persons entitled thereto. Any moneys deposited with a Paying Agent in excess of an amount sufficient to pay the amounts then becoming due on the Bonds with respect to which such deposit was made shall, upon Issuer Order, be paid over by such Paying Agent to the Trustee for application in accordance with Article VIII.

Any Paying Agent shall be appointed by Issuer Order. The Issuer shall not appoint any Paying Agent which is not, at the time of such appointment, a depository institution or trust company whose obligations would be Permitted Investments pursuant to clause (iv) of the definition of the term “Permitted Investments”. The Issuer will cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee (and if the Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section, that such Paying Agent will:

(1) allocate all sums received for payment to the Holders of Bonds on each Payment Date and Optional Redemption Date among such Holders in the proportion specified in the applicable Payment Date Statement, as the case may be, in each case to the extent permitted by applicable law;

(2) hold all sums held by it for the payment of amounts due with respect to the Bonds in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

(3) if such Paying Agent is not the Trustee, immediately resign as a Paying Agent and forthwith pay to the Trustee all sums held by it in trust for the payment of the Bonds if at any time it ceases to meet the standards set forth above required to be met by a Paying Agent at the time of its appointment;

(4) if such Paying Agent is not the Trustee, give the Trustee notice of any Default by the Issuer (or any other obligor upon the Bonds) in the making of any payment required to be made with respect to any Bonds for which it is acting as Paying Agent;

(5) if such Paying Agent is not the Trustee, at any time during the continuance of any such Default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent; and

(6) comply with all requirements of the Code, and all regulations thereunder, with respect to the withholding from any payments made by it on any Bonds of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith; provided, however, that with respect to withholding and reporting requirements applicable to original issue discount (if any) on any Class of Bonds, the Issuer has provided the calculations pertaining thereto to the Trustee.

The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or any other purpose, by Issuer Order direct any Paying Agent, if other than the Trustee, to pay to the Trustee all sums held in trust by such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

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Subject to applicable escheat laws, any money held by the Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Bond and remaining unclaimed for six years after such amount has become due and payable to the Holder of such Bond shall be discharged from such trust and, upon its written request, paid to the Issuer; and the Holder of such Bond shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Trustee or such Paying Agent with respect to such trust money shall thereupon cease. The Trustee may, but shall not be required to, adopt and employ, at the expense of the Issuer, any reasonable means of notification of such repayment (including, but not limited to, mailing notice of such repayment to Holders whose Bonds have been called but have not been surrendered for redemption or whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Trustee or any Agent, at the last address of record for each such Holder).

SECTION 3.04. CORPORATE EXISTENCE OF OWNER TRUSTEE.

(a) Subject to subsections (b) and (c) below, the Owner Trustee will keep in full effect its existence, rights and franchises as a bank and trust company under the laws of the state of its incorporation.

(b) Any corporation into which the Owner Trustee may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Owner Trustee shall be a party, shall be the successor Owner Trustee under this Indenture without the execution or filing of any paper, instrument or further act to be done on the part of the parties hereto, anything herein, or in any agreement relating to such merger or consolidation, by which any such Owner Trustee may seek to retain certain powers, rights and privileges therefore obtaining for any period of time following such merger or consolidation, to the contrary notwithstanding.

(c) Any successor to the Owner Trustee appointed pursuant to Section 10.01 of the Deposit Trust Agreement shall be the successor Owner Trustee under this Indenture without the execution or filing of any paper, instrument or further act to be done on the part of the parties hereto.

(d) Upon any consolidation or merger of or other succession to the Owner Trustee in accordance with this Section 3.04, the Person formed by or surviving such consolidation or merger (if other than the Issuer) or the Person succeeding to the Owner Trustee under the Deposit Trust Agreement may exercise every right and power of the Owner Trustee, on behalf of the Issuer, under this Indenture with the same effect as if such Person had been named as the Owner Trustee herein.

SECTION 3.05. PROTECTION OF TRUST ESTATE.

(a) The Issuer will from time to time execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action as may be necessary or advisable to:

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IMAGE OMITTEDThe Issuer hereby designates the Trustee its agent and attorney-in-fact to execute any financing statement, continuation statement or other instrument required pursuant to this Section 3.05; provided, however, that such designation shall not be deemed to create a duty in the Trustee to monitor the compliance of the Issuer with the foregoing covenants; and provided further, however, that the duty of the Trustee to execute any instrument required pursuant to this Section 3.05 shall arise only if the Trustee has knowledge pursuant to Section 6.01(d) of the occurrence of a failure of the Issuer to comply with provisions of this Section 3.05.

(b) Except as permitted by Section 8.08, the Trustee shall not remove any portion of the Trust Estate that consists of money or is evidenced by an instrument, certificate or other writing from the jurisdiction in which it was held at the date of the most recent Opinion of Counsel delivered pursuant to Section 3.06 (or from the jurisdiction in which it was held, or to which it is intended to be removed, as described in the Opinion of Counsel delivered at the Closing Date pursuant to Section 2.12(c), if no Opinion of Counsel has yet been delivered pursuant to Section 3.06) or cause or permit ownership or the pledge of any portion of the Trust Estate that consists of book-entry securities to be recorded on the books of a Person located in a different jurisdiction from the jurisdiction in which such ownership or pledge was recorded at such time unless the Trustee shall have first received an Opinion of Counsel to the effect that the lien and security interest created by this Indenture with respect to such property will continue to be maintained after giving effect to such action or actions.

SECTION 3.06. OPINIONS AS TO TRUST ESTATE.

On or before February 15 in each calendar year, beginning with [the first calendar year commencing more than three months after the Closing Date, the Issuer shall furnish to the Trustee an Opinion of Counsel reasonably satisfactory in form and substance to the Trustee either stating that, in the opinion of such counsel, such action has been taken as is necessary to maintain the lien and security interest created by this Indenture and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest. Such Opinion of Counsel shall also describe all such actions, if any, that will, in the opinion of such counsel, be required to be taken to maintain the lien and security interest of this Indenture with respect to the Trust Estate until May 15 in the following calendar year.

SECTION 3.07. PERFORMANCE OF OBLIGATIONS; MASTER SERVICING AGREEMENT.

(a) The Issuer shall punctually perform and observe all of its obligations and agreements contained in the Deposit Trust Agreement. The Issuer and the Trustee shall punctually perform and observe all of their respective obligations and agreements contained in the Master Servicing Agreement.

(b) The Issuer shall not take any action and will use its reasonable good faith efforts not to permit any action to be taken by others that would release any Person from any of such Person’s covenants or obligations under any of the Mortgage Documents or under any instrument included in the Trust Estate, or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any of the Mortgage Documents, except as expressly provided or permitted in this Indenture and the Master Servicing Agreement or such Mortgage Document or other instrument or unless such action will not adversely affect the interests of the Holders of the Bonds.

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(c) The Issuer shall monitor the performance of the Master Servicer under the Master Servicing Agreement, and shall use its reasonable good faith efforts to cause the Master Servicer duly and punctually to perform all of its duties and obligations thereunder. Upon the occurrence of a Servicing Default of which an Authorized Officer of the Issuer has actual knowledge under the Master Servicing Agreement, the Issuer shall promptly notify the Trustee thereof, and shall specify in such notice the action, if any, the Issuer is taking in respect of such Servicing Default. So long as any such Servicing Default shall be continuing, the Trustee may (i) terminate all of the rights and powers of the Master Servicer pursuant to the applicable provisions of the Master Servicing Agreement; (ii) exercise any rights it may have to enforce the Master Servicing Agreement against the Master Servicer; and/or (iii) waive any such Servicing Default under the Master Servicing Agreement or take any other action with respect to such Servicing Default as is permitted thereunder.

(d) Upon any termination by the Trustee of the Master Servicer’s rights and powers pursuant to the Master Servicing Agreement, the rights and powers of the Master Servicer with respect to the Pledged Mortgages shall vest in the Trustee and the Trustee shall be the successor in all respects to the Master Servicer in its capacity as Master Servicer with respect to such Pledged Mortgages under the Master Servicing Agreement, until the Trustee shall have appointed, with the consent of the Issuer, such consent not to be unreasonably withheld, and the Rating Agencies, and in accordance with the applicable provisions of the Master Servicing Agreement a new FNMA- or FHLMC-approved Person to serve as successor to the Master Servicer. With such consent, the Trustee may elect to continue to serve as successor Master Servicer under the Master Servicing Agreement. Upon appointment of a successor Master Servicer, the Trustee and such successor Master Servicer shall enter into a master servicing agreement in a form substantially similar to the Master Servicing Agreement. In connection with any such appointment, the Trustee may make such arrangements for the compensation of such successor as it and such successor shall agree, but in no event shall such compensation of any successor Master Servicer (including the Trustee) be in excess of that payable to the Master Servicer under the Master Servicing Agreement.

(e) Upon any termination of the Master Servicer’s rights and powers pursuant to the Master Servicing Agreement, the Trustee shall promptly notify the Issuer and the Rating Agencies, specifying in such notice that the Trustee or any successor Master Servicer, as the case may be, has succeeded the Master Servicer under the Master Servicing Agreement, which notice shall also specify the name and address of any such successor Master Servicer.

SECTION 3.08. INVESTMENT COMPANY ACT.

The Issuer shall at all times conduct its operations so as not to be subject to the Investment Company Act of 1940, as amended (or any successor statute), and the rules and regulations thereunder.

SECTION 3.09. NEGATIVE COVENANTS.

The Issuer shall not:

(a) sell, transfer, exchange or otherwise dispose of any portion of the Trust Estate except as expressly permitted by this Indenture or the Master Servicing Agreement;

(b) claim any credit on, or make any deduction from, the principal of, or interest on, any of the Bonds by reason of the payment of any taxes levied or assessed upon any portion of the Trust Estate;

(c) engage in any business or activity other than in connection with, or relating to, the issuance of the Bonds and the Investor Certificate pursuant to this Indenture and the Deposit Trust Agreement, respectively, or amend Section 2.03 or Section 11.01 of the Deposit Trust Agreement as in effect on the Closing Date without, in each case, the consent of the Holders of 66 2/3% of the aggregate Class Principal Amount of the Bonds then Outstanding;

(d) incur any indebtedness or assume or guaranty any indebtedness of any Person, except for such indebtedness as may be incurred by the Issuer in connection with the issuance of the Bonds pursuant to this Indenture;

(e) dissolve or liquidate in whole or in part; or

(f) (i) permit the validity or effectiveness of this Indenture or any Grant to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations under this Indenture, except as may be expressly permitted hereby, (ii) permit any lien, charge, security interest, mortgage or other encumbrance (other than the lien of this Indenture, the lien created by Section 8.04 of the Deposit Trust Agreement, as in effect on the Closing Date, or any Permitted Encumbrance) to be created on or extended to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof or (iii) permit the lien of this Indenture not to constitute a valid perfected first priority security interest in the Trust Estate.

SECTION 3.10. ANNUAL STATEMENT AS TO COMPLIANCE.

On or before 120 days after the end of the first fiscal year of the Issuer which ends more than three months after the Closing Date, and each fiscal year thereafter, the Issuer shall deliver to the Trustee a written statement, signed by an Authorized Officer, stating that:

(1) a review of the fulfillment by the Issuer during such year of its obligations under this Indenture has been made under such officer’s supervision; and

(2) to the best of such officer’s knowledge, based on such review, the Issuer has fulfilled all of its obligations under this Indenture throughout such 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 thereof.

SECTION 3.11. RECORDING OF ASSIGNMENTS.

The Issuer shall cause the Assignments of the Pledged Mortgages securing the Bonds to be duly recorded in the manner specified in Section 2(a)(i) of the Master Servicing Agreement. If the Issuer fails to cause the Assignment to be recorded within the time limit provided thereunder, the Issuer shall cause the Master Servicer to purchase such corresponding Pledged Mortgage pursuant to Section 8.04 and the applicable provisions of the Master Servicing Agreement.

SECTION 3.12. LIMITATION OF LIABILITY OF .

It is expressly understood and agreed by the parties hereto that (a) this Indenture is executed and delivered by _________________________, not individually or personally but solely as owner trustee of Sequoia Mortgage Trust 201_-_ under the Deposit Trust Agreement, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by ________________________, but is made and intended for the purpose for binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on ___ _____________________, other than any liability arising out of its gross negligence, bad faith or willful misconduct, and (d) under no circumstances shall ________________________ be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Indenture or the other Operative Agreements.

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ARTICLE IV

SATISFACTION AND DISCHARGE

SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE.

Whenever the following conditions shall have been satisfied:

(1) either

(A) all Bonds theretofore authenticated and delivered (other than (i) Bonds which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.08, and (ii) Bonds for whose payment money has theretofore been deposited in trust and thereafter repaid to the Issuer, as provided in Section 3.03) have been delivered to the Trustee for cancellation; or

(B) all Bonds not theretofore delivered to the Trustee for cancellation

(i) have become due and payable, or

(ii) will become due and payable at the Stated Maturity of the final installment of the principal thereof within one year, or

(iii) are to be called for redemption within one year under irrevocable arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer, in the case of clauses (B)(i), (B)(ii) or (B)(iii) above, has deposited or caused to be deposited with the Trustee, in trust for such purpose, an amount sufficient to pay and discharge the entire indebtedness on such Bonds not theretofore delivered to the Trustee for cancellation, for principal and interest to the Stated Maturity of their entire unpaid principal amount or to the applicable Redemption Date, as the case may be, and in the case of Bonds which were not paid at the Stated Maturity of their entire unpaid principal amount, for all overdue principal and all interest payable on such Bonds to the next succeeding Payment Date therefor;

(2) the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer; and

(3) the Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel reasonably satisfactory in form and substance to the Trustee each stating that all conditions precedent herein providing for the satisfaction and discharge of this Indenture have been complied with;

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then, upon Issuer Request, this Indenture and the lien, rights and interests created hereby shall cease to be of further effect, and the Trustee and each co-trustee and separate trustee, if any, then acting as such hereunder shall, at the expense of the Issuer, execute and deliver all such instruments as may be necessary to acknowledge the satisfaction and discharge of this Indenture and shall pay, or assign or transfer and deliver, to the Issuer or upon Issuer Order all Pledged Mortgages, cash, securities and other property held by it as part of the Trust Estate remaining after satisfaction of the conditions set forth in clauses (1) and (2) above.

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Issuer to the Trustee under Section 6.07, the obligations of the Trustee to the Issuer and the Holders of Bonds under Section 3.03, the obligations of the Trustee to the Holders of Bonds under Section 4.02 and the provisions of Article II with respect to lost, stolen, destroyed or mutilated Bonds, registration of transfers of Bonds and rights to receive payments of principal of, and interest on, the Bonds shall survive.

SECTION 4.02. APPLICATION OF TRUST MONEY.

All money deposited with the Trustee pursuant to Sections 3.03 and 4.01 shall be held in trust and applied by it, in accordance with the provisions of the Bonds and this Indenture, to the payment, either directly or through any Paying Agent, as the Trustee may determine, to the Persons entitled thereto, of the principal and interest for whose payment such money has been deposited with the Trustee.

ARTICLE V

DEFAULTS AND REMEDIES

SECTION 5.01. EVENT OF DEFAULT.

“Event of Default”, wherever used herein, means, with respect to Bonds issued hereunder, any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1) if the Issuer shall

(A) default in the payment when and as due of any installment of principal of or interest on any Bond, or

(B) default in the payment of the Redemption Price of any Bond which has been called for optional redemption pursuant to Article X;

(2) if the Issuer shall breach, or default in the due observance, of any one or more of the covenants set forth in clauses (a) through (e) of Section 3.09;

(3) if the Issuer shall breach, or default in the due observance or performance of, any other of its covenants in this Indenture, and such Default shall continue for a period of 30 days after there shall have been given, by registered or certified mail, to the Issuer by the Trustee, or to the Issuer and the Trustee [by the Bond Insurer, or, during the existence of a Bond Insurer Default] by the Holders of Bonds representing more than 50% of the aggregate Class Principal Amount of the Controlling Class, a written notice specifying such Default and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder;

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(4) if any representation or warranty of the Issuer made in this Indenture or any certificate or other writing delivered pursuant hereto or in connection herewith shall prove to be incorrect in any material respect as of the time when the same shall have been made and, within 30 days after there shall have been given, by registered or certified mail, written notice thereof to the Issuer by the Trustee, or to the Issuer and the Trustee by the Holders of Bonds representing more than 50% of the aggregate Class Principal Amount of the Controlling Class, the circumstance or condition in respect of which such representation or warranty was incorrect shall not have been eliminated or otherwise cured;

(5) the entry of a decree or order for relief by a court having jurisdiction in respect of the Issuer in an involuntary case under the federal bankruptcy laws, as now or hereafter in effect, or any other present or future federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or of any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or

(6) the commencement by the Issuer of a voluntary case under the federal bankruptcy laws, as now or hereafter in effect, or any other present or future federal or state bankruptcy, insolvency or similar law, or the consent by the Issuer to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or of any substantial part of its property or the making by the Issuer of an assignment for the benefit of creditors or the failure by the Issuer generally to pay its debts as such debts become due or the taking of corporate action by the Issuer in furtherance of any of the foregoing.

(a) Notwithstanding the foregoing, prior to the payment in full of the Senior Bonds, the failure of the Issuer to pay when and as due any installment of principal of or interest (regardless of the lapse of any grace period) on any Subordinated Bond shall not constitute an Event of Default hereunder. In addition, notwithstanding any applicable provision of this Indenture, upon payment in full of the Senior Bonds, the prior occurrence of any such shortfalls attributable to the Subordinated Bonds, which shortfalls have previously been paid in full, will not constitute an Event of Default hereunder in respect of the Subordinated Bonds. Subject to the foregoing, Section 5.01 of the Indenture shall otherwise apply in all respects to the Subordinated Bonds.

(b) Notwithstanding the foregoing, the failure of the Issuer to pay when and as due any installment of principal of (regardless of the lapse of any grace period) any Senior Bond shall not constitute an Event of Default hereunder unless the Senior Class Principal Amount exceeds the aggregate Stated Principal Balances of the Pledged Mortgages after application of all available amounts on deposit in the Distribution Account on a Payment Date. Subject to the foregoing, Section 5.01 of the Indenture shall otherwise apply in all respects to the Senior Bonds.

SECTION 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

If an Event of Default occurs and is continuing with respect to the Bonds, then and in every such case the Trustee or the Holders of Bonds representing more than 50% of the aggregate Class Principal Amount of the Controlling Class may declare all the Bonds to be immediately due and payable, by a notice in writing to the Issuer (and to the Trustee if given by Bondholders), and upon any such declaration such Bonds shall become immediately due and payable in an amount equal to:

(i) the aggregate Class Principal Amount of all Classes of Bonds,

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(ii) accrued and unpaid interest at the respective Bond Interest Rates on the aggregate Class Principal Amount through the date of acceleration, and

(iii) in the case of the Senior Bonds, interest (but only to the extent payment thereof shall be legally enforceable) on any overdue installments of interest on the Senior Bonds from the Stated Maturity of any such installments to the date of the acceleration at the Bond Interest Rate at which such interest accrued or such lower rate at which payment of such interest shall be legally enforceable.

At any time after such a declaration of acceleration of maturity of the Bonds has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of Bonds representing more than 50% of the aggregate Class Principal Amount of the Controlling Class, by written notice to the Issuer and the Trustee, may rescind and annul such declaration and its consequences if:

(1) the Issuer has paid or deposited with the Trustee a sum sufficient to pay:

(A) all payments of principal of, and interest on, all Bonds and all other amounts which would then be due hereunder or upon such Bonds if the Event of Default giving rise to such acceleration had not occurred; and

(B) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

(2) all Events of Default, other than the nonpayment of the principal of Bonds which have become due solely by such acceleration, have been cured or waived as provided in Section 5.15.

No such rescission shall affect any subsequent Default or impair any right consequent thereon.

SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

Subject to Section 5.05, the Issuer covenants that if an Event of Default shall occur and be continuing in respect to the Bonds and the Bonds have been declared due and payable and such declaration and its consequences have not been rescinded and annulled, the Issuer will, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders of the Bonds:

(i) the amounts specified in the first paragraph of Section 5.02, and

(ii) in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

If the Issuer fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Issuer or any other obligor upon the Bonds and collect, out of the Trust Estate (as defined in the Deposit Trust Agreement), wherever situated, of the Issuer, the moneys adjudged or decreed to be payable in the manner provided by law; provided, however, that neither the Bank nor any of its agents, officers, directors, employees, successors or assigns shall be personally liable for any amounts due under the Bonds or this Indenture.

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If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Bondholders by any Proceedings the Trustee deems appropriate to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or enforce any other proper remedy, including, without limitation, instituting a Proceeding prior to any declaration of acceleration of the Maturity of the Bonds for the collection of all amounts then due and unpaid on such Bonds, prosecuting such Proceeding to final judgment or decree, enforcing the same against the Issuer and collecting out of the property, wherever situated, of the Issuer the moneys adjudged or decreed to be payable in the manner provided by law.

SECTION 5.04. REMEDIES.

If an Event of Default shall have occurred and be continuing and the Bonds have been declared due and payable and such declaration and its consequences have not been rescinded and annulled, the Trustee (subject to Section 5.18, to the extent applicable) may do one or more of the following:

(a) institute Proceedings for the collection of all amounts then payable on the Bonds, or under this Indenture, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Issuer moneys adjudged due;

(b) in accordance with Section 5.18, sell the Trust Estate or any portion thereof or rights or interest therein, at one or more public or private Sales called and conducted in any manner permitted by law;

(c) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate; and

(d) exercise any remedies of a secured party under the Uniform Commercial Code and take any other appropriate action to protect and enforce the rights and remedies of the Trustee or the Holders of the Bonds hereunder.

SECTION 5.05. [RESERVED].

SECTION 5.06. TRUSTEE MAY FILE PROOFS OF CLAIM.

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, composition or other judicial Proceeding relative to the Issuer or any other obligor upon any of the Bonds or the property of the Issuer or of such other obligor or their creditors, the Trustee (irrespective of whether the Bonds shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Issuer for the payment of any overdue principal or interest) shall be entitled and empowered, by intervention in such Proceeding or otherwise to:

(i) file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the Bonds and file such other papers or documents and take such other actions as it deems necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Bondholders allowed in such Proceeding; and

(ii) collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any receiver, assignee, trustee, liquidator or sequestrator (or other similar official) in any such Proceeding is hereby authorized by each Bondholder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Bondholders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.07.

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Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Bondholder any plan of reorganization, arrangement, adjustment or composition affecting any of the Bonds or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Bondholder in any such Proceeding.

SECTION 5.07. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF BONDS.

All rights of action and claims under this Indenture or any of the Bonds may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any Proceeding relating thereto, and any such Proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be for the ratable benefit of the Holders of the Bonds in respect of which such judgment has been recovered. Any surplus shall be available, in accordance with Section 5.08, for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

SECTION 5.08. APPLICATION OF MONEY COLLECTED.

If the Bonds have been declared due and payable following an Event of Default and such declaration and its consequences have not been rescinded and annulled, any money collected by the Trustee with respect to the Bonds pursuant to this Article or otherwise and any monies that may then be held or thereafter received by the Trustee with respect to the Bonds shall be applied, after payment to the Trustee of such amounts as may be payable to it under Section 6.07, in the order, at the date or dates fixed by the Trustee and, in case of the distribution of the entire amount due on account of principal of, and interest on, such Bonds, upon presentation and surrender thereof:

First: To the payment of amounts then due and unpaid to any Servicer or the Master Servicer in respect of Nonrecoverable Advances made by such Servicer or the Master Servicer pursuant to the related Servicing Agreement or the Master Servicing Agreement;

Second: To the payment of amounts of interest and principal then due and unpaid upon the Outstanding Bonds in accordance with the priorities set forth in Section 2.03(b); and

Third: To the payment of the remainder, if any, to the Issuer or any other Person legally entitled thereto.

SECTION 5.09. LIMITATION ON SUITS.

No Holder of a Bond shall have any right to institute any Proceedings, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(1) such Holder has previously given written notice to the Trustee of a continuing Event of Default;

(2) the Holders of Bonds representing more than 50% of the aggregate Class Principal Amount of the Controlling Class shall have made written request to the Trustee to institute Proceedings in respect of such Event of Default in its own name as Trustee hereunder;

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(3) such Holder or Holders have offered to the Trustee indemnity in full against the costs, expenses and liabilities to be incurred in compliance with such request;

(4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such Proceeding; and

(5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of Bonds representing more than 50% of the aggregate Class Principal Amount of the Controlling Class;

it being understood and intended that no one or more Holders of Bonds shall have any right in any manner whatever by virtue of, or by availing themselves of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Bonds or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders of Bonds.

SECTION 5.10. UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL AND INTEREST.

Notwithstanding any other provision in this Indenture, other than the provisions hereof limiting the right to recover amounts due on a Bond to recovery from the property of the Issuer, the Holder of any Bond shall have the right, to the extent permitted by applicable law, which right is absolute and unconditional, to receive payment of each installment of interest on such Bond on the respective Stated Maturities of such installments of interest, to receive payment of each installment of principal of such Bond when due (or, in the case of any Bond called for redemption, on the date fixed for such redemption) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.

SECTION 5.11. RESTORATION OF RIGHTS AND REMEDIES.

If the Trustee or any Bondholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Bondholder, then and in every such case the Issuer, the Trustee and the Bondholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Bondholders shall continue as though no such Proceeding had been instituted.

SECTION 5.12. RIGHTS AND REMEDIES CUMULATIVE.

No right or remedy herein conferred upon or reserved to the Trustee or to the Bondholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

SECTION 5.13. DELAY OR OMISSION NOT WAIVER.

No delay or omission of the Trustee or of any Holder of any Bond to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Bondholders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Bondholders, as the case may be.

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SECTION 5.14. CONTROL BY BONDHOLDERS.

The Holders of Bonds representing more than 50% of the aggregate Class Principal Amount of the Controlling Class shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee; provided, however, that:

(1) such direction shall not be in conflict with any rule of law or with this Indenture;

(2) any direction to the Trustee to undertake a Sale of the Trust Estate shall be by the Holders of Bonds representing the percentage of the aggregate Class Principal Amount of the Controlling Class specified in Section 5.18(b)(1), unless Section 5.18(b)(2) is applicable; and

(3) [Reserved];

(4) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction;

provided, however, that, subject to Section 6.01, the Trustee need not take any action which it determines might involve it in liability or be unjustly prejudicial to the Bondholders not consenting.

SECTION 5.15. WAIVER OF PAST DEFAULTS.

The Holders of Bonds representing more than 50% of the aggregate Class Principal Amount of the Controlling Class may on behalf of the Holders of all the Bonds of such Class waive any past Default hereunder and its consequences, except a Default:

(1) in the payment of any installment of principal of, or interest on, any Bond; or

(2) in respect of a covenant or provision hereof which under Section 9.02 cannot be modified or amended without the consent of the Holder of each Outstanding Bond affected.

Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

SECTION 5.16. UNDERTAKING FOR COSTS.

All parties to this Indenture agree, and each Holder of any Bond by his or her acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Bondholder, or group of Bondholders, holding in the aggregate Bonds representing more than 10% of the aggregate Class Principal Amount of the Controlling Class, or to any suit instituted by any Bondholder for the enforcement of the payment of any installment of interest on any Bond on or after the Stated Maturity thereof expressed in such Bond or for the enforcement of the payment of any installment of principal of any Bond when due (or, in the case of any Bond called for redemption, on or after the applicable redemption date).

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SECTION 5.17. WAIVER OF STAY OR EXTENSION LAWS.

The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension of law wherever enacted, now or at any time hereafter in force, which may affect the covenants in, or the performance of, this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

SECTION 5.18. SALE OF TRUST ESTATE.

(a) The power to effect any sale (a “Sale”) of any portion of the Trust Estate pursuant to Section 5.04 shall not be exhausted by any one or more Sales as to any portion of the Trust Estate remaining unsold, but shall continue unimpaired until the entire Trust Estate shall have been sold or all amounts payable on the Bonds and under this Indenture with respect thereto shall have been paid. The Trustee may from time to time postpone any public Sale by public announcement made at the time and place of such Sale. The Trustee hereby expressly waives its right to any amount fixed by law as compensation for any Sale.

(b) To the extent permitted by law, the Trustee shall not in any private Sale sell or otherwise dispose of the Trust Estate, or any portion thereof, unless:

(1) the Holders of all Controlling Class consent to, or direct the Trustee to make, such Sale; or

(2) the proceeds of such Sale would be not less than the entire amount which would be distributable to the Holders of the Bonds, in full payment thereof in accordance with Section 5.08, on the Payment Date next succeeding the date of such Sale.

(3) [Reserved]

The purchase by the Trustee of all or any portion of the Trust Estate at a private Sale shall not be deemed a Sale or disposition thereof for purposes of this Section 5.18(b).

(c) Unless the Holders of all Controlling Class have otherwise consented or directed the Trustee, at any public Sale of all or any portion of the Trust Estate at which a minimum bid equal to or greater than the amount described in paragraph (2) of subsection (b) of this Section 5.18 has not been established by the Trustee and no Person bids an amount equal to or greater than such amount, the Trustee shall bid an amount at least $1.00 more than the highest other bid.

(d) In connection with a Sale of all or any portion of the Trust Estate:

(1) any Holder or Holders of Bonds may bid for and purchase the property offered for Sale, and upon compliance with the terms of sale may hold, retain and possess and dispose of such property, without further accountability, and may, in paying the purchase money therefor, deliver any Controlling Class or claims for interest thereon in lieu of cash up to the amount which shall, upon distribution of the net proceeds of such Sale, be payable thereon, and such Bonds, in case the amount so payable thereon shall be less than the amount due thereon, shall be returned to the Holders thereof after being appropriately stamped to show such partial payment;

(2) the Trustee may bid for and acquire the property offered for Sale in connection with any public Sale thereof, and, in lieu of paying cash therefor, may make settlement for the purchase price by crediting the gross Sale price against the sum of (A) the amount which would be distributable to the Holders of the Bonds as a result of such Sale in accordance with Section 5.08 on the Payment Date next succeeding the date of such Sale and (B) the expenses of the Sale and of any Proceedings in connection therewith which are reimbursable to it, without being required to produce the Bonds in order to complete any such Sale or in order for the net Sale price to be credited against such Bonds, and any property so acquired by the Trustee shall be held and dealt with by it in accordance with the provisions of this Indenture;

(3) the Trustee shall execute and deliver an appropriate instrument of conveyance transferring its interest in any portion of the Trust Estate in connection with a Sale thereof;

(4) the Trustee is hereby irrevocably appointed the agent and attorney-in-fact of the Issuer to transfer and convey its interest in any portion of the Trust Estate in connection with a Sale thereof, and to take all action necessary to effect such Sale; and

(5) no purchaser or transferee at such a Sale shall be bound to ascertain the Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys.

(e) Notwithstanding anything in this Indenture to the contrary, if an Event of Default specified in Section 5.01(1) is the Event of Default, or one of the Events of Default, on the basis of which the Bonds have been declared due and payable, then the Trustee may, in its sole discretion, sell the Trust Estate without compliance with this Section 5.18.

SECTION 5.19. ACTION ON BONDS.

The Trustee’s right to seek and recover judgment under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Trustee or the Holders of Bonds shall be impaired by the recovery of any judgment by the Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate.

ARTICLE VI

THE TRUSTEE

SECTION 6.01. DUTIES OF TRUSTEE.

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

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(b) Except during the continuance of an Event of Default:

(1) The Trustee need perform only those duties that are specifically set forth in this Indenture and no others and no implied covenants or obligations shall be read into this Indenture; and

(2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. The Trustee shall, however, examine such certificates and opinions to determine whether they conform to the requirements of this Indenture.

(c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(1) This paragraph does not limit the effect of subsection (b) of this Section;

(2) The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

(3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 5.14 or Section 5.18.

(d) Except with respect to duties of the Trustee prescribed by the TIA, as to which this Section 6.01(d) shall not apply, for all purposes under this Indenture, the Trustee shall not be deemed to have notice or knowledge of any Event of Default described in Section 5.01(2), 5.01(5) or 5.01(6) or any Default described in Section 5.01(3) or 5.01(4) or any Servicing Default or default under the Master Servicing Agreement unless a Responsible Officer assigned to and working in the Trustee’s corporate trust department has actual knowledge thereof or unless written notice of any event which is in fact such an Event of Default, Servicing Default or default is received by the Trustee at the Corporate Trust Office, and such notice references the Bonds generally, the Issuer, the Trust Estate or this Indenture.

(e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. In determining that such repayment or indemnity is not reasonably assured to it, the Trustee must consider not only the likelihood of repayment or indemnity by or on behalf of the Issuer but also the likelihood of repayment or indemnity from amounts payable to it from the Trust Estate pursuant to Sections 6.07 and 8.02(d); provided, however, that, except as provided in the first sentence of this Section 6.01(e), the Trustee shall not refuse or fail to perform any of its duties hereunder solely as a result of nonpayment of its reasonable fees and expenses; and provided further, however, that nothing in this Section 6.01(e) shall be construed to limit the exercise by the Trustee of any right or remedy permitted under this Indenture or otherwise in the event of the Issuer’s failure to pay the amounts due the Trustee pursuant to Section 6.07.

(f) Every provision of this Indenture that in any way relates to the Trustee is subject to the provisions of this Section.

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(g) Notwithstanding any extinguishment of all right, title and interest of the Issuer in and to the Trust Estate following an Event of Default and a consequent declaration of acceleration of the Maturity of the Bonds, whether such extinguishment occurs through a Sale of the Trust Estate to another Person, the acquisition of the Trust Estate by the Trustee or otherwise, the rights, powers and duties of the Trustee with respect to the Trust Estate (or the proceeds thereof) and the Bondholders and the rights of Bondholders shall continue to be governed by the terms of this Indenture.

SECTION 6.02. NOTICE OF DEFAULT.

Within 90 days after the occurrence of any Default known to the Trustee, the Trustee shall transmit by mail to all Holders of Bonds notice of each such Default, unless such Default shall have been cured or waived; provided, however, that except in the case of a Default of the type described in Section 5.01(1), the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interests of the Holders of the Bonds; and provided, further, that in the case of any Default of the character specified in Section 5.01(3) or 5.01(4) no such notice to Holders of the Bonds shall be given until at least 30 days after the occurrence thereof. Concurrently with the mailing of any such notice to the Holders of the Bonds, the Trustee shall transmit by mail a copy of such notice to the Rating Agencies.

SECTION 6.03. RIGHTS OF TRUSTEE.

Except as otherwise provided in Section 6.01 hereof:

(a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b) any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by an Issuer Request or Issuer Order, and any resolution of the board of directors may be sufficiently evidenced by a written resolution;

(c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers’ Certificate or the Officer’s Certificate of the Master Servicer;

(d) the Trustee may consult with counsel, and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Bondholders pursuant to this Indenture, unless such Bondholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

(f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note or other paper or document, but the Trustee, in its discretion may make such further inquiry or investigation into such facts or matters as it may see fit, and if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled, on reasonable prior notice to the Issuer, to examine the books, records and premises of the Issuer, personally or by agent or attorney, during the Issuer’s normal business hours; provided that the Trustee shall and shall cause its agents to hold in confidence all such information except to the extent disclosure may be required by law and except to the extent that the Trustee, in its sole judgment, may determine that such disclosure is consistent with its obligations hereunder;

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(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed and supervised with due care by it hereunder;

(h) the Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers;

(i) prior to the time that one of its Responsible Officers obtains actual knowledge of a Servicing Default as defined in the Master Servicing Agreement or a failure by the Master Servicer thereunder which with notice and the passage of time will become a Servicing Default, the Trustee shall not be responsible for taking action with respect thereto;

(j) the Trustee shall not be responsible for supervising, monitoring or reviewing the Master Servicer’s performance of its duties under the Master Servicing Agreement except to the extent of determining (i) that the periodic reports, certificates and opinions required to be delivered by the Master Servicer to it thereunder are delivered in timely fashion and conform to the requirements of the Master Servicing Agreement, (ii) that the amounts received by it from the Master Servicer for deposit in the Distribution Account during any month are as shown in the Master Servicer’s report for such month, (iii) and that any Trustee Mortgage File or document therein that has been released by the Trustee to the Master Servicer is returned as provided in the Master Servicing Agreement; and

(k) the provisions of this Section, other than clauses (e), (i) and (j), and of Sections 6.01(b) and (c) shall apply to the Trustee as it may be Successor Master Servicer under the Master Servicing Agreement.

SECTION 6.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF BONDS.

The recitals contained herein and in the Bonds, except the certificates of authentication on the Bonds, shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations with respect to the Trust Estate or as to the validity or sufficiency of this Indenture or of the Bonds. The Trustee shall not be accountable for the use or application by the Issuer of the Bonds or the proceeds thereof or any money paid to the Issuer or upon Issuer Order pursuant to the provisions hereof.

SECTION 6.05. MAY HOLD BONDS.

The Trustee, any Agent, or any other agent of the Issuer, in its individual or any other capacity, may become the owner or pledgee of Bonds and, subject to Sections 6.08 and 6.13, may otherwise deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not the Trustee, Agent or such other agent.

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SECTION 6.06. MONEY HELD IN TRUST.

Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by this Indenture or by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Issuer and except to the extent of income or other gain on investments which are obligations of the Trustee, in its commercial capacity, and income or other gain actually received by the Trustee on investments, which are obligations of others.

SECTION 6.07. COMPENSATION AND REIMBURSEMENT.

The Issuer agrees:

(1) subject to any separate written agreement with the Trustee, to pay the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in connection with the performance of its duties hereunder (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and

(3) to indemnify the Trustee and its agents for, and to hold them harmless against, any loss, liability or expense incurred without negligence or bad faith on their part, arising out of, or in connection with, the acceptance or administration of this trust, including the costs and expenses of defending themselves against any claim in connection with the exercise or performance of any of their powers or duties hereunder, provided that:

(i) with respect to any such claim, the Trustee shall have given the Issuer written notice thereof promptly after the Trustee shall have knowledge thereof;

(ii) while maintaining absolute control over its own defense, the Trustee shall cooperate and consult fully with the Issuer in preparing such defense; and

(iii) notwithstanding anything to the contrary in this Section 6.07(3), the Issuer shall not be liable for settlement of any such claim by the Trustee entered into without the prior consent of the Issuer.

As security for the performance of the obligations of the Issuer under this Section, the Trustee shall have a lien ranking junior to the lien of the Bonds with respect to which any claim of the Trustee under this Section arose (but senior to all other liens, if any) upon all property and funds held or collected as part of the Trust Estate by the Trustee in its capacity as such. The Trustee shall not institute any Proceeding seeking the enforcement of such lien against the Trust Estate unless such Proceeding is in connection with a Proceeding in accordance with Article V for enforcement of the lien of this Indenture after the occurrence of an Event of Default (other than an Event of Default arising solely from the Issuer’s failure to pay amounts due the Trustee under this Section 6.07) and a resulting declaration of acceleration of Maturity of the Bonds which has not been rescinded and annulled.

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SECTION 6.08. ELIGIBILITY; DISQUALIFICATION.

Irrespective of whether this Indenture is qualified under the TIA, this Indenture shall always have a Trustee who satisfies the requirements of TIA Sections 310(a)(1) and 310(a)(5). The Trustee shall always have a combined capital and surplus as stated in Section 6.09. The Trustee shall be subject to TIA Section 310(b).

SECTION 6.09. TRUSTEE’S CAPITAL AND SURPLUS.

The Trustee shall at all times have a combined capital and surplus of at least $50,000,000 or shall be a member of a bank holding company system, the aggregate combined capital and surplus of which is at least $50,000,000; provided, however, that the Trustee’s separate capital and surplus shall at all times be at least the amount required by TIA Section 310(a)(2) if this Indenture is qualified under the TIA. If the Trustee publishes annual reports of condition of the type described in TIA Section 310(a)(2), its combined capital and surplus for purposes of this Section 6.09 shall be as set forth in the latest such report.

SECTION 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

(a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 6.11.

(b) The Trustee may resign at any time by giving written notice thereof to the Issuer. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee.

(c) The Trustee may be removed at any time by Act of the Holders representing more than 50% of the aggregate Class Principal Amount of the Controlling Class, delivered to the Trustee and to the Issuer.

(d) If at any time:

(1) the Trustee shall have a conflicting interest prohibited by Section 6.08 and shall fail to resign or eliminate such conflicting interest in accordance with Section 6.08 after written request therefor by the Issuer or by any Bondholder; provided, however, that this Section 6.10(d)(1) shall not be operative as part of this Indenture unless and until this Indenture is qualified under the TIA, and until such qualification this Indenture shall be construed as if this Section 6.10(d)(1) were not contained herein; or

(2) the Trustee shall cease to be eligible under Section 6.09 or shall become incapable of acting 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, in any such case, (i) the Issuer by an Issuer Order may remove the Trustee or (ii) subject to Section 5.16, any Bondholder who has been a bona fide Holder of a Bond for at least six months may, on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee, unless this Indenture is qualified under the TIA and the Trustee’s duty to resign is stayed as provided in Section 310(b) of the TIA.

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(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of the Trustee for any cause, the Issuer, by an Issuer Order shall promptly appoint a successor Trustee. If within one year after such resignation, removal or incapability or the occurrence of such vacancy a successor Trustee shall be appointed by Act of the Holders of Bonds representing more than 50% of the aggregate Class Principal Amount of the Controlling Class delivered to the Issuer and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the successor Trustee appointed by the Issuer. If no successor Trustee shall have been so appointed by the Issuer or Bondholders and shall have accepted appointment in the manner hereinafter provided, any Bondholder who has been a bona fide Holder of a Bond for at least six months may, on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee.

(f) The Issuer shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to the Holders of Bonds. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.

SECTION 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Issuer and the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee. Notwithstanding the foregoing, on request of the Issuer or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder subject nevertheless to its lien, if any, provided for in Section 6.07. Upon request of any such successor Trustee, the Issuer shall execute and deliver any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.

No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.

SECTION 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS OF TRUSTEE.

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Bonds have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Bonds so authenticated with the same effect as if such successor Trustee had authenticated such Bonds.

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SECTION 6.13. PREFERENTIAL COLLECTION OF CLAIM AGAINST ISSUER.

If this Indenture is qualified under the TIA, the Trustee shall be subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b), and a Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated.

SECTION 6.14. CO-TRUSTEES AND SEPARATE TRUSTEES.

At any time or times, for the purpose of meeting the legal requirements of the TIA or of any jurisdiction in which any of the Trust Estate may at the time be located, the Issuer and the Trustee shall have power to appoint, and, upon the written request of the Trustee or of the Holders of Bonds representing more than 50% of the aggregate Class Principal Amount of the Controlling Class with respect to which a co-trustee or separate trustee is being appointed, the Issuer shall for such purpose join with the Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Trustee either to act as co-trustee, jointly with the Trustee, of all or any part of the Trust Estate, or to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section. If the Issuer does not join in such appointment within 15 days after the receipt by it of a request to do so, or in case an Event of Default has occurred and is continuing, the Trustee alone shall have power to make such appointment.

Should any written instrument from the Issuer be required by any co-trustee or separate trustee so appointed for more fully confirming to such co-trustee or separate trustee such property, title, right or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Issuer. Each notice shall include the name and address of any such co-trustee or successor trustee.

Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms:

(1) Bonds shall be authenticated and delivered and all rights, powers, duties and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder, shall be exercised solely by the Trustee.

(2) The rights, powers, duties and obligations hereby conferred or imposed upon the Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Trustee or by the Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such co-trustee or separate trustee.

(3) The Trustee at any time, by an instrument in writing executed by it, with the concurrence of the Issuer evidenced by an Issuer Order, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section, and, in case of an Event of Default has occurred and is continuing, the Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Issuer. Upon the written request of the Trustee, the Issuer shall join with the Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee or separate trustee which has resigned or has been removed may be appointed in the manner provided in this Section.

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(4) No co-trustee or separate trustee shall be required to satisfy the eligibility requirements under Sections 6.08 and 6.09. No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Trustee, or any other such trustee hereunder.

(5) Any Act of Bondholders delivered to the Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee.

SECTION 6.15. AUTHENTICATING AGENTS.

Upon the request of the Issuer, the Trustee shall appoint an Authenticating Agent with power to act on its behalf and subject to its direction in the authentication and delivery of the Bonds designated for such authentication by the Issuer and containing provisions therein for such authentication (or with respect to which the Issuer has made other arrangements, satisfactory to the Trustee and such Authenticating Agent, for notation on the Bonds of the authority of an Authenticating Agent appointed after the initial authentication and delivery of such Bonds) in connection with transfers and exchanges under Sections 2.06 and 2.07, if any, as fully to all intents and purposes as though the Authenticating Agent had been expressly authorized by those Sections to authenticate and deliver Bonds. For all purposes of this Indenture (other than in connection with the authentication and delivery of Bonds pursuant to Sections 2.05 and 2.12 in connection with their initial issuance and for purposes of Section 2.08), the authentication and delivery of Bonds by the Authenticating Agent pursuant to this Section shall be deemed to be the authentication and delivery of Bonds “by the Trustee”. Such Authenticating Agent shall at all times be a Person that both meets the requirements of Section 6.09 for the Trustee hereunder and has its principal office in the Borough of Manhattan, City and State of New York.

Any Authenticating Agent shall also serve as Bond Registrar or co-Bond Registrar, as provided in Section 2.07. Any Authenticating Agent appointed by the Trustee pursuant to the terms of this Section 6.15 or pursuant to the terms of any supplemental indenture shall deliver to the Trustee as a condition precedent to the effectiveness of such appointment an instrument accepting the trusts, duties and responsibilities of Authenticating Agent and of Bond Registrar or co-Bond Registrar and indemnifying the Trustee for and holding the Trustee harmless against, any loss, liability or expense (including reasonable attorneys’ fees) incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance, administration of the trust or exercise of authority by such Authenticating Agent, Bond Registrar or co-Bond Registrar.

Any corporation into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be a party, or any corporation succeeding to the corporate trust business of any Authenticating Agent, shall be the successor of the Authenticating Agent hereunder, if such successor corporation is otherwise eligible under this Section, without the execution or filing of any further act on the part of the parties hereto or the Authenticating Agent or such successor corporation.

Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and the Issuer. The Trustee may at any time terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and the Issuer. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any Authenticating Agent shall cease to be eligible under this Section, the Trustee shall promptly appoint a successor Authenticating Agent, shall give written notice of such appointment to the Issuer and shall mail notice of such appointment to all Holders of Bonds.

The Trustee agrees, subject to Section 6.01(e), to pay to any Authenticating Agent from time to time reasonable compensation for its services and the Trustee shall be entitled to be reimbursed for such payments, subject to Section 6.07. The provisions of Sections 2.10, 6.04 and 6.05 shall be applicable to any Authenticating Agent.

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SECTION 6.16. REVIEW OF MORTGAGE DOCUMENTS.

The Trustee agrees, for the benefit of the Holders of the Bonds, to review, within 90 days after the Closing Date, the Mortgage Documents delivered to it in connection with the Grant of the Original Pledged Mortgages as security for the Bonds. The Trustee’s review shall be limited to a determination that all documents referred to in the definition of the term Mortgage Documents have been delivered with respect to each such Pledged Mortgage (other than the documents related to any Pledged Mortgage so listed which has been subject to a Principal Prepayment in Full and the proceeds of which have been delivered to the Trustee in lieu of the applicable Mortgage Documents), that all such documents have been executed, and that all such documents relate to the Original Pledged Mortgages, provided that the Trustee shall not be responsible for determining whether any assignment is in recordable form or for verifying the information with respect to said loans contained on the Pledged Mortgage Schedule. In performing such review the Trustee may rely upon the purported genuineness and due execution of any such document and on the purported genuineness of any signature thereon. If the Trustee discovers any defect or omission in the Mortgage Documents or that any document required to be delivered to it has not been delivered or that any document so delivered does not relate to any of the Original Pledged Mortgages, it shall promptly notify the Issuer and the Master Servicer of such Pledged Mortgage in accordance with the provisions of the Master Servicing Agreement.

SECTION 6.17. PAYMENT OF CERTAIN INSURANCE PREMIUMS.

Notwithstanding anything to the contrary contained in this Indenture, the Trustee agrees, for the benefit of the Holders of the Bonds, that, should it fail to receive notice from the Master Servicer or the applicable Insurer, within the time period required pursuant to the Master Servicing Agreement, to the effect that any premiums due with respect to any Insurance Policies the premiums for which are required to be paid by the Servicer or the Master Servicer from amounts on deposit in the related Escrow Account, or required to be advanced by the Master Servicer or the related Servicer, have been paid in full at the times set forth in the Master Servicing Agreement, the Trustee shall proceed with diligence to make inquiries of the Master Servicer, the Issuer and the applicable Insurers as to whether such premiums have been paid at the times set forth in the Master Servicing Agreement. In the event such premiums have not been paid and the coverage provided under the related Insurance Policy may be interrupted or adversely affected, the Trustee agrees promptly to pay such premiums from amounts on deposit in the Distribution Account, pursuant to Section 8.02(d) and in accordance with its obligations under the applicable provisions of the Master Servicing Agreement.

SECTION 6.18. SUBSTITUTION OF INSURANCE POLICIES, ETC.; NOTIFICATION OF RATING AGENCIES.

(a) Provided that the conditions set forth in paragraph (b) hereof have been satisfied, the Issuer may substitute a replacement policy or instrument for any Bond Insurance Policy.

(b) The Issuer shall notify each Rating Agency rating the Bonds in the event that any replacement policy or instrument is obtained for any Bond Insurance Policy and Insurer or other Person other than the Person who issued such policy or instrument; provided, however, that the Trustee shall not be required to accept any such replacement policy or instrument unless the Trustee has received from each Rating Agency rating the Bonds a written instrument to the effect that such acceptance by the Trustee will not result in the lowering of the then applicable rating of any Bonds issued pursuant to this Indenture by such Rating Agency.

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ARTICLE VII

BONDHOLDERS’ LISTS AND REPORTS

SECTION 7.01. ISSUER TO FURNISH TRUSTEE NAMES AND ADDRESSES OF BONDHOLDERS.

(a) The Issuer shall furnish or cause to be furnished to the Trustee (i) semi-annually, not less than 45 days nor more than 60 days after the Interest Payment Date occurring closest to six months after the Closing Date and each Interest Payment Date occurring at six-month intervals thereafter, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Bonds and (ii) at such other times, as the Trustee may request in writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than 10 days prior to the time such list is furnished; provided, however, that so long as the Trustee is the Bond Registrar, no such list shall be required to be furnished.

(b) In addition to furnishing to the Trustee the Bondholder lists, if any, required under subsection (a), the Issuer shall also furnish all Bondholder lists, if any, required under Section 3.03 at the times required by Section 3.03.

SECTION 7.02. RESERVATION OF INFORMATION; COMMUNICATIONS TO BONDHOLDERS.

(a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders of Bonds contained in the most recent list, if any, furnished to the Trustee as provided in Section 7.01 and the names and addresses of the Holders of Bonds received by the Trustee in its capacity as Bond Registrar. The Trustee may destroy any list furnished to it as provided in Section 7.01 upon receipt of a new list so furnished.

(b) If this Indenture is qualified under the TIA, Bondholders may communicate pursuant to TIA Section 312(b) with other Bondholders with respect to their rights under this Indenture or under the Bonds.

(c) If this Indenture is qualified under the TIA, the Issuer, the Trustee and the Bond Registrar shall have the protection of TIA Section 312(c).

SECTION 7.03. REPORTS BY TRUSTEE.

(a) If this Indenture is qualified under the TIA, then within 30 days after May 15 of each year (the “reporting date”), commencing with the year after the issuance of the Bonds, (i) in the circumstance required by TIA Section 313(a), the Trustee shall mail to all Holders a brief report dated as of such reporting date that complies with TIA Section 313(a), (ii) the Trustee shall also mail to Holders of Bonds with respect to which it has made advances any reports with respect to such advances that are required by TIA Section 313(b)(2) and (iii) the Trustee shall also mail to Holders of Bonds any reports required by TIA Section 313(b)(1). For purposes of the information required to be included in any such reports pursuant to TIA Sections 313(a)(3), 313(b)(1) (if applicable) or 313(b)(2), the principal amount of indenture securities outstanding on the date as of which such information is provided shall be the aggregate Class Principal Amount of the then Controlling Class covered by the report. The Trustee shall comply with TIA Section 313(c) with respect to any reports required by this Section 7.03(a).

(b) If this Indenture is qualified under the TIA, a copy of each report required under this Section 7.03 shall, at the time of such transmission to Holders of Bonds be filed by the Trustee with the Commission and with each securities exchange upon which the Bonds are listed. The Issuer will notify the Trustee when the Bonds are listed on any securities exchange.

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SECTION 7.04. REPORTS BY ISSUER.

If this Indenture is qualified under the TIA, the Issuer (a) shall file with the Trustee, within 15 days after it files them with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may by rules and regulations prescribe) which the Issuer is required to file with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 and (b) shall also comply with the other provisions of TIA Section 314(a).

SECTION 7.05. NOTICE TO THE RATING AGENCIES [AND TO BOND INSURER.]

The Issuer shall use its best efforts promptly to provide notice to the Rating Agencies [and the Bond Insurer] of any of the following events of which it has actual knowledge:

(a) any material change to or amendment of this Indenture;

(b) the occurrence of any Default or Event of Default that has not been cured;

(c) the resignation or termination of the Trustee;

(d) the substitution of Pledged Mortgages;

(e) the proposed issuance of Additional Bonds;

(f) the final payment of Bondholders; and

[(g) any payment or claim made under the Bond Insurance Policy.]

SECTION 7.06. RULE 17G-5 COMPLIANCE.

(a) The Rule 17g-5 Information Provider shall, upon receipt of an NRSRO certification, make available on its Rule 17g-5 Website solely to the Depositor, each Rating Agency and to any NRSRO the following items, but only to the extent such items are delivered to it by electronic mail to rmbs17g5informationprovider@wellsfargo.com, specifically with a subject reference of “SEMT 201_-_” and an identification of the type of information being provided in the body of such notice, or any other delivery method established or approved by the Rule 17g-5 Information Provider if or as may be necessary or beneficial, :

(i) any Rating Agency Information provided to the Rule 17g-5 Information Provider in accordance with Sections 6.06, 6.07, 6.14, 9.01, 9.02, 11.03 and 11.12 of the Pooling and Servicing Agreement, as well as reports prepared in accordance with Sections 6.21, 6.22, 6.23 and 6.24 of the Pooling and Servicing Agreement (provided that the Rule 17g-5 Information Provider shall not be required to post to its Rule 17g-5 Website any such information previously posted to and available on the Securities Administrator’s website);

(ii) any notice of any amendment that modifies the procedures herein relating to Exchange Act Rule 17g-5 pursuant to this Agreement; and

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(iii) a summary of any oral conversation with a Rating Agency regarding any Mortgage Loan, any Mortgaged Property or any REO Property, to the extent required to be provided pursuant to Rule 17g-5.

The foregoing information shall be made available by the Rule 17g-5 Information Provider on its Rule 17g-5 Website. Such information shall be posted to the Rule 17g-5 Website on the same Business Day as it is received, provided that such information is received by 12:00 p.m. (eastern time) or, if received after 12:00 p.m., on the next Business Day. The Rule 17g-5 Information Provider shall have no obligation or duty to verify, confirm or otherwise determine whether the information being delivered is accurate, complete, conforms to the requirements of this Agreement, or otherwise is or is not anything other than what it purports to be. The Rule 17g-5 Information Provider shall not be deemed to have obtained actual knowledge of any information by virtue of the receipt and posting of such information to the Rule 17g-5 Website. Further, notwithstanding anything to the contrary herein, in the event the Depositor determines that any information previously posted to the Rule 17g-5 Website should not have been posted thereto pursuant to the terms of this Agreement, the Depositor shall direct the Rule 17g-5 Information Provider in writing to remove such information from the Rule 17g-5 Website, such written notice to specify the information to be so removed. The Rule 17g-5 Information Provider (i) shall have no obligation or duty to verify, confirm or otherwise determine the accuracy of the information contained in such written direction, (ii) shall be entitled to rely fully upon such written direction and (iii) shall not be held liable in connection with removing any such information from the Rule 17g-5 Website upon the receipt of such written direction.

The Rule 17g-5 Information Provider shall provide a mechanism to notify any party that has submitted an NRSRO Certification each time the Rule 17g-5 Information Provider posts an additional document to the Rule 17g-5 Website.

In connection with providing access to the Rule 17g-5 Website, the Rule 17g-5 Information Provider may require registration and the acceptance of a disclaimer. The Rule 17g-5 Information Provider shall not be liable for the dissemination of information in accordance with the terms of this Agreement, makes no representations or warranties as to the accuracy or completeness of such information being made available, has no obligation to review such information, and assumes no responsibility for such information. The Rule 17g-5 Information Provider shall not be liable for its failure to make any information available to each Rating Agency or NRSROs unless such information was delivered to the Rule 17g-5 Information Provider at the email address specified in writing to the Depositor, with a subject heading of “SEMT 201_-_” and sufficient detail to indicate that such information is required to be posted on the Rule 17g-5 Website.

If any NRSRO that has previously submitted an NRSRO Certification and whose NRSRO Certification has been accepted, notifies the Rule 17g-5 Information Provider that it is unable to access information posted to the Rule 17g-5 Website and such access issue is determined to be the result of a problem with the Rule 17g-5 Website, if such access issue is not resolved within one Business Day of such determination, the Rule 17g-5 Information Provider shall so notify the Depositor.

(b) Each of the Master Servicer and the Trustee hereby agrees that, except as otherwise expressly permitted herein, it shall not communicate with (including verbally) or provide information to a Rating Agency without the prior consent of and consultation with the Depositor, and that any permitted communication by it to a Rating Agency will be made by it only in the manner prescribed by the procedures established by the Depositor to ensure compliance with Rule 17g-5 under the Exchange Act, including to the extent set forth herein, providing any such communications to the Depositor for posting on the Rule 17g-5 Website pursuant to this Section 7.06 prior to communicating with such Rating Agency.

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SECTION 7.07. RULE 15GA-1 COMPLIANCE.

(a) To the extent a Responsible Officer of the Master Servicer receives a demand for the repurchase or substitution of a Mortgage Loan based on a breach of a representation or warranty made by the Seller or the Originator of such Mortgage Loan (each, a “Demand”), the Master Servicer agrees (i) if such Demand is in writing, promptly to forward such Demand to the Trustee, and (ii) if such Demand is oral, to instruct the requesting party to submit such Demand in writing to the Trustee. To the extent a Responsible Officer of the Trustee receives a Demand, it shall provide the Depositor with prompt written notice of such Demand.

(b) In connection with the repurchase or substitution of a Mortgage Loan pursuant to a Demand, any dispute with respect to a Demand, or the withdrawal or final rejection of a Demand (i) the Master Servicer agrees, to the extent a Responsible Officer of the Master Servicer has actual knowledge thereof, promptly to notify the Trustee in writing, and (ii) the Trustee agrees, to the extent a Responsible Officer of the Trustee has actual knowledge thereof, promptly to notify the Depositor in writing.

(c) To the extent in its possession, the Trustee shall provide the Depositor with any applicable information required under Rule 15Ga-1 of the Exchange Act (the “Rule 15Ga-1 Information”) in a timely manner so as to enable the Depositor to meet its reporting obligations under Rule 15Ga-1. The Depositor shall be entitled conclusively to rely on the Rule 15Ga-1 Information provided to it by the Trustee in connection with the compilation by the Depositor of the Rule 15Ga-1 Information required to be reported on Form 10-D. For the avoidance of doubt, the Depositor shall have sole responsibility for compiling the Rule 15Ga-1 Information required to be reported on Form 10-D, and the Securities Administrator shall be entitled conclusively to rely on any Rule 15Ga-1 Information provided to it by the Depositor for inclusion on each Form 10-D.

ARTICLE VIII

ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES

SECTION 8.01. COLLECTION OF MONEYS.

Except as otherwise expressly provided herein, the Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Trustee pursuant to this Indenture. The Trustee shall hold all such money and property received by it as part of the Trust Estate and shall apply it as provided in this Indenture. Except as otherwise expressly provided herein, if any default occurred in the making of any payment or performance under any agreement or instrument that is part of the Trust Estate, the Trustee may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice to any right to claim a Default or Event of Default hereunder and any right to proceed thereafter as provided in Article V.

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SECTION 8.02. DISTRIBUTION ACCOUNT.

(a) On or prior to the Closing Date, the Issuer shall cause the Master Servicer to establish and maintain, in the name of the Trustee, for the benefit of the Bondholders and the Holder of the Investor Certificate, the Pledged Accounts as provided in Section 3(h) of the Master Servicing Agreement.

(b) Except as otherwise provided in the Master Servicing Agreement, within one Business Day of receipt thereof by the Master Servicer, the Master Servicer will deposit in the Bond Account all amounts required to be deposited therein pursuant to Section 3(h) of the Master Servicing Agreement.

(c) The Trustee shall establish and maintain, on behalf of the Bondholders, the Distribution Account. The Trustee shall, promptly upon receipt, deposit in the Distribution Account and retain therein the following:

(i) the aggregate amount remitted by the Master Servicer to the Trustee pursuant to Section 3(h)(vii) of the Master Servicing Agreement; and

(ii) any other amounts deposited hereunder which are required to be deposited in the Distribution Account.

In the event that the Master Servicer shall remit any amount not required to be remitted, it may at any time direct the Trustee to withdraw such amount from the Distribution Account, any provision herein to the contrary notwithstanding. Such direction may be accomplished by delivering an Officer’s Certificate to the Trustee which describes the amounts deposited in error in the Distribution Account. All funds deposited in the Distribution Account shall be held by the Trustee in trust for the Bondholders until disbursed in accordance with this Indenture or withdrawn in accordance with Section 2.03(b). In no event shall the Trustee incur liability for withdrawals from the Distribution Account at the direction of the Master Servicer.

(d) Subject to Sections 5.02 and 5.08, on each Payment Date and Redemption Date, the Trustee shall distribute all amounts on deposit in the Distribution Account to Bondholders in respect of the Bonds to the extent of amounts due and unpaid on the Bonds for principal and interest in the amounts and in the order of priority set forth in Section 2.03(b).

SECTION 8.03. GENERAL PROVISIONS REGARDING PLEDGED ACCOUNTS.

(a) Each Pledged Account shall relate solely to the Bonds, the Investor Certificate and to the Pledged Mortgages, Permitted Investments and other property securing the Bonds. Funds and other property in each Pledged Account shall not be commingled with any other moneys or property of the Issuer or any Affiliate thereof. Notwithstanding the foregoing, the Trustee may hold any funds or other property received or held by it as part of a Pledged Account, other than the Distribution Account, in collective accounts maintained by it in the normal course of its business and containing funds or property held by it for other Persons (which may include the Issuer or an Affiliate), provided that such accounts are under the sole control of the Trustee and the Trustee maintains adequate records indicating the ownership of all such funds or property and the portions thereof held for credit to each Pledged Account.

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(b) So long as no Default or Event of Default shall have occurred and be continuing, all or a portion of the funds in the Pledged Accounts shall be invested in Permitted Investments and reinvested by the Trustee upon written direction of the Master Servicer, subject to the provisions of Section 3(h) of the Master Servicing Agreement. Any such Permitted Investment shall mature not later than the applicable date specified in Section 3(h)(ix) of the Master Servicing Agreement. All income and gain (net of any losses) realized from any such investment of funds on deposit in the Pledged Accounts shall be for the benefit of the Master Servicer as servicing compensation and shall be remitted to it monthly as provided in the Master Servicing Agreement. The amount of any realized losses in the Pledged Accounts incurred in respect of any such investments shall promptly be deposited by the Master Servicer in the applicable Pledged Account or Pledged Accounts. The Master Servicer will not direct the Trustee to make any investment of any funds or to sell any investment held in any of the Pledged Accounts unless the security interest Granted and perfected in such account will continue to be perfected in such investment or the proceeds of such sale, in either case without any further action by any Person, and, in connection with any direction to the Trustee to make any such investment or sale, if requested by the Trustee, the Master Servicer shall deliver to the Trustee an Opinion of Counsel, acceptable to the Trustee, to such effect.

(c) Subject to Section 6.01(c), the Trustee shall not in any way be held liable by reason of any insufficiency in any of the Pledged Accounts resulting from any loss on any Permitted Investment included therein except for losses attributable to the Trustee’s failure to make payments on such Permitted Investments issued by the Trustee, in its commercial capacity as principal obligor and not as trustee, in accordance with their terms.

(d) If (i) the Master Servicer shall have failed to give investment directions for any funds on deposit in the Pledged Accounts to the Trustee by 11:00 a.m. Eastern Time (or such other time as may be agreed by the Master Servicer and Trustee) on any Business Day or (ii) a Default or Event of Default shall have occurred and be continuing with respect to the Bonds but the Bonds shall not have been declared due and payable pursuant to Section 5.02 or (iii) if such Bonds shall have been declared due and payable following an Event of Default, amounts collected or receivable from the Trust Estate are being applied in accordance with Section 5.05 as if there had not been such a declaration, then the Trustee shall, to the fullest extent practicable, invest and reinvest funds in the Pledged Accounts in one or more Permitted Investments.

(e) The Trustee shall, at all times while any Bonds are outstanding, maintain in its possession, or in the possession of an agent whose actions with respect to such items are under the sole control of the Trustee, all certificates or other instruments, if any, evidencing any investment of funds in a Pledged Account. The Trustee shall relinquish possession of such items, or direct its agent to do so, only for purposes of collecting the final payment receivable on such investment or certificate or, in connection with the sale of any investment held in a Pledged Account, against delivery of the amount receivable in connection with any sale.

SECTION 8.04. PURCHASES OF DEFECTIVE PLEDGED MORTGAGES.

(a) If at any time the Issuer or the Trustee discovers or is notified by the Master Servicer (i) that there has been a breach of any of the Master Servicer’s representations and warranties with respect to Pledged Mortgages contained in the Master Servicing Agreement that materially and adversely affects the interests of the Bondholders in any Pledged Mortgage, (ii) that any of the Mortgage Documents for a Pledged Mortgage has not been properly executed by the Mortgagor or contains a material defect or (iii) that any Mortgage Documents for a Pledged Mortgage shall not have been received by the Trustee within the applicable time periods and in the forms set forth in Section 3.11 or Section 6.16, as the case may be, and the Master Servicing Agreement, then the party discovering such defect or omission or receiving notice thereof shall promptly notify the other party and the Master Servicer (other than in cases where the Master Servicer has given notice thereof).

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(b) If any defect, misrepresentation or omission described in subsection (a) of this Section 8.04 materially and adversely affects the interests of the Bondholders, then the Issuer shall, pursuant to the applicable provisions of the Master Servicing Agreement, cause the Master Servicer to either (i) cure any such defect, misrepresentation or omission, (ii) remove such Pledged Mortgage and substitute in its place a Replacement Pledged Mortgage or (iii) purchase he affected Pledged Mortgage, in each case at the times and in the manner set forth in the Master Servicing Agreement.

(c) Upon any such purchase or substitution, the Issuer shall be entitled to request a release of the defective Pledged Mortgage from the lien of this Indenture pursuant to Section 8.08(c) and Section 8.12.

(d) If the Master Servicer shall either (i) purchase any Pledged Mortgage it is required to purchase pursuant to the Master Servicing Agreement and deposit the Purchase Price therefor in the Bond Account or (ii) (a) remove such Pledged Mortgage from the Trust Estate and substitute in its place a Replacement Pledged Mortgage and (b) deposit in the Bond Account any related Substitution Adjustment Amount, in each case in the manner set forth in the Master Servicing Agreement, then the Master Servicer shall be deemed to have complied with all requirements imposed upon it by this Section 8.04 with respect to such Pledged Mortgage.

(e) The Master Servicer shall, in its sole discretion, have the right to purchase for its own account from the Trust Estate any Pledged Mortgage which is 91 days or more delinquent at a price and in the manner specified in Section 3(n) of the Master Servicing Agreement. Upon purchase of such Pledged Mortgage by the Master Servicer, the Master Servicer shall have the right to treat such Pledged Mortgage (a “Defaulted Pledged Mortgage”) as having been the subject of a Principal Prepayment in Full and request the release thereof from the lien of this Indenture pursuant to Section 8.12.

SECTION 8.05. GRANT OF REPLACEMENT PLEDGED MORTGAGE.

The Master Servicer shall be permitted to substitute any Pledged Mortgage for any Original Pledged Mortgage initially Granted to the Trustee on the Closing Date pursuant to this Indenture as set forth in Sections 2(a)(ii) and 2(d)(iv) of the Master Servicing Agreement.

SECTION 8.06. REPORTS BY TRUSTEE TO BONDHOLDERS.

On each Payment Date or Optional Redemption Date the Trustee shall deliver a written report to each Holder of Bonds, setting forth the following (a “Payment Date Statement”):

(a) On or before [noon California time] on the Determination Date, the Master Servicer shall provide by modem to the Trustee with respect to the Pledged Mortgages, an electronic data file (accompanied by a hardcopy report) in a format which is mutually agreed upon by the Master Servicer and the Trustee. The Trustee shall be under no duty to recalculate, verify or recompute the information provided to it by the Master Servicer under this Section 8.06(a). Not later than each Payment Date, the Trustee shall prepare and cause to be forwarded by first class mail to each Bondholder, the Master Servicer and the Issuer a statement (each, a “Payment Date Statement”) setting forth with respect to the related distribution:

(i) the amount thereof allocable to principal, separately identifying the aggregate amount of any Principal Prepayments and Liquidation Proceeds included therein;

(ii) the amount thereof allocable to interest, and (x) any of (a) the amount by which the aggregate Senior Interest Shortfalls on prior Payment Dates exceeds the amount paid on the Senior Bonds on prior Payment Dates pursuant to clause (ii) of the definition of Senior Interest Payment Date, (b) the amount by which the aggregate Class [B-1] Interest Shortfalls on prior Payment Dates exceeds the amount paid on the Class [B-1] Bonds on prior Payment Dates pursuant to clause (iii) of the definition of Class [B-1] Interest Payment Amount and (c) the amount by which the aggregate Class [B-2] Interest Shortfalls on prior Payment Dates exceeds the amount paid on the Class [B-2] Bonds on prior Payment Dates pursuant to clause (iii) of the definition of Class [B-2] Interest Payment Amount included in such distribution and (y) any of the amounts in clauses (a), (b) or (c) above remaining after giving effect to such distribution.

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(iii) if the distribution to the Holders of such Class of Bonds is less than the full amount that would be distributable to such Holders pursuant to Section 2.03(b) on such Payment Date if there were sufficient funds available therefor, the amount of the shortfall and the allocation thereof as between principal and interest and specifying, in the case of the Subordinated Bonds, the Class [B-2] Principal Carryover Shortfall and/or Class [B-1] Principal Carryover Shortfall;

(iv) the Class Principal Amount of each Class of Bonds and the Invested Amount after giving effect to the distribution of principal on such Payment Date;

(v) the Pool Stated Principal Balance for the following Payment Date;

(vi) the Senior Percentage, the Class [B-1] Percentage, the Class [B-2] Percentage and the Investor Percentage for the following Payment Date;

(vii) the amount of the Master Servicing Fees and Servicing Fees paid to or retained by the Master Servicer and the Servicers (with respect to the Servicers, in the aggregate) with respect to such Payment Date;

(viii) the Bond Interest Rate for each such Class of Bonds and the Certificate Interest Rate with respect to such Payment Date;

(ix) the amount of Advances included in the distribution on such Payment Date and the aggregate amount of Advances outstanding as of the close of business on such Payment Date;

(x) the number and aggregate principal amounts of Pledged Mortgages (A) delinquent (exclusive of Pledged Mortgages in foreclosure) (1) 1 to 29 days (2) 30 to 59 days (3) 60 to 89 days and (4) 90 or more days and (B) in foreclosure and delinquent (1) 1 to 29 days (2) 30 to 59 days (3) 60 to 89 days and (4) 90 or more days, as of the close of business on the last day of the calendar month preceding such Payment Date;

(xi) for each of the preceding 12 calendar months, or all calendar months since the Cut-off Date, whichever is less, the aggregate dollar amount of the Scheduled Payments (A) due on all Outstanding Pledged Mortgages on each of the Due Dates in each such month and (B) delinquent 60 days or more on each of the Due Dates in each such month;

(xii) with respect to any Pledged Mortgage that became an REO Property during the preceding calendar month, the loan number and Stated Principal Balance of such Pledged Mortgage as of the close of business on the Determination Date preceding such Payment Date and the date of acquisition thereof;

(xiii) the total number and principal balance of any REO Properties (and market value, if available) as of the close of business on the Determination Date preceding such Payment Date;

(xiv) the Senior Percentage, the Class [B-1] Percentage, the Class [B-2] Percentage and the Investor Prepayment Percentage for the following Payment Date;

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(xv) the aggregate amount of Realized Losses incurred during the preceding calendar month and aggregate Realized Losses through such Payment Date;

(xvi) the amount payable to the holder of the Investor Certificate pursuant to Section 5.01 of the Deposit Trust Agreement; and

[(xvii) any amount payable under the Bond Insurance Policy.]

(b) The Trustee’s responsibility for disbursing the above information to the Bondholders is limited to the availability, timeliness and accuracy of the information derived from the Master Servicer. The Trustee will send a copy of each statement provided pursuant to this Section 8.06 to each Rating Agency.

(c) Within a reasonable period of time after the end of each calendar year, the Trustee shall cause to be furnished to each Person who at any time during the calendar year was a Bondholder, a statement containing the information set forth in clauses (a)(i), (a)(ii) and (a)(vii) of this Section 8.06 aggregated for such calendar year or applicable portion thereof during which such Person was a Bondholder. Such obligation of the Trustee shall be deemed to have been satisfied to the extent that substantially comparable information shall be provided by the Trustee pursuant to any requirements of the Code as from time to time in effect.

SECTION 8.07. PREPARATION AND FILING OF REPORTS with the SEC

(a) Reports Filed on Form 10-D.

(i) Within 15 days after each Payment Date (subject to permitted extensions under the Exchange Act), the Trustee shall prepare and file on behalf of the Trust any Form 10-D required by the Exchange Act, in form and substance as required by the Exchange Act. The Trustee shall file each Form 10-D with a copy of the related Payment Date Statement attached thereto. Any disclosure in addition to the Payment Date Statement that is required to be included on Form 10-D (“Additional Form 10-D Disclosure”) shall be determined and prepared by and at the direction of the Manager pursuant to the following paragraph and the Trustee will have no duty or liability for any failure hereunder to determine or prepare any Additional Form 10-D Disclosure, except as set forth in the next paragraph.

(ii) As set forth on Exhibit VIII hereto, within 5 calendar days after the related Payment Date, (i) the parties to the Sequoia Mortgage Trust 201_-_ transaction shall be required to provide to the Trustee, to the extent known by a responsible officer thereof, in EDGAR-compatible form, or in such other form as otherwise agreed upon by the Trustee and such party, the form and substance of any Additional Form 10-D Disclosure, if applicable, together with any Additional Disclosure Notification (an “Additional Disclosure Notification”), (ii) the Trustee shall forward to the Manager, the form and substance of the Additional Form 10-D Disclosure, and (iii) the Manager will approve, as to form and substance, or disapprove, as the case may be, the inclusion of the Additional Form 10-D Disclosure on Form 10-D. The Seller will be responsible for any reasonable fees and expenses assessed or incurred by the Trustee in connection with including any Additional Form 10-D Disclosure in Form 10-D pursuant to this paragraph.

(iii) After preparing the Form 10-D, the Trustee shall forward electronically a draft copy of the Form 10-D to the Manager and the Master Servicer for review. No later than the Business Day prior to the date specified in the next sentence, the Manager and the Master Servicer shall notify the Trustee of any changes to or approval of such Form 10-D. No later than 2 Business Days prior to the 15^th calendar day after the related Payment Date, a senior officer of the Master Servicer in charge of the master servicing function shall sign the Form 10-D and return an electronic or fax copy of such signed Form 10-D (with an original executed hard copy to follow by overnight mail) to the Trustee. If a Form 10-D cannot be filed on time or if a previously filed Form 10-D needs to be amended, the Trustee will follow the procedures set forth in subsection (d)(ii) of this Section 8.07. Promptly (but no later than 1 Business Day) after filing with the Commission, the Trustee will make available on its internet website a final executed copy of each Form 10-D. Each party to this Agreement acknowledges that the performance by the Master Servicer and the Trustee of its duties under this Section 8.07(a) related to the timely preparation, execution and filing of Form 10-D is contingent upon such parties strictly observing all applicable deadlines in the performance of their duties under this Section 8.07(a). Neither the Master Servicer nor the Trustee shall have any liability for any loss, expense, damage, claim arising out of or with respect to any failure to properly prepare, execute and/or timely file such Form 10-D, where such failure results from the Trustee’s inability or failure to obtain or receive, on a timely basis, any information from any other party hereto needed to prepare, arrange for execution or file such Form 10-D, not resulting from its own negligence, bad faith or willful misconduct.

(b) Reports Filed on Form 10-K.

(i) Within 90 days after the end of each fiscal year of the Trust or such earlier date as may be required by the Exchange Act (the “10-K Filing Deadline”) (it being understood that the fiscal year for the Trust ends on December 31^st of each year), commencing in March 201_, the Trustee shall prepare and file on behalf of the Trust a Form 10-K, in form and substance as required by the Exchange Act. Each such Form 10-K shall include the following items, in each case to the extent they have been delivered to the Trustee within the applicable time frames set forth in this Agreement and the related Master Servicing Agreement, (i) an annual compliance statement for each Servicer, each Additional Servicer, the Master Servicer, The Trustee and any Servicing Function Participant engaged by such parties (each, a “Reporting Servicer”) as described under Section 8.08 of this Agreement and Section 3(p) of the Master Servicing Agreement, (ii)(A) the annual reports on assessment of compliance with servicing criteria for each Reporting Servicer, as described under Sections 8.09 of this Agreement and 3(q) of the Master Servicing Agreement, and (B) if each Reporting Servicer’s report on assessment of compliance with servicing criteria described under Section 8.09 of this Agreement and Section 3(q) of the Master Servicing Agreement identifies any material instance of noncompliance, disclosure identifying such instance of noncompliance, or if each Reporting Servicer’s report on assessment of compliance with servicing criteria described under Section 8.09 of this Agreement or Section 3(q) of the Master Servicing Agreement is not included as an exhibit to such Form 10-K, disclosure that such report is not included and an explanation why such report is not included, (iii)(A) the registered public accounting firm attestation report for each Reporting Servicer, as described under Section 8.09 of this Agreement or Section 3(q) of the Master Servicing Agreement, and (B) if any registered public accounting firm attestation report described under Section 8.09 of this Agreement or Section 3(q) of the Master Servicing Agreement identifies any material instance of noncompliance, disclosure identifying such instance of noncompliance, or if any such registered public accounting firm attestation report is not included as an exhibit to such Form 10-K, disclosure that such report is not included and an explanation why such report is not included, and (iv) a Sarbanes-Oxley Certification as described in Section 8.07(e) of this Agreement. Any disclosure or information in addition to (i) through (iv) above that is required to be included on Form 10-K (“Additional Form 10-K Disclosure”) shall be determined and prepared by and at the direction of the Manager pursuant to the following paragraph and the Trustee will have no duty or liability for any failure hereunder to determine or prepare any Additional Form 10-K Disclosure, except as set forth in the next paragraph.

(ii) As set forth on Exhibit IX hereto, no later than March 10 (with a 5 calendar day cure period) of each year that the Trust is subject to the Exchange Act reporting requirements, commencing in 201_, (i) the parties to the Sequoia Mortgage Trust 201_-_ transaction shall be required to provide to the Trustee, to the extent known by a responsible officer thereof, in EDGAR-compatible form, or in such other form as otherwise agreed upon by the Trustee and such party, the form and substance of any Additional Form 10-K Disclosure, if applicable, together with an Additional Disclosure Notification, (ii) the Trustee shall forward to the Manager, the form and substance of the Additional Form 10-K Disclosure, and (iii) the Manager will approve, as to form and substance, or disapprove, as the case may be, the inclusion of the Additional Form 10-K Disclosure on Form 10-K. The Seller will be responsible for any reasonable fees and expenses assessed or incurred by the Trustee in connection with including any Additional Form 10-K Disclosure in Form 10-K pursuant to this paragraph.

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(iii) After preparing the Form 10-K, the Trustee shall forward electronically a draft copy of the Form 10-K to the Master Servicer and the Manager for review. No later than the Business Day prior to the date specified in the next sentence, the Manager and the Master Servicer shall notify the Trustee of any changes to or approval of such Form 10-K. No later than 1 p.m. New York City time on the 4th Business Day prior to the 10-K Filing Deadline, the Manager shall cause the senior officer of the Depositor in charge of securitization to sign the Form 10-K and return an electronic or fax copy of such signed Form 10-K (with an original executed hard copy to follow by overnight mail) to the Trustee. If a Form 10-K cannot be filed on time or if a previously filed Form 10-K needs to be amended, the Trustee will follow the procedures set forth in subsection (d) of this Section. Promptly (but no later than 1 Business Day) after filing with the Commission, the Trustee will make available on its internet website a final executed copy of each Form 10-K. The parties to this Agreement acknowledge that the performance by the Master Servicer and the Trustee of its duties under this Section 8.07(b) related to the timely preparation and filing of Form 10-K is contingent upon such parties (and any Additional Servicer or Servicing Function Participant) strictly observing all applicable deadlines in the performance of their duties under these Sections 8.07, 8.08 and 8.09 of this Agreement and 3(p) and (q) of the Master Servicing Agreement. Neither the Master Servicer nor the Trustee shall have any liability for any loss, expense, damage or claim arising out of or with respect to any failure to properly prepare and/or timely file such Form 10-K, where such failure results from the Trustee’s inability or failure to obtain or receive, on a timely basis, any information from any other party hereto needed to prepare, arrange for execution or file such Form 10-K, not resulting from its own negligence, bad faith or willful misconduct.

(c) Reports Filed on Form 8-K.

(i) Within four (4) Business Days after the occurrence of an event requiring disclosure on Form 8-K (each such event, a “Reportable Event”), and if requested by the Manager, the Trustee shall prepare and file on behalf of the Trust a Form 8-K, as required by the Exchange Act, provided that the Manager, on behalf of the Trust, shall file the initial Form 8-K in connection with the issuance of the Bonds. Any disclosure or information related to a Reportable Event or that is otherwise required to be included in Form 8-K (“Form 8-K Disclosure Information”) shall be determined and prepared by and at the direction of the Manager pursuant to the following paragraph and the Trustee will have no duty or liability for any failure hereunder to determine or prepare any Form 8-K Disclosure Information or any Form 8-K, except as set forth in the next paragraph.

(ii) As set forth on Exhibit X hereto, for so long as the Trust is subject to the Exchange Act reporting requirements, no later than the end of business on the 2nd Business Day after the occurrence of a Reportable Event (i) the parties to the Sequoia Mortgage Trust 201_-_ transaction shall be required to provide to the Trustee, to the extent known by a responsible officer thereof, in EDGAR-compatible form, or in such other form as otherwise agreed upon by the Trustee and such party, the form and substance of any Form 8-K Disclosure Information, if applicable, together with an Additional Disclosure Notification, (ii) the Trustee shall forward to the Manager, the form and substance of the Form 8-K Disclosure Information, and (iii) the Manager will approve, as to form and substance, or disapprove, as the case may be, the inclusion of the Form 8-K Disclosure Information. The Seller will be responsible for any reasonable fees and expenses assessed or incurred by the Trustee in connection with including any Form 8-K Disclosure Information in Form 8-K pursuant to this paragraph.

(iii) After preparing the Form 8-K, the Trustee shall forward electronically a draft copy of the Form 8-K to the Master Servicer and Manager for review. No later than the Business Day prior to the date specified in the next sentence, the Manager and the Master Servicer shall notify the Trustee of any changes to or approval of such Form 8-K. No later than Noon New York City time on the 4^th Business Day after the Reportable Event, the Manager shall cause a senior officer of the Master Servicer in charge of the master servicing function to sign the Form 8-K and return an electronic or fax copy of such signed Form 8-K (with an original executed hard copy to follow by overnight mail) to the Trustee. If a Form 8-K cannot be filed on time or if a previously filed Form 8-K needs to be amended, the Trustee will follow the procedures set forth in subsection (d) of this Section. Promptly (but no later than 1 Business Day) after filing with the Commission, the Trustee will, make available on its internet website a final executed copy of each Form 8-K. The parties to this Agreement acknowledge that the performance by the Master Servicer and the Trustee of its duties under this Section 8.07(c) related to the timely preparation, execution and filing of Form 8-K is contingent upon such parties strictly observing all applicable deadlines in the performance of their duties under this Section 8.07(c)(iii). Neither the Trustee nor the Master Servicer shall have any liability for any loss, expense, damage, claim arising out of or with respect to any failure to properly prepare, execute and/or timely file such Form 8-K, where such failure results from the Trustee’s inability or failure to obtain or receive, on a timely basis, any information from any other party hereto needed to prepare, arrange for execution or file such Form 8-K, not resulting from its own negligence, bad faith or willful misconduct.

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(d) Delisting; Amendments; Late Filings.

If the Depositor determines that the requirements for suspension of  the Trust Fund’s Exchange Act reporting requirements set forth in Rule 15d-22(b) of the Exchange Act and  any other applicable regulation are satisfied, it shall so notify the Securities Administrator.  Following receipt of such notice, the Securities Administrator shall prepare and file a Form 15 Suspension Notification with respect to the Trust Fund under the Exchange Act (a “Form 15”).  Subsequent to the filing of a Form 15, if the Depositor determines that the Trust Fund has once again become subject to the Exchange Act reporting requirements, then it shall promptly notify the Securities Administrator, and the Securities Administrator shall recommence preparing and filing required Exchange Act reports.  Prior to January 30 of the following calendar year, the Securities Administrator shall, if directed to do so by the Depositor, in accordance with industry standards, prepare and file a Form 15.

In the event that the Trustee becomes aware that it will be unable to timely file with the Commission all or any required portion of any Form 8-K, 10-D or 10-K required to be filed by this Agreement because required disclosure information was either not delivered to it or delivered to it after the delivery deadlines set forth in this Agreement or for any other reason, the Trustee will immediately notify the Manager. In the case of Form 10-D and 10-K, the parties to this Agreement and the Master Servicer will cooperate to prepare and file a Form 12b-25 and a 10-D/A and 10-K/A, as applicable, pursuant to Rule 12b-25 of the Exchange Act. In the case of Form 8-K, the Trustee will, upon receipt of all required Form 8-K Disclosure Information and upon the approval and direction of the Manager, include such disclosure information on the next Form 10-D. In the event that any previously filed Form 8-K, 10-D or 10-K needs to be amended, the Trustee will notify the Manager and the Master Servicer and such parties will cooperate to prepare any necessary 8-KA, 10-D/A or 10-K/A. Any Form 15, Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K shall be signed by the senior officer of the Depositor in charge of securitization. The parties to this Agreement acknowledge that the performance by the Master Servicer and the Trustee of its duties under this Section 8.07(d) related to the timely preparation, execution and filing of Form 15, a Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K is contingent upon each such party performing its duties under this Section. Neither the Master Servicer nor the Trustee shall have any liability for any loss, expense, damage, claim arising out of or with respect to any failure to properly prepare, execute and/or timely file any such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, where such failure results from the Trustee’s inability or failure to obtain or receive, on a timely basis, any information from any other party hereto needed to prepare, arrange for execution or file such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, not resulting from its own negligence, bad faith or willful misconduct.

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Notwithstanding anything to the contrary herein, the Trustee shall not file any Form 8-K, Form 10-D or Form 10K as to which it has received from the Manager a notice to the effect that, upon review of the proposed filing, the Manager does not approve of such filing.

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(e) Sarbanes-Oxley Certification.

Each Form 10-K shall include the Sarbanes-Oxley Certification. Each Servicer, the Trustee, the Master Servicer shall, and each Servicer, the Trustee and the Master Servicer shall cause any Servicing Function Participant engaged by it to, provide to the Person who signs the Sarbanes-Oxley Certification (the “Certifying Person”), by March 10 (with a 5 calendar day cure period) of each year in which the Trust is subject to the reporting requirements of the Exchange Act and otherwise within a reasonable period of time upon request, a certification (each, a “Back-Up Certification”), in the form attached hereto as Exhibit V (or in such other form attached to the Master Servicing Agreement), upon which the Certifying Person, the entity for which the Certifying Person acts as an officer, and such entity’s officers, directors and Affiliates (collectively with the Certifying Person, “Certification Parties”) can reasonably rely. The senior officer of the Depositor in charge of securitization shall serve as the Certifying Person on behalf of the Trust. In the event the Master Servicer, the Trustee or any Servicing Function Participant engaged by such parties is terminated or resigns pursuant to the terms of this Agreement, The Master Servicing Agreement, or any applicable sub-servicing agreement, as the case may be, such party or Servicing Function Participant shall provide a Back-Up Certification to the Certifying Person pursuant to this Section 8.07(e) with respect to the period of time it was subject to this Agreement or any applicable sub-servicing agreement, as the case may be. The Master Servicer shall enforce any obligation of the Servicers, to the extent set forth in the related Servicing Agreement, to deliver to the Master Servicer a certification similar to the Back-Up Certification as may be required pursuant to the related Servicing Agreement.

SECTION 8.08. TRUSTEE’S ANNUAL STATEMENT OF COMPLIANCE

The Trustee shall deliver (and the Trustee shall cause any Servicing Function Participant engaged by it to deliver) to the Manager on or before March 10 (with a 5 calendar day cure period) of each year, commencing in March 201_, an Officer’s Certificate stating, as to the signer thereof, that (A) a review of such party’s activities during the preceding calendar year or portion thereof and of such party’s performance under this Agreement, or such other applicable agreement in the case of a Servicing Function Participant, has been made under such officer’s supervision and (B) to the best of such officer’s knowledge, based on such review, such party has fulfilled all its obligations under this Agreement, or such other applicable agreement in the case of a Servicing Function Participant, in all material respects throughout such year or portion thereof, or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status thereof. Promptly after receipt of each such Officer’s Certificate, the Manager shall review such Officer’s Certificate and, if applicable, consult with each such party, as applicable, as to the nature of any failures by such party, in the fulfillment of any of such party’s obligations hereunder or, in the case of a Servicing Function Participant, under such other applicable agreement.

Section 8.09. TRUSTEE’S ASSESSMENT OF COMPLIANCE AND ATTESTATION REPORT

(a) By March 10 (with a 5 calendar day cure period) of each year, commencing in March 201_, the Trustee, at its own expense, shall furnish, and shall cause any Servicing Function Participant engaged by it to furnish, each at its own expense, to the Manager, a report on an assessment of compliance with the Relevant Servicing Criteria that contains (A) a statement by such party of its responsibility for assessing compliance with the Relevant Servicing Criteria, (B) a statement that such party used the Servicing Criteria to assess compliance with the Relevant Servicing Criteria, (C) such party’s assessment of compliance with the Relevant Servicing Criteria as of and for the fiscal year covered by the Form 10-K required to be filed pursuant to Section 8.07(b), including, if there has been any material instance of noncompliance with the Relevant Servicing Criteria, a discussion of each such failure and the nature and status thereof, and (D) a statement that a registered public accounting firm has issued an attestation report on such party’s assessment of compliance with the Relevant Servicing Criteria as of and for such period.

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(b) By March 10 (with a 5 calendar day cure period) of each year, commencing in March 201_, the Trustee, at its own expense, shall cause, and shall cause any Servicing Function Participant engaged by it to cause, each at its own expense, a registered public accounting firm (which may also render other services to the Trustee or such other Servicing Function Participants, as the case may be) and that is a member of the American Institute of Certified Public Accountants to furnish a report to the Manager, to the effect that (i) it has obtained a representation regarding certain matters from the management of such party, which includes an assertion that such party has complied with the Relevant Servicing Criteria, and (ii) on the basis of an examination conducted by such firm in accordance with standards for attestation engagements issued or adopted by the PCAOB, it is expressing an opinion as to whether such party’s compliance with the Relevant Servicing Criteria was fairly stated in all material respects, or it cannot express an overall opinion regarding such party’s assessment of compliance with the Relevant Servicing Criteria. In the event that an overall opinion cannot be expressed, such registered public accounting firm shall state in such report why it was unable to express such an opinion. Such report must be available for general use and not contain restricted use language.

(c) Promptly after receipt of such report on assessment of compliance and accountants’ report, (i) the Manager shall review such reports and, if applicable, consult with the Trustee and any Servicing Function Participant engaged by the Trustee as to the nature of any material instance of noncompliance with the Relevant Servicing Criteria by the Trustee, and (ii) the Trustee shall confirm that the assessments, taken as a whole, address all of the Servicing Criteria and taken individually address the Relevant Servicing Criteria for each party as set forth on Exhibit X and on any similar exhibit set forth in each Servicing Agreement in respect of each Servicer, and that each assessment is coupled with an attestation meeting the requirements of this Section and notify the Manager of any exceptions. The Trustee shall not be required to deliver any such assessments or accountants’ reports until April 15 in any given year so long as it has received written confirmation from the Manager that a Form 10-K is not required to be filed in respect of the Trust for the preceding calendar year.

SECTION 8.10. OTHER REPORTS BY TRUSTEE.

In addition to any statements required to be delivered or prepared by the Trustee pursuant to Section 2.09, 8.02, 8.06, 8.07 to 8.09 or 10.01, the Trustee shall deliver to the Issuer, within two Business Days after the request of the Issuer, a written report setting forth the amount of each Pledged Account established hereunder and the identity of the investments included therein. Without limiting the generality of the foregoing, the Trustee shall, upon the request of the Issuer, promptly transmit to the Issuer copies of all accountings of, and information with respect to, collections furnished to it by the Master Servicer and shall promptly notify the Issuer if on the second Business Day after any Distribution Account Deposit Date, the related Bond Distribution Amount or any portion thereof has not been received by the Trustee.

SECTION 8.11. TRUST ESTATE; RELEASE AND DELIVERY OF MORTGAGE DOCUMENTS.

(a) The Trustee may, and when required by the provisions of this Indenture shall, execute instruments in form supplied to it to release property from the lien of this Indenture, or convey the Trustee’s interest in the same, in a manner and under circumstances which are not inconsistent with the provisions of this Indenture and the TIA. No party relying upon an instrument executed by the Trustee as provided in this Article VIII shall be bound to ascertain the Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys.

(b) In order to facilitate the servicing of the Pledged Mortgages by the Servicers, the Master Servicer is authorized under the Master Servicing Agreement for the benefit of the Trustee, the Bondholders and the Issuer, to supervise, administer, monitor and oversee the servicing of the Pledged Mortgages by the Servicers and the observance and performance by the Servicers of all services, duties, responsibilities and obligations which are to be observed or performed by each Servicer pursuant to the Seller/Servicer Guide.

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(c) Upon request by the Master Servicer accompanied by a Request for Release in the form of Exhibit D to the Master Servicing Agreement to the effect that a Pledged Mortgage has been the subject of a Prepayment in Full or has otherwise been paid in full, together with any other items required under Section 8.12, the Trustee shall promptly release the related Mortgage Documents and execute such other documents as the Master Servicer may request to evidence satisfaction and discharge of such Pledged Mortgage.

(d) In addition, if from time to time and as appropriate for the servicing or foreclosure of any Pledged Mortgage, or the other purposes set forth in the Master Servicing Agreement, the Master Servicer requests the Trustee to release any related Mortgage Documents or other documents contained in the Trustee Mortgage File relating to such Pledged Mortgage and delivers to the Trustee a Request for Release in the form of Exhibit C to the Master Servicing Agreement to the Trustee and signed by a Servicing Officer, the Trustee shall release the related Mortgage Documents to the Master Servicer if the applicable requirements of the Master Servicing Agreement have been satisfied. If such Pledged Mortgage shall be liquidated and the Trustee receives an Issuer Request accompanied by a Request for Release as provided in subsection (c) above, together with any other items required under Section 8.12, then the Trustee shall release any documents with respect to such Pledged Mortgage still in its possession to or upon the order of the Issuer and shall execute such other documents as the Master Servicer may request to evidence satisfaction and discharge of such Pledged Mortgage, as set forth in subsection (c) above.

(e) The Trustee shall, at such time as there are no Bonds Outstanding, release all of the Trust Estate to the Issuer (other than any cash held for the payment of the Bonds pursuant to Section 3.03 or Section 4.02), subject, however, to Section 4.01 and the rights of the Trustee under Section 6.07.

SECTION 8.09. AMENDMENTS TO THE MASTER SERVICING AGREEMENT.

The Trustee may enter into or consent to any amendment or supplement to the Master Servicing Agreement or waive any Servicing Default only in accordance with the applicable provisions of the Master Servicing Agreement. The Trustee may, in its discretion, decline to enter into or consent to any such supplement or amendment or make any such waiver (i) unless the Trustee receives an Opinion of Counsel that the interests of the Holders would not be materially adversely affected or (ii) if its own rights, duties or immunities would be adversely affected.

SECTION 8.10. SERVICERS AND MASTER SERVICER AS AGENTS AND BAILEES OF TRUSTEE.

In order to facilitate the servicing of the Pledged Mortgages by the each Servicer or by the Master Servicer, each Servicer shall deposit in the Servicing Account proceeds of the Pledged Mortgages in accordance with the provisions of the Servicing Agreements, the Master Servicing Agreement and this Indenture, prior to the time they are deposited into the Bond Account. In addition, on each Withdrawal Date, the Master Servicer shall cause each Servicer to remit to the Master Servicer for deposit in the Bond Account all funds held in the Servicing Account that are required to be remitted to the Master Servicer in accordance with the terms of the Servicing Agreement and the Master Servicing Agreement. Solely for purposes of perfection under Section 9-305 of the Uniform Commercial Code or similar provision of law in the state in which such property is held by the Servicers or the Master Servicer, the Trustee hereby designates the Master Servicer and each Servicer as its agents and bailees to hold such funds with respect to the Pledged Mortgages until they are deposited into the Distribution Account as well as its agents and bailees in holding any Mortgage Documents or other documents contained in a Trustee Mortgage File released to it by the Trustee pursuant to Section 8.08(d), and any other items constituting a part of the Trust Estate which from time to time come into possession of any Servicer or the Master Servicer. It is intended that, by the Servicers’ and Master Servicer’s acceptance of such agency pursuant to the Servicing Agreements and the Master Servicing Agreement, the Trustee, as secured party, will be deemed to have possession of such Mortgage Documents, such moneys and such other items for purposes of Section 9-305 of the Uniform Commercial Code or similar provision of law of the states in which such property is held by such Servicer or the Master Servicer.

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SECTION 8.11. OPINION OF COUNSEL.

The Trustee shall be entitled to receive at least five Business Days’ notice of any action to be taken pursuant to Section 8.08(a) (other than in connection with releases of Pledged Mortgages which were the subject of a Principal Prepayment in Full) accompanied by copies of any instruments involved, and the Trustee shall be entitled to request an Opinion of Counsel, in form and substance reasonably satisfactory to the Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with. Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Trustee in connection with any such action.

SECTION 8.12. RELEASE OF PLEDGED MORTGAGES.

(a) The Issuer shall be entitled to request a release from the lien of this Indenture of any Pledged Mortgage at any time after such Pledged Mortgage has been the subject of a Principal Prepayment in Full or in accordance with the requirements of Section 8.04 if:

(i) the Master Servicer has complied with all requirements imposed on it by Section 8.04 in connection with such Pledged Mortgage (or is deemed to have complied with such requirements by reason of the provisions of Section 8.04(e));

(ii) at the time such release is requested, no Default or Event of Default has occurred and is continuing; provided, however, that if a Pledged Mortgage has been the subject of a Principal Prepayment in Full, then the Trustee shall release such Pledged Mortgage from the lien of this Indenture upon compliance with all other conditions of this subsection (a), notwithstanding the existence of a Default or Event of Default;

(iii) the Master Servicer delivers to the Trustee an Officers’ Certificate (A) identifying the Pledged Mortgage to be released, (B) requesting the release thereof, (C) setting forth the amount deposited in the Bond Account with respect thereto, if any, and (D) certifying that the conditions set forth in clauses (i) and (ii) above have been satisfied; and

(iv) the Issuer delivers to the Trustee a certificate of fair value if required by Section 314(d)(1) or Section 314(d)(3) of the TIA.

(b) Upon satisfaction of the conditions specified in subsection (a) of this Section 8.12, the Trustee shall release from the lien of this Indenture and deliver to or upon the order of the Master Servicer the Pledged Mortgage to be released (including all related Mortgage Documents) described in the Master Servicer’s Request for Release.

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ARTICLE IX

SUPPLEMENTAL INDENTURES

SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS.

Without the consent of the Holders of any Bonds, the Issuer and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

(1) to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property;

(2) to add to the conditions, limitations and restrictions on the authorized amount, terms and purposes of the issuance, authentication and delivery of any Bonds, as herein set forth, additional conditions, limitations and restrictions thereafter to be observed;

(3) to evidence the succession of another Person to the Issuer, and the assumption by any such successor of the covenants of the Issuer herein and in the Bonds contained;

(4) to add to the covenants of the Issuer, for the benefit of the Holders of all Bonds or to surrender any right or power herein conferred upon the Issuer;

(5) to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, which shall not be inconsistent with the provisions of this Indenture, provided that such action shall not adversely affect the interests of the Holders of the Bonds (any such action shall be deemed not to adversely affect the interests of the Bondholders if the Issuer delivers to the Trustee letters from each Rating Agency to the effect that such action will not result in a downgrading of the Bonds);

(6) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA or under any similar federal statute hereafter enacted, and to add to this Indenture such other provisions as may be expressly required by the TIA; or

(7) to set forth the terms of Additional Bonds and to pledge Additional Mortgage Collateral for such Additional Bonds.

The Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture that affects the Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise except to the extent required by law.

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The Trustee may in its discretion determine whether or not the rights of the Holder of Bonds would be adversely affected by any supplemental indenture, and any such determination shall be conclusive upon the Holders of all Bonds, whether theretofore or thereafter authenticated and delivered hereunder. In making such determination, a supplemental indenture shall be conclusively deemed by the Trustee not to adversely affect the Bonds if (i) the Trustee receives a letter or other writing from each Rating Agency rating the Bonds to the effect that execution of the supplemental indenture will not result in any change in the current rating assigned by that Rating Agency to the Bonds and (ii) the supplemental indenture effects no change in principal priority schedules, interest rates, Redemption Prices, substitution of Mortgage Collateral, Payment Dates, Record Dates, Accounting Dates, terms or optional Redemption, the application of surplus to the payment of the Bonds or other payment terms. The Trustee shall not be liable for any such determination made in good faith.

[The Trustee shall provide the Bond Insurer, if any, with a copy of any supplemental indenture executed pursuant to this Section, by first class mail mailed to the Bond Insurer within five Business Days after the execution of such supplemental indenture. Notwithstanding the foregoing, no supplemental indenture that changes in any way any of the payment terms of the Bonds may be entered into without the prior written consent of such Bonder Insurer.]

SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS.

With the consent of the Holders of Bonds representing not less than two-thirds of the aggregate Class Principal Amount of the Controlling Class by Act of said Holders delivered to the Issuer and the Trustee [and the Bond Insurer], the Issuer and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Bonds under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Bond affected thereby:

(1) change the Stated Maturity of the final installment of the principal of, or any installment of interest on, any Bond or reduce the principal amount thereof, the Bond Interest Rate thereon or the Redemption Price with respect thereto, change the earliest date on which any Bond may be redeemed at the option of the Issuer, change any place of payment where, or the coin or currency in which, any Bond or any interest thereon is payable, or impair the right to institute suit for the enforcement of the payment of any installment of interest due on any Bond on or after the Stated Maturity thereof or for the enforcement of the payment of the entire remaining unpaid principal amount of any Bond on or after the Stated Maturity of the final installment of the principal thereof (or, in the case of redemption, on or after the applicable Optional Redemption Date);

(2) reduce the percentage of the aggregate Class Principal Amount of the Controlling Class, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with provisions of this Indenture or Defaults hereunder and their consequences provided for in this Indenture;

(3) modify any of the provisions of this Section, Section 5.14 or Section 5.18(b) except to increase any percentage specified therein or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Bond affected thereby;

(4) modify or alter the provisions of the proviso to the definition of the term “Outstanding”;

(5) permit the creation of any lien ranking prior to or on a parity with the lien of this Indenture with respect to any part of the Trust Estate (except for Permitted Encumbrances) or terminate the lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Bond of the security afforded by the lien of this Indenture; or

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(6) modify any of the provisions of this Indenture in such manner as to materially and adversely affect rights of the Holders of the Controlling Class to the benefits of any provisions for the mandatory redemption of Bonds contained herein.

The Trustee may in its discretion determine whether or not the rights of the Holder of any Controlling Class would be materially and adversely affected by any supplemental indenture and any such determination shall be conclusive upon the Holders of all Bonds authenticated and delivered hereunder. The Trustee shall not be liable for any such determination made in good faith.

It shall not be necessary for any Act of Bondholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

Promptly after the execution by the Issuer and the Trustee of any supplemental indenture pursuant to this Section, the Trustee shall mail to the Holders of the Bonds to which such supplemental indenture relates [and to the Bond Insurer] a notice setting forth in general terms the substance of such supplemental indenture. Any failure of the Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES.

In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURES.

Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Bonds to which such supplemental indenture relates which have theretofore been or thereafter are authenticated and delivered hereunder shall be bound thereby.

SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT.

Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the TIA as then in effect so long as this Indenture shall then be qualified under the TIA.

SECTION 9.06. REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES.

Bonds authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and if required by the Trustee shall, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Issuer shall so determine, new Bonds so modified as to conform, in the opinion of the Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Trustee in exchange for Controlling Class.

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SECTION 9.07. AMENDMENTS TO DEPOSIT TRUST AGREEMENT OR MASTER SERVICING AGREEMENT.

The Trustee shall, upon Issuer Request, consent to any proposed amendment to the Deposit Trust Agreement or Master Servicing Agreement, or an amendment to or waiver of any provision of any other document relating to the Deposit Trust Agreement or Master Servicing Agreement, such consent to be given without the necessity of obtaining the consent of the Holders of any Bonds upon receipt by the Trustee of:

(i) an Opinion of Counsel to the effect that such amendment or waiver will not materially and adversely affect the interests of the Holders of the Bonds and that all conditions precedent to such consent specified in this Section 9.07 have been satisfied; provided, however, that no such Opinion of Counsel shall be required if the Person requesting the amendment obtains a letter from each Rating Agency stating that the amendment would not result in the downgrading or withdrawal of the respective ratings then assigned to the Bonds; it being understood and agreed that any such letter in and of itself will not represent a determination as to the materiality of any such amendment and will represent a determination only as to the credit issues affecting any such rating;

(ii) an Officers’ Certificate, to which such proposed amendment or waiver shall be attached, stating that such attached copy is the true copy of the proposed amendment or waiver and that all conditions precedent to such consent specified in this Section 9.07 have been satisfied;

(iii) written confirmation from the Rating Agencies that the implementation of the proposed amendment or waiver will not adversely affect their rating of the Bonds; and

(iv) any other document required pursuant to Section 11.01.

Notwithstanding the foregoing, the Trustee may decline to consent to a proposed waiver or amendment that adversely affects its own rights, duties or immunities under this Indenture or otherwise.

Nothing in this Section 9.07 shall be construed to require that any Person obtain the consent of the Trustee to any amendment or waiver or any provision of any document where the making of such amendment or the giving of such waiver without obtaining the consent of the Trustee is not prohibited by this Indenture or by the terms of the document that is the subject of the proposed amendment or waiver.

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ARTICLE X

REDEMPTION OF BONDS

SECTION 10.01. SPECIAL REDEMPTION; REDEMPTION.

(a) The Bonds shall not be subject to special redemption.

(b) The Bonds shall be subject to redemption by the Issuer, in whole but not in part, at the option of the Issuer, on any Payment Date on or after the Payment Date on which the sum of (i) the Invested Amount, (ii) the Senior Class Principal Amount, (iii) the Class [B-1] Principal Amount and (iv) the Class [B-2] Principal Amount, after giving effect to payments expected to be made on such Payment Date, is __% or less than the aggregate of the Stated Principal Balances of the Pledged Mortgages as of the Cut-Off Date [(including the Additional Bonds)], on the terms and conditions specified in this subsection (b) at the Redemption Price. If the Issuer elects to so redeem the Bonds, it shall, no later than 30 days prior to the Optional Redemption Date selected for such redemption, deliver notice of such election to the Trustee, together with the Redemption Price therefor to be deposited in the Distribution Account, an Issuer Order directing the Trustee to effect such redemption, any certification and opinion required pursuant to Section 11.01 and a form of redemption notice. All Bonds so redeemed shall be due and payable on such Optional Redemption Date upon the giving of the notice thereof required by Section 10.02.

SECTION 10.02. FORM OF REDEMPTION NOTICE.

Notice of redemption shall be given by the Trustee in the name of and at the expense of the Issuer by first class mail, postage prepaid, mailed not less than five days prior to the applicable Optional Redemption Date (but in no event prior to the date on which the Redemption Price with respect to the Bonds to be redeemed pursuant to subsection (b) of Section 10.01 has been deposited in the Distribution Account) to each Holder of Bonds to be redeemed, such Holders being determined as of the last day of the month preceding the month in which such Optional Redemption Date occurs (the “Optional Redemption Record Date”).

All notices of redemption shall state:

(1) the Optional Redemption Date; and

(2) the fact of such payment in full, the place where such Bonds are to be surrendered for payment of the Redemption Price (which shall be the office or agency of the Issuer to be maintained as provided in Section 3.02) and that no interest shall accrue on such Bond for any period after the last day of the month preceding the month in which the date fixed for redemption occurs. Failure to give notice of redemption, or any defect therein, to any Holder of any Bond selected for redemption shall not impair or affect the validity of the redemption of any other Bond.

SECTION 10.03. BONDS PAYABLE ON OPTIONAL REDEMPTION DATE.

Notice of redemption having been given as provided in Section 10.02, the Bonds or portions thereof so to be redeemed shall, on the applicable Optional Redemption Date, become due and payable at the Redemption Price and (unless the Issuer shall default in the payment of the Redemption Price) no interest shall accrue on such Redemption Price for any period after the last day of the month preceding the month in which such Optional Redemption Date occurs.

ARTICLE XI

MISCELLANEOUS

SECTION 11.01. COMPLIANCE CERTIFICATES AND OPINIONS.

Upon any application or request by the Issuer to the Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

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Every certificate, opinion or letter with respect to compliance with a condition or covenant provided for in this Indenture (including one furnished pursuant to specific requirements of this Indenture relating to a particular application or request) shall include:

(1) a statement that each individual signing such certificate, opinion or letter has read such covenant or condition and the definitions herein relating thereto;

(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate, opinion or letter are based;

(3) a statement that, in the opinion of each such individual, he or she has made such examination or investigation as is necessary to enable such individual to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

SECTION 11.02. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents

Any certificate or opinion of an officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his other certificate or opinion is based are erroneous. Any such Issuer certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an Authorized Officer or Officers of the Owner Trustee or a certificate of the officers of the Depositor or the manager of the Issuer, stating that the information with respect to such factual matters is in the possession of the Owner Trustee, or the Depositor or the manager of the Issuer, unless such officer or counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Any Opinion of Counsel may be based on the written opinion of other counsel, in which event such Opinion of Counsel shall be accompanied by a copy of such other counsel’s opinion and shall include a statement to the effect that such counsel believes that such counsel and the Trustee may reasonably rely upon the opinion of such other counsel.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Wherever in this Indenture, in connection with any application or certificate or report to the Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Trustee’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Section 6.01(b)(2).

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Whenever in this Indenture it is provided that the absence of the occurrence and continuation of a Default or Event of Default is a condition precedent to the taking of any action by the Trustee at the request or direction of the Issuer, then, notwithstanding that the satisfaction of such condition is a condition precedent to the Issuer’s right to make such request or direction, the Trustee shall be protected in acting in accordance with such request or direction if it does not have knowledge of the occurrence and continuation of such Default or Event of Default as provided in Section 6.01(d).

SECTION 11.03. ACTS OF BONDHOLDERS.

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Bondholders may be embodied in any evidence by one or more instruments of substantially similar tenor signed by such Bondholders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Bondholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgements of deeds, certifying that the individual signing such instrument or writing acknowledged to him or her the execution thereof. Whenever such execution is by an officer of a corporation or a member of a partnership on behalf of such corporation or partnership, such certificate or affidavit shall also constitute sufficient proof of his or her authority.

(c) The ownership of Bonds shall be proved by the Bond Register.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Bonds shall bind the Holder of every Bond issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Trustee or the Issuer in reliance thereon, whether or not any notation of such action is made upon such Bonds.

SECTION 11.04. NOTICES, ETC. TO TRUSTEE AND ISSUER.

Any request, demand, authorization, direction, notice, consent, waiver or Act of Bondholders or other documents provided or permitted by this Indenture to be made upon, given or furnished to, or filed with:

(1) the Trustee by any Bondholder or by the Issuer shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with and received by the Trustee at its Corporate Trust Office;

(2) the Issuer by the Trustee or by any Bondholder shall be sufficient for every purpose hereunder (except as provided in Sections 5.01(3) and (4)) if in writing and mailed, first-class, postage prepaid, to the Issuer addressed to it c/o ____________________________________________, Attention: Corporate Trust Administration, or at any other address previously furnished in writing to the Trustee by the Issuer;

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(3) any Rating Agency by the Trustee, the Issuer or the Master Servicer shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with and received by such Rating Agency at the address specified therefor in the definition corresponding to the name of such Rating Agency; or

[(4) the Bond Insurer by the Trustee, the Issuer or any Bondholder shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage prepaid to the Bond Insurer at ________________ _____________________.]

SECTION 11.05. NOTICES AND REPORTS TO BONDHOLDERS; WAIVER OF NOTICES.

Where this Indenture provides for notice to Bondholders of any event or the mailing of any report to Bondholders, such notice or report shall be sufficiently given (unless otherwise herein expressly provided) if mailed, first-class, postage prepaid, to each Bondholder affected by such event or to whom such report is required to be mailed, at the address of such Bondholder as it appears on the Bond Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice or the mailing of such report. In any case where a notice or report to Bondholders is mailed in the manner provided above, neither the failure to mail such notice or report, nor any defect in any notice or report so mailed, to any particular Bondholder shall affect the sufficiency of such notice or report with respect to other Bondholders, and any notice or report which is mailed in the manner herein provided shall be conclusively presumed to have been duly given or provided.

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waiver of notice by any Bondholder shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to Bondholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice.

Where this Indenture provides for notice to Bondholders of any event, such notice shall also be sent to ______________________________________ __________________________, so long as [ ] is a Rating Agency.

SECTION 11.06. RULES BY TRUSTEE AND AGENTS.

The Trustee may make reasonable rules for any meeting of Bondholders. Any Agent may make reasonable rules and set reasonable requirements for its functions.

SECTION 11.07. CONFLICT WITH TRUST INDENTURE ACT.

If this Indenture is qualified under the TIA and any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Indenture by any of the provisions of the TIA, such required provision shall control.

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SECTION 11.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS.

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

SECTION 11.09. SUCCESSORS AND ASSIGNS.

All covenants and agreements in this Indenture by the Issuer shall bind its successors and assigns, whether so expressed or not.

SECTION 11.10. SEPARABILITY.

In case any provision in this Indenture or in the Bonds shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 11.11. BENEFITS OF INDENTURE.

Nothing in this Indenture or in the Bonds, expressed or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any separate trustee or co-trustee appointed under Section 6.14 and the Bondholders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

SECTION 11.12. LEGAL HOLIDAYS.

In any case where the date of any Payment Date, Redemption Date or any other date on which principal of, or interest on, any Bond is proposed to be paid shall not be a Business Day, then (notwithstanding any other provision of the Bonds or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the nominal date of any such Payment Date, Optional Redemption Date or other date for the payment of principal of, or interest on, any Bond, as the case may be, and no interest shall accrue for the period from and after any such nominal date, provided such payment is made in full on such next succeeding Business Day.

SECTION 11.13. GOVERNING LAW.

This Indenture and each Bond shall be construed in accordance with and governed by the substantive laws of the State of New York applicable to agreements made and to be performed in the State of New York and the obligations, rights and remedies of the parties hereto and the Bondholders shall be determined in accordance with such laws.

SECTION 11.14. COUNTERPARTS.

This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

SECTION 11.15. RECORDING OF INDENTURE.

This Indenture is subject to recording in any appropriate public recording office, such recording to be effected by the Issuer and at its expense in compliance with any Opinion of Counsel delivered pursuant to Section 2.12(c) or Section 3.06.

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SECTION 11.16. ISSUER OBLIGATION.

No recourse may be taken, directly or indirectly, against (i) the Bank, (ii) any incorporator, subscriber to the capital stock, stockholder, officer or director of the Bank or of any predecessor or successor of the Bank, (iii) any holder of a beneficial interest in the Issuer (solely in its capacity as such), (iv) any incorporator, subscriber to the capital stock, stockholder, partner, beneficiary, agent, officer, director, employee, or successor or assign of a holder of a beneficial interest in the Issuer, (v) the Depositor or any Affiliate thereof (other than the Issuer) or (vi) any incorporator, subscriber to the capital stock, stockholder, officer, director or employee of the Trustee or any predecessor or successor of the Trustee with respect to the Issuer’s obligation with respect to the Bonds or the obligation of the Issuer or the Trustee under this Indenture or any certificate or other writing delivered in connection herewith or therewith.

SECTION 11.17. INSPECTION.

The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Trustee, during the Issuer’s normal business hours, to examine all books of account, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent Accountants selected by the Trustee, and to discuss its affairs, finances and accounts with its officers, employees and Independent Accountants (and by this provision the Issuer hereby authorizes its Accountants to discuss with such representatives such affairs, finances and accounts), all at such reasonable times and as often as may be reasonably requested. Any expense incident to the exercise by the Trustee of any rights under this Section 11.17 shall be borne by the Issuer.

SECTION 11.18. USURY.

The amount of interest payable or paid on any Bond under the terms of this Indenture shall be limited to an amount which shall not exceed the maximum nonusurious rate of interest allowed by the applicable laws of the United States or the State of New York (whichever shall permit the higher rate), which could lawfully be contracted for, charged or received (the “Highest Lawful Rate”). In the event any payment of interest on any Bond exceeds the Highest Lawful Rate, the Issuer stipulates that such excess amount will be deemed to have been paid as a result of an error on the part of both the Trustee, acting on behalf of the Holder of such Bond, and the Issuer, and the Holder receiving such excess payment shall promptly, upon discovery of such error or upon notice thereof from the Issuer or the Trustee, refund the amount of such excess or, at the option of the Trustee, apply the excess to the payment of principal of such Bond, if any, remaining unpaid.

SECTION 11.19. NO PETITION.

The Trustee, by entering into this Indenture, and each Bondholder, by accepting a Bond, hereby covenant and agree that they will not at any time institute against the Depositor or the Issuer, or join in any institution against the Depositor or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Bonds, this Indenture or any of the Operative Agreements.

ARTICLE XII

THE BOND INSURER

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SECTION 12.01. CERTAIN MATTERS REGARDING THE BOND INSURER AND THE BOND INSURANCE POLICY.

[as set forth in the applicable policy]

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IN WITNESS WHEREOF, each party has caused this Indenture to be executed by its duly authorized officer or officers as of the day and year first above written.

SEQUOIA MORTGAGE TRUST 201_-_,

as Issuer

By:

not in its individual capacity but

solely as Owner Trustee

By:

Name:

Title:

as Trustee

By:

Name:

Authorized Officer

By:

Name:

Title:

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STATE OF DELAWARE )

) ss.:

COUNTY OF NEW CASTLE )

On the ____ day of _____________ in the year one thousand nine hundred and ninety-_____ before me personally came __________________________, to me known, who being by me duly sworn did depose and say that she/he resides in _______________, that she/he is the ______________________ of ________________, the corporation described in and which executed the above instrument and that she/he signed her/his name thereto by authority of the Board of Directors of said corporation.

[NOTARIAL SEAL]

Notary Public

STATE OF _________________ )

) ss.:

COUNTY OF ________________ )

On the ____ day of __________, 201__, before me, a notary public in and for said State, personally appeared ___________________________, known to me (or proved to me on the basis of satisfactory evidence) to be a __________________ of ____________________________________, the ___________________ corporation that executed the within instrument, and also known to me (or proved to me on the basis of satisfactory evidence) to be the persons who executed it on behalf of said _____________________ corporation, and acknowledged to me that such ___________________ corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

[NOTARIAL SEAL]

Notary Public

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EXHIBIT I

LETTER AGREEMENT WITH THE DEPOSITORY

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EXHIBIT II

FORM OF SENIOR BOND

The form of Senior Bond is as follows:

PRINCIPAL OF THIS BOND IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE CLASS PRINCIPAL AMOUNT OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE CLASS PRINCIPAL AMOUNT OF THIS BOND MAY BE ASCERTAINED ONLY BY OBTAINING A CONFIRMATION THEREOF FROM THE TRUSTEE UNDER THE INDENTURE REFERRED TO BELOW.

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND SO ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR USE HEREOF, FOR VALUE OR OTHERWISE, BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

SEQUOIA MORTGAGE TRUST 201_-_,

a Delaware Statutory Business Trust

Collateralized Mortgage Bonds

CLASS [A-1]

DUE: __________ ___, _____

ACCRUAL DATE: __________ ___, _____

ISSUE DATE: __________ ___, _____

[ ] INTEREST RATE

Initial Class Principal

Amount of this Bond:

$____________________ CUSIP NO.___

CERTIFICATE NUMBER 1

Sequoia Mortgage Trust 201 _-_ (the “Issuer”), a statutory business trust formed under the Deposit Trust Agreement dated as of _____________ ___, 201__ and having _________________________, a Delaware bank and trust company, as Owner Trustee, for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum of [AMOUNT IN WORDS] ($_______) in monthly installments on the ____________ day of each month, commencing on ________ _ ___, _____ (each, a “Payment Date”), and ending on or before __________ ___, _____, (the “Stated Maturity” of such final installment of principal), and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the Class Principal Amount (as defined in the Indenture hereinafter referred to) of this Bond from time to time from _________ ___, _____ (the “Accrual Date”), or such later date to which interest has been paid, through the last day of the month preceding the month in which the principal amount of this Bond is paid in full, at a [variable/fixed] rate determined as described below, such interest being payable monthly on each Payment Date. If any Payment Date shall not be a “Business Day” (as defined in the Indenture), payment of the amount due will be made on the next succeeding Business Day.

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Installments of principal of this Bond are due and payable as described in the Indenture.

Interest payable on this Bond on a Payment Date will be equal to the amount of interest that has accrued on the Class Principal Amount of this Bond during the one-month period ending on the last day of the month preceding the month in which each such Payment Date occurs (each, an “Interest Accrual Period”).

The principal of, and interest on, this Bond are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Bond shall be applied as set forth in the Indenture. Any installment of principal or interest which is not paid when and as due shall bear interest as described in the Indenture.

Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Bond shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, Sequoia Mortgage Trust 201_-_ has caused this instrument to be duly executed by its duly authorized officer.

Dated:_______________

SEQUOIA MORTGAGE TRUST 201_-_

By:

not in its individual capacity

but solely as Owner Trustee

By:

Title:

CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

,

as Trustee

By:

Authorized Signatory

This Bond is one of a duly authorized issue of Bonds of the Issuer, designated as its Collateralized Mortgage Bonds, Series 201_-_ (herein called the “Bonds”). The Bonds are issuable in one or more classes; the Bonds of particular Classes being herein called the Class [A-1], Class [B-1] and Class [B-2] Bonds, all issued and to be issued under the Issuer’s Indenture dated as of ____________ ___, 201__ between the Issuer and _______________________________ (the “Trustee”, which term includes any successor Trustee under the Indenture), which authorized the Bonds, and reference is hereby made thereto for a statement of the respective rights thereunder of the Issuer, the Trustee and the Holders of the Bonds of each particular Class thereof and the terms upon which the Bonds of each Class are, and are to be, authenticated and delivered.

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The Class [A-1] Bonds constitute “Senior Bonds” and the Class [B-1] Bonds and the Class [B-2] Bonds constitute “Subordinated Bonds”.

All terms used in this Bond which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

The Bond Interest Rate for the Senior Bonds (the “Senior Bond Interest Rate”) and any Interest Accrual Period will equal _______________.

As provided in the Indenture, the Bonds are issuable in Classes which may vary as is provided or permitted in the Indenture. Bonds of each Class are equally and ratably secured by the collateral pledged as security therefor to the extent provided by the Indenture.

For each Principal Payment Date, the aggregate amount of each installment of principal due and payable on the Senior Bonds will be equal to the Senior Principal Payment Amount for such Payment Date. The Senior Principal Payment Amount for any Payment Date is equal to the Senior Percentage of the sum of (a) the principal portion of the Scheduled Payment due on each Pledged Mortgage [on the related Due Date], (b) the principal portion of the purchase price of each Pledged Mortgage that was purchased by [_________] or another person pursuant to the Mortgage Loan Purchase Agreement [or any optional purchase by the Master Servicer of a defaulted Pledged Mortgage] as of such Payment Date, (c) the Substitution Adjustment Amount in connection with any Deleted Pledged Mortgage received with respect to such Payment Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of principal of Pledged Mortgages that are not yet Liquidated Pledged Mortgages received during the [calendar month] preceding the month of such Payment Date, (e) with respect to each Pledged Mortgage that became a Liquidated Pledged Mortgage during the [calendar month] preceding the month of such Payment Date, the Stated Principal Balance of such Pledged Mortgage, and (f) all partial and full principal prepayments by borrowers received during the related Prepayment Period.

Payments of principal or interest, if any, on the Bonds will be made on each Payment Date, commencing on ____________ ___, 201__, in the manner and in accordance with the priorities for the Bonds provided in the Indenture.

The entire unpaid principal amount of each Class of Bonds shall be due and payable, if not then previously paid, on the Stated Maturity of the final installment of principal of such Class.

All payments of principal of, and interest on, the Bonds shall be made only from the Trust Estate Granted as security for the Bonds and any other assets of the Issuer that have not been Granted as security for any other bonds or obligations of the Issuer, and each Holder hereof, by its acceptance of this Bond, agrees that it will have recourse solely against such Trust Estate and such other assets of the Issuer and that neither ________________________ in its individual capacity, any holder of a beneficial interest in the Issuer nor any of their respective shareholders, partners, beneficiaries, agents, officers, directors, employees, successors or assigns shall be personally liable for any amounts payable, or performance due, under this Bond or the Indenture.

Payment of the then remaining unpaid principal amount of this Bond on the Stated Maturity of its final installment of principal or on such earlier date as the Issuer shall be required to pay the then remaining unpaid principal amount of this Bond or payment of the Redemption Price payable on any date as of which this Bond has been called for redemption in full, shall be made upon presentation of this Bond to the office or agency of the Issuer maintained for such purpose. Payments of interest on this Bond due and payable on each Payment Date or on any Optional Redemption Date, to the extent this Bond is not being paid in full, together with any installment of principal of this Bond due and payable on each Payment Date or the Optional Redemption Date, to the extent not in full payment of this Bond, shall be made by check mailed to the Person whose name appears as the registered Holder of this Bond (or one or more Predecessor Bonds) on the Bond Register as of the last day of the month preceding the month in which such Payment Date occurs (each a “Record Date”).

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Checks for amounts which include installments of principal due on this Bond shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Bond Register as of the applicable Record Date without requiring that this Bond be submitted for notation of payment and checks returned undelivered will be held for payment to the Person entitled thereto, subject to the terms of the Indenture, at the office or agency in the United States of America designated by the Issuer for such purpose pursuant to the Indenture. Any reduction in the principal amount of this Bond (or any one or more Predecessor Bonds) effected by any payments made on any Payment Date shall be binding upon all Holders of this Bond and of any Bond issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not noted hereon.

If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Bond on a Payment Date or Optional Redemption Date which is prior to the Stated Maturity of the final installment of principal hereof, then the Trustee, on behalf of the Issuer, will notify the Person who was the registered Holder hereof on the last day of the month prior to the month in which such Payment Date or Optional Redemption Date occurs, and the amount then due and payable shall, if sufficient funds therefor are available, be payable only upon presentation of this Bond to the office or agency of the Issuer maintained for such purpose.

The failure of the Issuer to pay when and as due any installment of principal of (regardless of the lapse of any grace period) any Senior Bond shall not constitute an Event of Default under the Indenture unless the Senior Class Principal Amount exceeds the aggregate Stated Principal Balances of the Pledged Mortgages after application of all available amounts on deposit in the Distribution Account on a Payment Date.

If an Event of Default as defined in the Indenture shall occur and be continuing with respect to the Bonds, the Bonds may become or be declared due and payable in the manner and with the effect provided in the Indenture. If any such acceleration of maturity occurs prior to the Stated Maturity of the final installment of principal of this Bond, the amount payable to the Holder of this Bond will be equal to the Class Principal Amount of this Bond on the date this Bond becomes so due and payable, together with accrued interest. Following the acceleration of the maturity of the Bonds, all amounts collected as proceeds of the collateral securing the Bonds or otherwise shall be applied as described in the Indenture. Following such acceleration, interest on any overdue installments of interest on all Bonds shall be payable at the rate set forth in the Indenture.

The Bonds are not prepayable or redeemable at the option or direction of the Issuer except that the Bonds are subject to redemption in whole, but not in part, at the option of the Issuer on any Payment Date on or after the Payment Date on which the sum of (i) the Invested Amount, (ii) the Senior Class Principal Amount, (iii) the Class [B-1] Principal Amount and (iv) the Class [B-2] Principal Amount, after giving effect to payments expected to be made on such Payment Date, is __% or less of the aggregate of the Stated Principal Balances of the Pledged Mortgages as of the Cut- Off Date. Any such redemption at the option of the Issuer shall be at a price equal to 100% of the unpaid principal amount of the Bonds (including, in the case of the Subordinated Bonds, any unpaid Class [B-1] Principal Carryover Shortfall and/or Class [B-2] Principal Carryover Shortfall) so redeemed plus accrued interest through the last day of the month preceding the month in which such optional redemption occurs.

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As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Bond may be registered on the Bond Register of the Issuer, upon surrender of this Bond for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Trustee duly executed by the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Bonds of the same Class, of authorized denominations and in the same aggregate initial principal amount, will be issued to the designated transferee or transferees.

Prior to the due presentment for registration of transfer of this Bond, the Issuer, the Trustee, and any agent of the Issuer shall treat the Person in whose name this Bond is registered (i) on any Record Date, for purposes of making payments, and (ii) on any other date for any other purposes, as the owner hereof, whether or not this Bond be overdue, and neither the Issuer, the Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Bonds under the Indenture at any time by the Issuer with the consent of the Holders of Bonds representing two-thirds of the aggregate Class Principal Amount of the Controlling Class. The Indenture also contains provisions permitting the Holders of Bonds representing specified percentages of the aggregate Class Principal Amount of the Controlling Class on behalf of the Holders of all the Bonds of such Class, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder, at the time of the giving thereof, of this Bond (or any one or more Predecessor Bonds) shall be conclusive and binding upon such Holder and upon all future holders of this Bond and of any Bond issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Bond. The Indenture also permits the Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of the Holders of the Bonds of any Series issued thereunder.

The Senior Bonds are “Book Entry Bonds” which will be available to investors only through the book entry facilities of The Depository Trust Company, and bond certificates for all Classes of Bonds will be available only under certain limited circumstances as described in the Indenture.

AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

No reference herein to the Indenture and no provision of this Bond or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional to the extent permitted by applicable law, to pay the principal of, and interest on, this Bond at the times, place and rate, and in the coin or currency herein prescribed.

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EXHIBIT III

FORM OF A CLASS [B-1] BOND

The form of a Class [B-1] Bond is as follows:

PRINCIPAL OF THIS BOND IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE CLASS PRINCIPAL AMOUNT OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE CLASS PRINCIPAL AMOUNT OF THIS BOND MAY BE ASCERTAINED ONLY BY OBTAINING A CONFIRMATION THEREOF FROM THE TRUSTEE UNDER THE INDENTURE REFERRED TO BELOW.

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS BOND IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR BONDS AS DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.

THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSE OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT (“OID”) RULES TO THIS BOND. THE ISSUE DATE OF THIS BOND IS __________ ___, 201__. THE PER ANNUM RATE OF INTEREST ON THIS BOND IS ___% ASSUMING THAT PRINCIPAL PAYMENTS ARE MADE ON THE MORTGAGE COLLATERAL UNDERLYING THE BONDS AT _______% OF THE STANDARD PREPAYMENT ASSUMPTION (AS DEFINED IN THE PROSPECTUS SUPPLEMENT) THIS BOND HAS BEEN ISSUED WITH $ OF OID PER $1,000 OF INITIAL PRINCIPAL AMOUNT, THE YIELD TO MATURITY IS ___% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL SHORT ACCRUAL PERIOD IS $_______ OF OID PER $1,000 OF INITIAL PRINCIPAL AMOUNT, CALCULATED ASSUMING THE YIELD IS ACCRUED DAILY DURING INITIAL SHORT PERIOD. NO REPRESENTATION IS MADE AS TO THE RATE AT WHICH PRINCIPAL PAYMENTS WILL BE MADE ON THE MORTGAGE COLLATERAL.

SEQUOIA MORTGAGE TRUST 201_-_,

a Delaware Statutory Business Trust

Collateralized Mortgage Bonds

CLASS [B-1]

DUE: _____________ ___, _____

ACCRUAL DATE: _____________ ___, _____

ISSUE DATE: _____________ ___, _____

___________ INTEREST RATE

Initial Class Principal CUSIP NO. ______

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Amount of this Bond:

$____________________ CERTIFICATE NUMBER 1

Sequoia Mortgage Trust 201_-_ (the “Issuer”), a statutory business trust formed under the Deposit Trust Agreement dated as of _____________, _____, and having ________________________, a Delaware bank and trust company, as Owner Trustee for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum of [AMOUNT IN WORDS] ($___________) in monthly installments on the ______________ day of each month, commencing on _________ ___, _____ (each, a “Payment Date”), and ending on or before __________ ___, _____ (the “Stated Maturity” of such final installment of principal), and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the Class Principal Amount (as defined in the Indenture) of this Bond from time to time from __________ ___, _____ (the “Accrual Date”), or such later date to which interest has been paid, through the last day of the month preceding the month in which the principal amount of this Bond is paid in full, at a [variable/fixed] rate determined as described below, such interest being payable monthly on each Payment Date. If any Payment Date shall not be a “Business Day” (as defined in the Indenture), payment of the amount due will be made on the next succeeding Business Day.

Installments of principal of this Bond are due and payable as described in the Indenture.

Interest payable on this Bond on a Payment Date will be equal to the amount of interest that has accrued on the Class Principal Balance of this Bond during the one-month period ending on the last day of the month preceding the month in which each such Payment Date occurs (each, an “Interest Accrual Period”).

The principal of, and interest on, this Bond are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Bond shall be applied as set forth in the Indenture. Any installment of principal or interest which is not paid when and as due shall bear interest as described in the Indenture.

Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Bond shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

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IN WITNESS WHEREOF, Sequoia Mortgage Trust 201_-_ has caused this instrument to be duly executed by its duly authorized officer.

Dated:_______________

SEQUOIA MORTGAGE TRUST 201_-_

By:

not in its individual capacity

but solely as Owner Trustee

By:

Title:

CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

,

as Trustee

By:

Authorized Signatory

This Bond is one of a duly authorized issue of Bonds of the Issuer, designated as its Collateralized Mortgage Bonds, Series 201_-_ (herein called the “Bonds”). The Bonds are issuable in one or more classes; the Bonds of particular Classes being herein called the Class [A-1], Class [B-1] and Class [B-2] Bonds, all issued and to be issued under the Issuer’s Indenture dated as of ____________ ___, 201__ between the Issuer and ________________________________ (the “Trustee”, which term includes any successor Trustee under the Indenture), which authorized the Bonds, and reference is hereby made thereto for a statement of the respective rights thereunder of the Issuer, the Trustee and the Holders of the Bonds of each particular Class thereof and the terms upon which the Bonds of each Class are, and are to be, authenticated and delivered.

The Class [A-1] Bonds constitute “Senior Bonds” and the Class [B-1] Bonds and Class [B-2] Bonds constitute “Subordinated Bonds”.

All terms used in this Bond which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

The Bond Interest Rate for the Class [B-1] Bonds (the “Class [B-1] Bond Interest Rate”) and any Interest Accrual Period will equal ________________.

As provided in the Indenture, the Bonds are issuable in Classes which may vary as provided or permitted in the Indenture. Bonds of each Class are equally and ratably secured by the collateral pledged as security therefor to the extent provided by the Indenture.

95

For each Payment Date, the aggregate amount of each installment of principal due and payable on the Class [B-1] Bonds will be equal to the Class [B-1] Principal Payment Amount for such Payment Date. The Class [B-1] Principal Payment Amount for any Payment Date is equal to the sum of (i) the Class [B-1] Percentage of the sum of (a) the principal portion of the Scheduled Payment due on each Pledged Mortgage [on the related Due Date], (b) the principal portion of the purchase price of each Pledged Mortgage that was purchased by [__________]or another person pursuant to the Mortgage Loan Purchase Agreement [or by the Master Servicer in connection with any optional purchase by the Master Servicer of a defaulted Pledged Mortgage] as of such Payment Date, (c) the Substitution Adjustment Amount in connection with any Deleted Pledged Mortgage received with respect to such Payment Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of principal of Pledged Mortgages that are not yet Liquidated Pledged Mortgages received during the [calendar month] preceding the month of such Payment Date, (e) with respect to each Pledged Mortgage that became a Liquidated Pledged Mortgage during the [calendar month] preceding the month of such Payment Date, the Stated Principal Balance of such Pledged Mortgage and (f) all partial and full principal prepayments by borrowers received during the related Prepayment Period and (ii) any Class [B-1] Principal Carryover Shortfall.

Payments of principal or interest, if any, on the Bonds will be made on each Payment Date, commencing on __________ ___, 201__, in the manner and in accordance with the priorities for the Bonds provided in the Indenture.

The entire unpaid principal amount of each Class of Bonds shall be due and payable, if not then previously paid, on the Stated Maturity of the final installment of principal of such Class.

All payments of principal of, and interest on, the Bonds shall be made only from the Trust Estate Granted as security for the Bonds and any other assets of the Issuer that have not been Granted as security for any other bonds or obligations of the Issuer, and each Holder hereof, by its acceptance of this Bond, agrees that it will have recourse solely against such Trust Estate and such other assets of the Issuer and that neither Wilmington Trust Company in its individual capacity, any holder of a beneficial interest in the Issuer nor any of their respective shareholders, partners, beneficiaries, agents, officers, directors, employees, successors or assigns shall be personally liable for any amounts payable, or performance due, under this Bond or the Indenture.

Payment of the then remaining unpaid principal amount of this Bond on the Stated Maturity of its final installment of principal or on such earlier date as the Issuer shall be required to pay the then remaining unpaid principal amount of this Bond or payment of the Redemption Price payable on any date as of which this Bond has been called for redemption in full, shall be made upon presentation of this Bond to the office or agency of the Issuer maintained for such purpose. Payments of interest on this Bond due and payable on each Payment Date or on any Optional Redemption Date, to the extent this Bond is not being paid in full, together with any installment of principal of this Bond due and payable on each Payment Date or the Optional Redemption Date, to the extent not in full payment of this Bond, shall be made by check mailed to the Person whose name appears as the registered Holder of this Bond (or one or more Predecessor Bonds) on the Bond Register as of the last day of the month preceding the month in which such Payment Date occurs (each a “Record Date”).

Checks for amounts which include installments of principal due on this Bond shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Bond Register as of the applicable Record Date without requiring that this Bond be submitted for notation of payment and checks returned undelivered will be held for payment to the Person entitled thereto, subject to the terms of the Indenture, at the office or agency in the United States of America designated by the Issuer for such purpose pursuant to the Indenture. Any reduction in the principal amount of this Bond (or any one or more Predecessor Bonds) effected by any payments made on any Payment Date shall be binding upon all Holders of this Bond and of any Bond issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not noted hereon.

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If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Bond on a Payment Date or Optional Redemption Date which is prior to the Stated Maturity of the final installment of principal hereof, then the Trustee, on behalf of the Issuer, will notify the Person who was the registered Holder hereof on the last day of the month prior to the month in which such Payment Date or optional Redemption Date occurs, and the amount then due and payable shall, if sufficient funds therefor are available, be payable only upon presentation of this Bond to the office or agency of the Issuer maintained for such purpose.

Prior to the payment in full of the Senior Bonds, the failure of the Issuer to pay when and as due any installment of principal of or interest (regardless of the lapse of any grace period) on any Subordinated Bond shall not constitute an Event of Default under the Indenture. In addition, notwithstanding any applicable provision of the Indenture, upon payment in full of the Senior Bonds, the prior occurrence of any such shortfalls attributable to the Subordinated Bonds, which shortfalls have previously been paid in full, will not constitute an Event of Default under the Indenture in respect of the Subordinated Bonds.

If an Event of Default as defined in the Indenture shall occur and be continuing with respect to the Bonds, the Bonds may become or be declared due and payable in the manner and with the effect provided in the Indenture. If any such acceleration of maturity occurs prior to the Stated Maturity of the final installment of principal of this Bond, the amount payable to the Holder of this Bond will be equal to the Class Principal Amount of this Bond on the date this Bond becomes so due and payable, together with accrued interest. Following the acceleration of the maturity of the Bonds, all amounts collected as proceeds of the collateral securing the Bonds or otherwise shall be applied as described in the Indenture. Following such acceleration, interest on any overdue installments of interest on all Bonds shall be payable at the rate set forth in the Indenture.

The Bonds are not prepayable or redeemable at the option or direction of the Issuer except that the Bonds are subject to redemption in whole, but not in part, at the option of the Issuer on any Payment Date on or after the Payment Date on which the sum of (i) the Invested Amount, (ii) the Senior Class Principal Amount, (iii) the Class [B-1] Principal Amount and (iv) the Class [B-2] Principal Amount, after giving effect to payments expected to be made on such Payment Date, is __% or less of the aggregate of the Stated Principal Balances of the Pledged Mortgages as of the Cut- Off Date. Any such redemption at the option of the Issuer shall be at a price equal to 100% of the unpaid principal amount of the Bonds (including, in the case of the Subordinated Bonds, any unpaid Class [B-1] Principal Carryover Shortfall and/or Class [B-2] Principal Carryover Shortfall) so redeemed plus accrued interest through the last day of the month preceding the month in which such optional redemption occurs.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Bond may be registered on the Bond Register of the Issuer, upon surrender of this Bond for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Trustee duly executed by the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Bonds of the same Class, of authorized denominations and in the same aggregate initial principal amount, will be issued to the designated transferee or transferees.

Prior to the due presentment for registration of transfer of this Bond, the Issuer, the Trustee, and any agent of the Issuer shall treat the Person in whose name this Bond is registered (i) on any Record Date, for purposes of making payments, and (ii) on any other date for any other purposes, as the owner hereof, whether or not this Bond be overdue, and neither the Issuer, the Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Bonds under the Indenture at any time by the Issuer with the consent of the Holders of Bonds representing two-thirds of the aggregate Class Principal Amount of the Controlling Class. The Indenture also contains provisions permitting the Holders of Bonds representing specified percentages of the aggregate Class Principal Amount of the Controlling Class on behalf of the Holders of all the Bonds of such Class, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder, at the time of the giving thereof, of this Bond (or any one or more Predecessor Bonds) shall be conclusive and binding upon such Holder and upon all future holders of this Bond and of any Bond issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Bond. The Indenture also permits the Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of the Holders of the Bonds of any Series issued thereunder.

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The Class [B-1] Bonds are “Book Entry Bonds” which will be available to investors only through the book entry facilities of The Depository Trust Company, and bond certificates for all Classes of Bonds will be available only under certain limited circumstances as described in the Indenture.

AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS O F THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

No reference herein to the Indenture and no provision of this Bond or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional to the extent permitted by applicable law, to pay the principal of, and interest on, this Bond at the times, place and rate, and in the coin or currency herein prescribed.

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EXHIBIT IV

FORM OF A CLASS [B-2] BOND

The form of a Class [B-2] Bond is as follows:

PRINCIPAL OF THIS BOND IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE CLASS PRINCIPAL AMOUNT OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE CLASS PRINCIPAL AMOUNT OF THIS BOND MAY BE ASCERTAINED ONLY BY OBTAINING A CONFIRMATION THEREOF FROM THE TRUSTEE UNDER THE INDENTURE REFERRED TO BELOW.

[UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

THIS BOND IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS [B-1] BONDS AND THE SENIOR BONDS AS DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.

THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSE OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT (“OID”) RULES TO THIS BOND. THE ISSUE DATE OF THIS BOND IS _____________, 201__. THE PER ANNUM RATE OF INTEREST ON THIS BOND IS ___% ASSUMING THAT PRINCIPAL PAYMENTS ARE MADE ON THE MORTGAGE COLLATERAL UNDERLYING THE BONDS AT _______% OF THE STANDARD PREPAYMENT ASSUMPTION (AS DEFINED IN THE PROSPECTUS SUPPLEMENT) THIS BOND HAS BEEN ISSUED WITH $ OF OID PER $1,000 OF INITIAL PRINCIPAL AMOUNT, THE YIELD TO MATURITY IS ___% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL SHORT ACCRUAL PERIOD IS $_______ OF OID PER $1,000 OF INITIAL PRINCIPAL AMOUNT, CALCULATED ASSUMING THE YIELD IS ACCRUED DAILY DURING INITIAL SHORT PERIOD. NO REPRESENTATION IS MADE AS TO THE RATE AT WHICH PRINCIPAL PAYMENTS WILL BE MADE ON THE MORTGAGE COLLATERAL.

SEQUOIA MORTGAGE TRUST 201_-_,

a Delaware Statutory Business Trust

Collateralized Mortgage Bonds

CLASS [B-2]

DUE: __________ ___, _____

ACCRUAL DATE: __________ ___, _____

ISSUE DATE: __________ ___, _____

INTEREST RATE

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Initial Class Principal CUSIP NO. ______

Amount of this Bond:

$____________________ CERTIFICATE NUMBER 1

Sequoia Mortgage Trust 201_-_ (the “Issuer”), a statutory business trust formed under the Deposit Trust Agreement dated as of _____________, 201__, and having ________________________, a Delaware bank and trust company, as Owner Trustee for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum of [AMOUNT IN WORDS] ($___________) in monthly installments on the ____________ day of each month, commencing on __________ ___, _____ (each, a “Payment Date”), and ending on or before __________ ___, _____ (the “Stated Maturity” of such final installment of principal), and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the Class Principal Amount (as defined in the Indenture) of this Bond from time to time from __________ ___, _____ (the “Accrual Date”), or such later date to which interest has been paid, through the last day of the month preceding the month in which the principal amount of this Bond is paid in full, at a variable rate determined as described below, such interest being payable monthly on each Payment Date. If any Payment Date shall not be a “Business Day” (as defined in the Indenture), payment of the amount due will be made on the next succeeding Business Day.

Installments of principal of this Bond are due and payable as described in the Indenture.

Interest payable on this Bond on a Payment Date will be equal to the amount of interest that has accrued on the Class Principal Balance of this Bond during the one-month period ending on the last day of the month preceding the month in which each such Payment Date occurs (each, an “Interest Accrual Period”).

The principal of, and interest on, this Bond are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Bond shall be applied as set forth in the Indenture. Any installment of principal or interest which is not paid when and as due shall bear interest as described in the Indenture.

Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Bond shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

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IN WITNESS WHEREOF, Sequoia Mortgage Trust 201_-_ has caused this instrument to be duly executed by its duly authorized officer.

Dated:_______________

SEQUOIA MORTGAGE TRUST 201_-_

By:

not in its individual capacity

but solely as Owner Trustee

By:

Title:

CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

,

as Trustee

By:

Authorized Signatory

This Bond is one of a duly authorized issue of Bonds of the Issuer, designated as its Collateralized Mortgage Bonds, Series 201__-__ (herein called the “Bonds”). The Bonds are issuable in one or more classes; the Bonds of particular Classes being herein called the Class [A-1], Class [B-1] and Class [B-2] Bonds, all issued and to be issued under the Issuer’s Indenture dated as of ____________ ___, _____, between the Issuer and _________________________________ (the “Trustee”, which term includes any successor Trustee under the Indenture), which authorized the Bonds, and reference is hereby made thereto for a statement of the respective rights thereunder of the Issuer, the Trustee and the Holders of the Bonds of each particular Class thereof and the terms upon which the Bonds of each Class are, and are to be, authenticated and delivered.

The Class [A-1] Bonds constitute “Senior Bonds” and the Class [B-1] and Class [B-2] Bonds constitute “Subordinated Bonds”.

All terms used in this Bond which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

The Bond Interest Rate for the Class [B-2] Bonds (the “Class [B-2] Bond Interest Rate”) and any Interest Accrual Period will equal _______________.

As provided in the Indenture, the Bonds are issuable in Classes which may vary as provided or permitted in the Indenture. Bonds of each Class are equally and ratably secured by the collateral pledged as security therefor to the extent provided by the Indenture.

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For each Payment Date, the aggregate amount of each installment of principal due and payable on the Class [B-2] Bonds will be equal to the Class [B-2] Principal Payment Amount for such Payment Date. The Class [B-2] Principal Payment Amount for any Payment Date is equal to the sum of (i) the Class [B-2] Percentage of the sum of (a) the principal portion of the Scheduled Payment due on each Pledged Mortgage [on the related Due Date], (b) the principal portion of the purchase price of each Pledged Mortgage that was purchased by [_________] or another person pursuant to the Mortgage Loan Purchase Agreement [or by the Master Servicer in connection with any optional purchase by the Master Servicer of a defaulted Pledged Mortgage] as of such Payment Date, (c) the Substitution Adjustment Amount in connection with any Deleted Pledged Mortgage received with respect to such Payment Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of principal of Pledged Mortgages that are not yet Liquidated Pledged Mortgages received during the [calendar month] preceding the month of such Payment Date, (e) with respect to each Pledged Mortgage that became a Liquidated Pledged Mortgage during the [calendar month] preceding the month of such Payment Date, the Stated Principal Balance of such Pledged Mortgage and (f) all partial and full principal prepayments by borrowers received during the related Prepayment Period and (ii) any Class [B-2] Principal Carryover Shortfall.

Payments of principal or interest, if any, on the Bonds will be made on each Payment Date, commencing on _____________ __, 201_, in the manner and in accordance with the priorities for the Bonds provided in the Indenture.

The entire unpaid principal amount of each Class of Bonds shall be due and payable, if not then previously paid, on the Stated Maturity of the final installment of principal of such Class.

All payments of principal of, and interest on, the Bonds shall be made only from the Trust Estate Granted as security for the Bonds and any other assets of the Issuer that have not been Granted as security for any other bonds or obligations of the Issuer, and each Holder hereof, by its acceptance of this Bond, agrees that it will have recourse solely against such Trust Estate and such other assets of the Issuer and that neither Wilmington Trust Company in its individual capacity, any holder of a beneficial interest in the Issuer nor any of their respective shareholders, partners, beneficiaries, agents, officers, directors, employees, successors or assigns shall be personally liable for any amounts payable, or performance due, under this Bond or the Indenture.

Payment of the then remaining unpaid principal amount of this Bond on the Stated Maturity of its final installment of principal or on such earlier date as the Issuer shall be required to pay the then remaining unpaid principal amount of this Bond or payment of the Redemption Price payable on any date as of which this Bond has been called for redemption in full, shall be made upon presentation of this Bond to the office or agency of the Issuer maintained for such purpose. Payments of interest on this Bond due and payable on each Payment Date or on any Optional Redemption Date, to the extent this Bond is not being paid in full, together with any installment of principal of this Bond due and payable on each Payment Date or the Optional Redemption Date, to the extent not in full payment of this Bond, shall be made by check mailed to the Person whose name appears as the registered Holder of this Bond (or one or more Predecessor Bonds) on the Bond Register as of the last day of the month preceding the month in which such Payment Date occurs (each a “Record Date”).

Checks for amounts which include installments of principal due on this Bond shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Bond Register as of the applicable Record Date without requiring that this Bond be submitted for notation of payment and checks returned undelivered will be held for payment to the Person entitled thereto, subject to the terms of the Indenture, at the office or agency in the United States of America designated by the Issuer for such purpose pursuant to the Indenture. Any reduction in the principal amount of this Bond (or any one or more Predecessor Bonds) effected by any payments made on any Payment Date shall be binding upon all Holders of this Bond and of any Bond issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not noted hereon.

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If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Bond on a Payment Date or Optional Redemption Date which is prior to the Stated Maturity of the final installment of principal hereof, then the Trustee, on behalf of the Issuer, will notify the Person who was the registered Holder hereof on the last day of the month prior to the month in which such Payment Date or optional Redemption Date occurs, and the amount then due and payable shall, if sufficient funds therefor are available, be payable only upon presentation of this Bond to the office or agency of the Issuer maintained for such purpose.

Prior to the payment in full of the Senior Bonds, the failure of the Issuer to pay when and as due any installment of principal of or interest (regardless of the lapse of any grace period) on any Subordinated Bond shall not constitute an Event of Default under the Indenture. In addition, notwithstanding any applicable provision of the Indenture, upon payment in full of the Senior Bonds, the prior occurrence of any such shortfalls attributable to the Subordinated Bonds, which shortfalls have previously been paid in full, will not constitute an Event of Default under the Indenture in respect of the Subordinated Bonds.

If an Event of Default as defined in the Indenture shall occur and be continuing with respect to the Bonds, the Bonds may become or be declared due and payable in the manner and with the effect provided in the Indenture. If any such acceleration of maturity occurs prior to the Stated Maturity of the final installment of principal of this Bond, the amount payable to the Holder of this Bond will be equal to the Class Principal Amount of this Bond on the date this Bond becomes so due and payable, together with accrued interest. Following the acceleration of the maturity of the Bonds, all amounts collected as proceeds of the collateral securing the Bonds or otherwise shall be applied as described in the Indenture. Following such acceleration, interest on any overdue installments of interest on all Bonds shall be payable at the rate set forth in the Indenture.

The Bonds are not prepayable or redeemable at the option or direction of the Issuer except that the Bonds are subject to redemption in whole, but not in part, at the option of the Issuer on any Payment Date on or after the Payment Date on which the sum of (i) the Invested Amount, (ii) the Senior Class Principal Amount and (iii) the Subordinated Class Principal Amount, after giving effect to payments expected to be made on such Payment Date, is __% or less of the aggregate of the Stated Principal Balances of the Pledged Mortgages as of the Cut-Off Date. Any such redemption at the option of the Issuer shall be at a price equal to 100% of the unpaid principal amount of the Bonds (including, in the case of the Subordinated Bonds, any unpaid Class [B-1] Principal Carryover Shortfall and/or Class [B-2] Principal Carryover Shortfall) so redeemed plus accrued interest through the last day of the month preceding the month in which such optional redemption occurs.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Bond may be registered on the Bond Register of the Issuer, upon surrender of this Bond for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Trustee duly executed by the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Bonds of the same Class, of authorized denominations and in the same aggregate initial principal amount, will be issued to the designated transferee or transferees.

Prior to the due presentment for registration of transfer of this Bond, the Issuer, the Trustee, and any agent of the Issuer shall treat the Person in whose name this Bond is registered (i) on any Record Date, for purposes of making payments, and (ii) on any other date for any other purposes, as the owner hereof, whether or not this Bond be overdue, and neither the Issuer, the Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Bonds under the Indenture at any time by the Issuer with the consent of the Holders of Bonds representing two-thirds of the aggregate Class Principal Amount of the Controlling Class. The Indenture also contains provisions permitting the Holders of Bonds representing specified percentages of the aggregate Class Principal Amount of the Controlling Class on behalf of the Holders of all the Bonds such Class, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder, at the time of the giving thereof, of this Bond (or any one or more Predecessor Bonds) shall be conclusive and binding upon such Holder and upon all future holders of this Bond and of any Bond issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Bond. The Indenture also permits the Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of the Holders of the Bonds of any Series issued thereunder.

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[The Subordinated Bonds are “Book Entry Bonds” which will be available to investors only through the book entry facilities of The Depository Trust Company, and bond certificates for all Classes of Bonds will be available only under certain limited circumstances as described in the Indenture.]

AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

No reference herein to the Indenture and no provision of this Bond or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional to the extent permitted by applicable law, to pay the principal of, and interest on, this Bond at the times, place and rate, and in the coin or currency herein prescribed.

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105

EXHIBIT V

FORM OF BOND INSURANCE POLICY

EXHIBIT VI

FORM OF CERTIFICATION TO BE PROVIDED TO MANAGER BY THE TRUSTEE

Sequoia Mortgage Trust 201_-_ (the “Trust”)

Mortgage Pass-Through Certificates

I, ____________________, a ______________ of [__________________________], as Trustee of the Trust, hereby certify to [_______________________] (the “Depositor”) and its officers, directions and affiliates, and with the knowledge and intent that they will rely upon this certification, that:

1. I have reviewed the monthly distribution reports that will be covered by the Depositor’s Form 10-K for the Trust’s fiscal year ending on [ ]

2. Based on my knowledge, the information in these distribution reports prepared by the Trustee, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the last day of the period covered by that annual report.

3. Based on my knowledge, the distribution information required to be provided by the Trustee under the Indenture, dated as of [___________], 201_, among the Trust, and [______________], as Trustee is included in these reports.

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[SIGNATURE PAGE IMMEDIATELY FOLLOWS]

[_________________________],

as Trustee

Dated: _________________ By:

Name:

Title:

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EXHIBIT VII

SERVICING CRITERIA

The assessments of compliance to be delivered by the Master Servicer pursuant to the Master Servicing Agreement and by the Trustee pursuant to this Agreement shall address, at a minimum, the criteria identified as below as “Applicable Servicing Criteria” with respect to such party:

Where there are multiple checks for criteria the attesting party will identify in their management assertion that they are attesting only to the portion of the distribution chain they are responsible for in the related transaction agreements.

Regulation AB Reference	Servicing Criteria General Servicing Considerations	Servicers	Master Servicer	Trustee
1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.	X	X	X
1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.	X	X
1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for the Pool Assets are maintained.
1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.	X	X

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	Cash Collection and Administration
1122(d)(2)(i)	Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements.	X	X	X
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	X	X	X
1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.	X	X
1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of over collateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.	X	X	X
1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.	X	X	X
1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.	X

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1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.	X	X	X
	Investor Remittances and Reporting
1122(d)(3)(i)	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of Pool Assets serviced by the Servicer.	X	X	X

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1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	X	X	X
1122(d)(3)(iii)	Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.	X	X	X
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	X	X	X
	Pool Asset Administration
1122(d)(4)(i)	Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents.	X
1122(d)(4)(ii)	Pool assets  and related documents are safeguarded as required by the transaction agreements	X
1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.	X
1122(d)(4)(iv)	Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents.	X
1122(d)(4)(v)	The Servicer’s records regarding the pool assets agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.	X

111

1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor’s pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.	X
1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.	X
1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period a pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).	X
1122(d)(4)(ix)	Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents.	X

112

1122(d)(4)(x)	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related pool assets, or such other number of days specified in the transaction agreements.	X
1122(d)(4)(xi)	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.	X
1122(d)(4)(xii)	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the Servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.	X
1122(d)(4)(xiii)	Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements.	X
1122(d)(4)(xiv)	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.	X	X
1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.

113

[NAME OF COMPANY]

By:
Name: ________________________________
Title: ________________________________

Date: _________________________

114

EXHIBIT VIII

ADDITIONAL FORM 10-D DISCLOSURE

Item on Form 10-D	Party Responsible
Item 1: Distribution and Pool Performance Information Any information required by 1121 which is NOT included on the Monthly Statement	[_________________]
Item 2: Legal Proceedings per Item 1117 of Reg AB	[_________________]
Item 3:  Sale of Securities and Use of Proceeds	[_________________]
Item 4:  Defaults Upon Senior Securities	[_________________]
Item 5:  Submission of Matters to a Vote of Security Holders	[_________________]
Item 6:  Significant Obligors of Pool Assets	[_________________]
Item 7:  Significant Enhancement Provider Information	[_________________]
Item 8:  Other Information	[_________________]
Item 9:  Exhibits	[_________________]
	[_________________]

115

EXHIBIT IX

ADDITIONAL FORM 10-K DISCLOSURE

Item on Form 10-K	Party Responsible
Item 1B: Unresolved Staff Comments	[_________________]
Item 9B:  Other Information	[_________________]
Item 15:  Exhibits, Financial Statement Schedules	[_________________]
Additional Item: Disclosure per Item 1117 of Reg AB	[_________________]
Additional Item: Disclosure per Item 1119 of Reg AB	[_________________]
Additional Item: Disclosure per Item 1112(b) of Reg AB	[_________________]
Additional Item: Disclosure per Items 1114(b) and 1115(b) of Reg AB	[_________________]

116

EXHIBIT X

FORM 8-K DISCLOSURE INFORMATION

Item on Form 8-K	Party Responsible
Item 1.01- Entry into a Material Definitive Agreement	[_________________]
Item 1.02- Termination of a Material Definitive Agreement	[_________________]
Item 1.03- Bankruptcy or Receivership	[_________________]
Item 2.04- Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement	[_________________]
Item 3.03- Material Modification to Rights of Security Holders	[_________________]
Item 5.03- Amendments of Articles of Incorporation or Bylaws; Change of Fiscal Year	[_________________]
Item 6.01- ABS Informational and Computational Material	[_________________]
Item 6.02- Change of Servicer or Trust Administrator	[_________________]
Item 6.03- Change in Credit Enhancement or External Support	[_________________]
Item 6.04- Failure to Make a Required Distribution	[_________________]
Item 6.05- Securities Act Updating Disclosure	[_________________]
Item 7.01- Reg FD Disclosure	[_________________]
Item 8.01	[_________________]
Item 9.01	[_________________]

117

EX-4.4

Exhibit 4.4

SEQUOIA RESIDENTIAL FUNDING, INC.
Depositor

[                                        ]
Master Servicer and Securities Administrator

and

[                                        ]

Trustee

___________________________

POOLING AND SERVICING AGREEMENT

Dated as of __________ __, 20__

___________________________

SEQUOIA MORTGAGE TRUST 20__-_

Table of Contents

		Page
ARTICLE I DEFINITIONS		7
Section 1.01.	Definitions	7
Section 1.02.	Calculations Respecting Mortgage Loans	39
ARTICLE II DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES		40
Section 2.01.	Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans	40
Section 2.02.	Acceptance of Trust Fund by Trustee; Review of Documentation for Trust Fund	43
Section 2.03.	Representations and Warranties of the Depositor	44
Section 2.04.	Discovery of Breach; Repurchase or Substitution of Mortgage Loans	46
Section 2.05.	[Reserved]	48
Section 2.06.	Grant Clause	48
ARTICLE III THE CERTIFICATES		50
Section 3.01.	The Certificates	50
Section 3.02.	Registration	50
Section 3.03.	Transfer and Exchange of Certificates	51
Section 3.04.	Cancellation of Certificates	55
Section 3.05.	Replacement of Certificates	55
Section 3.06.	Persons Deemed Owners	56
Section 3.07.	Temporary Certificates	56
Section 3.08.	Appointment of Paying Agent	56
Section 3.09.	Book-Entry Certificates	57
ARTICLE IV ADMINISTRATION OF THE TRUST FUND		58
Section 4.01.	Collection Accounts; Distribution Account	58
Section 4.02	Reports to Trustee and Certificateholders	59
Section 4.03	Rule 17g-5 Compliance	62
Section 4.04.	Rule 15Ga-1 Compliance	64
ARTICLE V DISTRIBUTIONS TO HOLDERS OF CERTIFICATES		64
Section 5.01.	Distributions Generally	64
Section 5.02.	Distributions from the Distribution Account	65
Section 5.03.	Allocation of Losses	69
Section 5.04.	Advances by Master Servicer	70
Section 5.05.	Compensating Interest Payments	70
Section 5.06.	Reserve Fund	70

i

ARTICLE VI CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR; EVENTS OF DEFAULT		71
Section 6.01.	Duties of Trustee and the Securities Administrator	71
Section 6.02.	Certain Matters Affecting the Trustee and the Securities Administrator	74
Section 6.03.	Trustee and Securities Administrator Not Liable for Certificates	76
Section 6.04.	Trustee and the Securities Administrator May Own Certificates	76
Section 6.05.	Eligibility Requirements for Trustee and Securities Administrator	76
Section 6.06.	Resignation and Removal of Trustee and the Securities Administrator	77
Section 6.07.	Successor Trustee and Successor Securities Administrator	78
Section 6.08.	Merger or Consolidation of Trustee or the Securities Administrator	79
Section 6.09.	Appointment of Co-Trustee, Separate Trustee or Custodian	79
Section 6.10.	Authenticating Agents	81
Section 6.11.	Indemnification of the Trustee and the Securities Administrator	82
Section 6.12.	Fees and Expenses of Securities Administrator and the Trustee	82
Section 6.13.	Collection of Monies	83
Section 6.14.	Events of Default; Trustee To Act; Appointment of Successor	83
Section 6.15.	Additional Remedies of Trustee Upon Event of Default	87
Section 6.16.	Waiver of Defaults	87
Section 6.17.	Notification to Holders	87
Section 6.18.	Directions by Certificateholders and Duties of Trustee During Event of Default	87
Section 6.19.	[Reserved]	88
Section 6.20.	Preparation of Tax Returns and Other Reports	88
Section 6.21.	Reporting to the Commission	89
Section 6.22.	Annual Statements of Compliance	95
Section 6.23.	Annual Assessments of Compliance	96
Section 6.24.	Accountant’s Attestation	97
ARTICLE VII PURCHASE OF MORTGAGE LOANS AND TERMINATION OF THE TRUST FUND		98
Section 7.01.	Purchase of Mortgage Loans; Termination of Trust Fund Upon Purchase or Liquidation of All Mortgage Loans	98
Section 7.02.	Procedure Upon Redemption and Termination of Trust Fund.	99
Section 7.03.	Additional Trust Fund Termination Requirements	100
ARTICLE VIII RIGHTS OF CERTIFICATEHOLDERS		101
Section 8.01.	Limitation on Rights of Holders	101
Section 8.02.	Access to List of Holders	102
Section 8.03.	Acts of Holders of Certificates	102

ii

ARTICLE IX ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY THE MASTER SERVICER		103
Section 9.01.	Duties of the Master Servicer; Enforcement of Servicer's and Master Servicer's Obligations	103
Section 9.02	Assumption of Master Servicing by Trustee	106
Section 9.03.	Representations and Warranties of the Master Servicer	106
Section 9.04.	Compensation to the Master Servicer	108
Section 9.05.	Merger or Consolidation	108
Section 9.06.	Resignation of Master Servicer	109
Section 9.07.	Assignment or Delegation of Duties by the Master Servicer	109
Section 9.08.	Limitation on Liability of the Master Servicer and Others	109
Section 9.09.	Indemnification; Third-Party Claims	110
Section 9.10.	Master Servicer Fidelity Bond and Master Servicer Errors and Omissions Insurance Policy	110
ARTICLE X REMIC ADMINISTRATION		111
Section 10.01.	REMIC Administration	111
Section 10.02.	Prohibited Transactions and Activities	113
Section 10.03.	Indemnification with Respect to Prohibited Transactions or Loss of REMIC Status	114
Section 10.04.	REO Property	114
ARTICLE XI MISCELLANEOUS PROVISIONS		115
Section 11.01.	Binding Nature of Agreement; Assignment	115
Section 11.02.	Entire Agreement	115
Section 11.03.	Amendment	115
Section 11.04.	Voting Rights	116
Section 11.05.	Provision of Information	117
Section 11.06.	Governing Law	117
Section 11.07.	Notices	117
Section 11.08.	Severability of Provisions	118
Section 11.09.	Indulgences; No Waivers	118
Section 11.10.	Headings Not To Affect Interpretation	118
Section 11.11.	Benefits of Agreement	118
Section 11.12.	Special Notices to the Rating Agencies	118
Section 11.13.	Conflicts	120
Section 11.14.	Counterparts	120
Section 11.15	No Petitions	120
Section 11.16	Intention of the Parties and Interpretation; Indemnification	120

iii

ATTACHMENTS

Exhibit A	Forms of Certificates
Exhibit B	Form of Residual Certificate Transfer Affidavit (Transferee)
Exhibit C	Form of Residual Certificate Transfer Affidavit (Transferor)
Exhibit D	Form of Custodial Agreement
Exhibit E-1	Form of Rule 144A Transfer Certificate
Exhibit E-2	Form of Purchaser’s Letter for Qualified Institutional Buyer
Exhibit F	Form of Purchaser’s Letter for Qualified Accredited Investor
Exhibit G	Form of ERISA Transfer Affidavit
Exhibit H-1	List of Purchase Agreements
Exhibit H-2	List of Servicing Agreements
Exhibit I	Additional Disclosure Notification
Exhibit J	Back-Up Certificate to Form 10-K Certificate
Exhibit K	Servicing Criteria to Be Addressed in Assessment of Compliance
Exhibit L	Additional Form 10-D Disclosure
Exhibit M	Additional Form 10-K Disclosure
Exhibit N	Additional Form 8-K Disclosure
Exhibit O	Form of Certification for NRSROs and Depositor
Schedule A	Mortgage Loan Schedule

iv

This POOLING AND SERVICING AGREEMENT, dated as of ____________ __, 20__ (the “Agreement”), by and among SEQUOIA RESIDENTIAL FUNDING, INC., a Delaware corporation, as depositor (the “Depositor”), [                            ], a national banking association, as trustee (the “Trustee”), and [                     ], in its dual capacities as master servicer (the “Master Servicer”) and securities administrator (the “Securities Administrator”) and acknowledged by RWT HOLDINGS, INC., a Delaware corporation, as seller (the “Seller”), for purposes of Sections 2.04, 7.01(b) and 9.01(d).

PRELIMINARY STATEMENT

The Depositor has acquired the Mortgage Loans from the Seller and at the Closing Date is the owner of the Mortgage Loans and related property being conveyed by the Depositor to the Trustee hereunder for inclusion in the Trust Fund. On the Closing Date, the Depositor will acquire the Certificates from the Trustee as consideration for the Depositor’s transfer to the Trust Fund of the Mortgage Loans, and the other property constituting the Trust Fund. The Depositor has duly authorized the execution and delivery of this Agreement to provide for the conveyance to the Trustee of the Mortgage Loans and the related property constituting the Trust Fund. All covenants and agreements made by the Seller in the Mortgage Loan Purchase and Sale Agreement and in this Agreement and by the Depositor, the Master Servicer, the Securities Administrator and the Trustee herein, with respect to the Mortgage Loans and the other property constituting the Trust Fund, are for the benefit of the Holders from time to time of the Certificates. The Depositor, the Trustee, the Master Servicer and the Securities Administrator are entering into this Agreement, and the Trustee is accepting the Trust Fund created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

As provided herein, the Securities Administrator shall elect that the Trust Fund (exclusive of the Additional Collateral and the assets deposited in the Reserve Fund (the “Excluded Trust Property”) be treated for federal income tax purposes as comprising three real estate mortgage investment conduits (each, a “REMIC” or, in the alternative, the “Lower-Tier REMIC,” the “Middle-Tier REMIC,” and the “Upper-Tier REMIC,” respectively). Each Certificate, other than the Class 1-AR Certificate and the Class LT-R Certificate, is hereby designated as a regular interest in the Upper-Tier REMIC, as described herein. In addition, each of the LIBOR Certificates represents the right to receive payments in respect of Net WAC Shortfalls from the Reserve Fund as provided in Sections 5.02 and 5.06. The owners of the Interest-Only Certificates beneficially own the Reserve Fund. The Class 1-AR Certificate represents the sole class of residual interest in each of the Upper-Tier and Middle-Tier REMICs.

The Class LT-R Certificate evidences ownership of the sole class of residual interest in the Lower-Tier REMIC (the “LT-R Interest”). The Lower-Tier REMIC shall hold as its assets all property of the Trust Fund, other than the Excluded Trust Property and other than the interests in any REMIC formed hereby. Each Lower-Tier Interest other than the LT-R Interest is hereby designated as a regular interest in the Lower-Tier REMIC and the LT-R Interest is hereby designated as the sole Class of residual interest in the Lower-Tier REMIC. The Middle-Tier REMIC shall hold as its assets the Lower-Tier Interests other than the LT-R Interest. Each Middle-Tier Interest other than the MT-R Interest is hereby designated as a regular interest in the Middle-Tier REMIC and the MT-R Interest is hereby designated as the sole Class of residual interest in the Middle-Tier REMIC. The Upper-Tier REMIC shall hold as its assets the Middle-Tier Interests other than the MT-R Interest.

The Lower-Tier REMIC Interests

The following table sets forth (or describes) the Class designation, interest rate, and initial Class Principal Amount for each Class of Lower-Tier Interests:

Lower-Tier REMIC Interest Designation	Interest Rate	Initial Class Principal Amount	Corresponding Pool or Corresponding Class of Certificates
LT-Pool 1	(1)	(7)	1
LT-Pool 1 PSA	(1)	(8)	1
LT-Pool 2	(2)	(7)	2
LT-Pool 2 PSA	(2)	(8)	2
LT-Pool 3	(3)	(7)	3
LT-Pool 3 PSA	(3)	(8)	3
LT-Pool 4	(4)	(7)	4
LT-Pool 4 PSA	(4)	(8)	4
LT-Pool 5	(5)	(7)	5
LT-Pool 5 PSA	(5)	(8)	5
LT-R	(6)	(6)	Class LT-R

__________________

(1) The interest rate with respect to any Distribution Date (and the related Accrual Period) for each of these Lower-Tier Interests will be a per annum rate equal to the Pool 1 Net WAC.

(2) The interest rate with respect to any Distribution Date (and the related Accrual Period) for each of these Lower-Tier Interests will be a per annum rate equal to the Pool 2 Net WAC.

(3) The interest rate with respect to any Distribution Date (and the related Accrual Period) for each of these Lower-Tier Interests will be a per annum rate equal to the Pool 3 Net WAC.

(4) The interest rate with respect to any Distribution Date (and the related Accrual Period) for each of these Lower-Tier Interests will be a per annum rate equal to the Pool 4 Net WAC.

(5) The interest rate with respect to any Distribution Date (and the related Accrual Period) for each of these Lower-Tier Interests will be a per annum rate equal to the Pool 5 Net WAC.

(6) The LT-R Interest is the sole class of residual interest in the Lower-Tier REMIC. It does not have a principal balance and does not bear interest.

(7) The Class Principal Amount with respect to any Distribution Date (and the related Accrual Period) for each of these Lower-Tier Interests will be an amount equal to the excess of (i) the Aggregate Stated Principal Balance of the Corresponding Pool over (ii) the Class Principal Amount of the Lower Tier Interest having “PSA” in its designation that corresponds to the same Mortgage Pool.

(8) The Class Principal Amount with respect to any Distribution Date (and the related Accrual Period) for each of these Lower-Tier Interests will be an amount equal to one percent of the Pool Subordinate Amount of the Corresponding Pool.

On each Distribution Date, the Available Distribution Amount distributable as interest shall be distributed as interest with respect to the Lower-Tier Interests based on the interest rates described above. On each Distribution Date, Interest Shortfalls shall be allocated among the related Lower-Tier Interests based on the relative amounts of interest otherwise accrued for the related Accrual Period on each such Lower-Tier Interest.

2

On each Distribution Date, the remaining Available Distribution Amount shall be distributed as principal on the Lower-Tier Interests as follows:

(1) first, from the remaining Available Distribution Amount for Pool 1, to the LT-Pool 1 PSA Interest until its Class Principal Amount equals one percent of the Pool Subordinate Amount for Pool 1 after such Distribution Date;

(2) second, from the remaining Available Distribution Amount for Pool 2, to the LT-Pool 2 PSA Interest until its Class Principal Amount equals one percent of the Pool Subordinate Amount for Pool 2 after such Distribution Date;

(3) third, from the remaining Available Distribution Amount for Pool 3, to the LT-Pool 3 PSA Interest until its Class Principal Amount equals one percent of the Pool Subordinate Amount for Pool 3 after such Distribution Date;

(4) fourth, from the remaining Available Distribution Amount for Pool 4, to the LT-Pool 4 PSA Interest until its Class Principal Amount equals one percent of the Pool Subordinate Amount for Pool 4 after such Distribution Date;

(5) fifth, from the remaining Available Distribution Amount for Pool 5, to the LT-Pool 5 PSA Interest until its Class Principal Amount equals one percent of the Pool Subordinate Amount for Pool 5 after such Distribution Date;

(6) sixth, to the LT-Pool 1 PSA, LT-Pool 2 PSA, LT-Pool 3 PSA, LT-Pool 4 PSA or LT-Pool 5 PSA Interest, from the remaining Available Distribution Amount, the minimum amount necessary to cause the ratio of the Class Principal Amount of each such Lower-Tier REMIC Interest to the sum of the Class Principal Amounts of the other four such Lower-Tier REMIC Interests to equal the ratio of the Pool Subordinate Amount related to such interest to the sum of the Pool Subordinate Amounts related to the other four Lower-Tier REMIC Interests immediately after such Distribution Date;

(7) seventh, from the remaining Available Distribution Amount for Pool 1, to the LT-Pool 1 Interest, until its Class Principal Amount is reduced to zero;

(8) eighth, from the remaining Available Distribution Amount for Pool 2, to the LT-Pool 2 Interest, until its Class Principal Amount is reduced to zero;

(9) ninth, from the remaining Available Distribution Amount for Pool 3, to the LT-Pool 3 Interest, until its Class Principal Amount is reduced to zero;

(10) tenth, from the remaining Available Distribution Amount for Pool 4, to the LT-Pool 4 Interest, until its Class Principal Amount is reduced to zero;

(11) eleventh, from the remaining Available Distribution Amount for Pool 5, to the LT-Pool 5 Interest, until its Class Principal Amount is reduced to zero; and

3

(12) finally, to the Class LT-R Interest, any remaining amounts (including any and all remaining amounts representing net gain, if any, from the sale of any REO Properties at a price in excess of the foreclosed balance of the related Mortgage Loan or other Liquidation Proceeds realized).

The Middle-Tier REMIC Interests

The following table sets forth (or describes) the Class designation, interest rate, and initial Class Principal Amount for each Class of Middle-Tier Interests:

Middle-Tier REMIC Interest Designation	Interest Rate	Initial Class Principal Amount	Corresponding Class of Certificate(s)
MT-1A1	(1)	(3)	1-A1, 1-AR, 1-XA
MT-1A2	(1)	(3)	1-A2, 1-XA
MT-2A1	(2)	(3)	2-A1
MT-2A2	(2)	(3)	2-A2
MT-3A1	(2)	(3)	3-A1
MT-3A2	(2)	(3)	3-A2
MT-4A1	(2)	(3)	4-A1
MT-4A2	(2)	(3)	4-A2
MT-5A1	(2)	(3)	5-A1
MT-5A2	(2)	(3)	5-A2
MT-B1	(2)	(3)	1-B1
MT-B2	(2)	(3)	1-B2
MT-B3	(2)	(3)	1-B3
MT-B4	(2)	(3)	1-B4
MT-B5	(2)	(3)	1-B5
MT-B6	(2)	(3)	1-B6
MT-R	(4)	(4)	N/A

__________________

(1) The interest rate with respect to any Distribution Date (and the related Accrual Period) for this Lower-Tier Interest will be a per annum rate equal to the Pool 1 Net WAC.

(2) The interest rate with respect to any Distribution Date (and the related Accrual Period) for this Middle-Tier Interest will be a per annum rate equal to the rate on its Corresponding Class of Certificates.

(3) This interest shall have an initial class principal amount equal to the aggregate Initial Class Principal Amount of its Corresponding Class(es) of Certificates (other than any interest-only certificates).

(4) The MT-R Interest is the sole class of residual interest in the Middle-Tier REMIC. It does not have a principal balance and does not bear interest.

On each Distribution Date, the Available Distribution Amount distributable as interest shall be distributed as interest with respect to the Middle-Tier Interests based on the interest rates described above. On each Distribution Date, Interest Shortfalls shall be allocated among the related Middle-Tier Interests based on the relative amounts of interest otherwise accrued for the related Accrual Period on each such Middle-Tier Interest.

4

On each Distribution Date, the remaining Available Distribution Amount distributable to with respect principal shall be distributed to the Middle-Tier Interests as follows:

(i) first, to the Middle-Tier Interests with the letter “A” in their designation, pro rata, until their Class Principal Amounts equal the sum of the Class Principal Amounts of their Corresponding Class(es) of Certificates (other than any interest-only certificates);

(ii) second, to the MT-1B1 Interest until its Class Principal Amount equals the Class Principal Amount of the Class B1 Certificate;

(iii) third, to the MT-1B2 Interest until its Class Principal Amount equals the Class Principal Amount of the Class B2 Certificate;

(iv) fourth, to the MT-1B3 Interest until its Class Principal Amount equals the Class Principal Amount of the Class B3 Certificate;

(v) fifth, to the MT-1B4 Interest until its Class Principal Amount equals the Class Principal Amount of the Class B4 Certificate;

(vi) sixth, to the MT-1B5 Interest until its Class Principal Amount equals the Class Principal Amount of the Class B5 Certificate;

(vii) seventh, to the MT-1B6 Interest until its Class Principal Amount equals the Class Principal Amount of the Class B6 Certificate; and

(viii) finally, to the MTR Interest, any remaining amounts.

The Certificates and the Upper-Tier REMIC

The following table sets forth (or describes) the Class designation, Certificate Interest Rate, initial Class Principal Amount (or initial Class Notional Amount) and minimum denomination for each Class of Certificates comprising interests in the Trust Fund created hereunder.

5

Class Designation	Certificate Interest Rate	Initial Class Class Principal Amount	Minimum Denominations or Percentage Interest
Class 1-A1	(1)	$	$
Class 1-A2	(2)	$	$
Class 1-AR	(3)	$	100%
Class 1-XA	(4)	(5)	100%
Class 2-A1	(6)	$	$
Class 2-A2	(6)	$	$
Class 3-A1	(7)	$	$
Class 3-A2	(7)	$	$
Class 4-A1	(8)	$	$
Class 4-A2	(8)	$	$
Class 5-A1	(9)	$	$
Class 5-A2	(9)	$	$
Class B-1	(10)	$	$
Class B-2	(10)	$	$
Class B-3	(10)	$	$
Class B-4	(10)	$	$
Class B-5	(10)	$	$
Class B-6	(10)	$	$
Class LT-R	(11)	(11)	100%

(1) The Certificate Interest Rate with respect to any Distribution Date (and the related Accrual Period) for the Class 1-A1 Certificates is the per annum rate equal to the least of (i) One-Month LIBOR plus 0.[__] %, (ii) the Pool 1 Net WAC and (iii) [     ]%; provided, however, that if the Holder of the Class LT-R Certificate does not exercise the option to redeem the Certificates on or prior to the Group 1 Step-Up Date, then the per annum rate calculated pursuant to clause (i) above with respect to the Class 1-A1 Certificates will be One-Month LIBOR plus [   ]% on the Distribution Date immediately following the Group 1 Step-Up Date and for all Distribution Dates thereafter.

(2) The Certificate Interest Rate with respect to any Distribution Date (and the related Accrual Period) for the Class 1-A2 Certificates is the per annum rate equal to the least of (i) One-Month LIBOR plus [   ]%, (ii) the Pool 1 Net WAC and (iii) [   ]%; provided, however, that if the Holder of the Class LT-R Certificate does not exercise the option to redeem the Certificates on or prior to the Group 1 Step-Up Date, then the per annum rate calculated pursuant to clause (i) above with respect to the Class 1-A2 Certificates will be One-Month LIBOR plus [   ]% on the Distribution Date immediately following the Group 1 Step-Up Date and for all Distribution Dates thereafter.

(3) The Certificate Interest Rate with respect to any Distribution Date (and the related Accrual Period) for the Class 1-AR Certificates will equal the Pool 1 Net WAC.

(4) The Certificate Interest Rate with respect to any Distribution Date (and the related Accrual Period) for the Class 1-XA Certificates will be a per annum rate equal to the excess, if any, of the Pool 1 Net WAC over the weighted average of the Certificate Interest Rates of the Class 1-A1 and Class 1-A2 Certificates (adjusted on the basis of a 360-day year consisting of twelve 30-day months), weighted on the basis of their respective Class Principal Amounts.

(5) The Class 1-XA Certificate is an interest only Certificate and for any Distribution Date the Class Notional Amount of the Class 1-XA Certificates is equal to the aggregate of the Class Principal Amounts of the Class 1-A1 and Class 1-A2 Certificates immediately before such Distribution Date. The initial Class Notional Amount of the Class 1-XA Certificates is $[   ].

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(6) The Certificate Interest Rate with respect to any Distribution Date (and the related Accrual Period) for the Class 2-A1 and Class 2-A2 Certificates will equal the Pool 2 Net WAC.

(7) The Certificate Interest Rate with respect to any Distribution Date (and the related Accrual Period) for the Class 3-A1 and Class 3-A2 Certificates will equal the Pool 3 Net WAC.

(8) The Certificate Interest Rate with respect to any Distribution Date (and the related Accrual Period) for the Class 4-A1 and Class 4-A2 Certificates will equal the Pool 4 Net WAC.

(9) The Certificate Interest Rate with respect to any Distribution Date (and the related Accrual Period) for the Class 5-A1 and Class 5-A2 Certificates will equal the Pool 5 Net WAC.

(10) The Certificate Interest Rates with respect to any Distribution Date (and the related Accrual Period) for the Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates will equal the Subordinate Net WAC.

(11) The Class LT-R Certificate does not have a Certificate Interest Rate or a Class Principal Amount.

As of the Cut-off Date, the Mortgage Loans had an Aggregate Stated Principal Balance of $[        ].

In consideration of the mutual agreements herein contained, the Depositor, the Master Servicer, the Securities Administrator and the Trustee hereby agree as follows.

ARTICLE I

DEFINITIONS

Section 1.01 Definitions. The following words and phrases, unless the context otherwise requires, shall have the following meanings:

10-K Filing Deadline: As defined in Section 6.21(b)(i) hereof.

Accepted Servicing Practices: With respect to any Mortgage Loan, those mortgage servicing practices of prudent mortgage lending institutions which service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located.

Accountant: A Person engaged in the practice of accounting who (except when this Agreement provides that an Accountant must be Independent) may be employed by or affiliated with the Depositor or an Affiliate of the Depositor.

Accountant’s Attestation: As defined in Section 6.24.

Accrual Period: With respect to any Distribution Date and any Class of LIBOR Certificates, the period commencing on the immediately preceding Distribution Date (or, in the case of the first Distribution Date, on the Closing Date) and ending on the day immediately preceding the current Distribution Date. The Accrual Period applicable to the remaining Classes of Certificates and to each Lower-Tier Interest is the calendar month preceding the month in which the Distribution Date occurs. Interest shall accrue on all Classes of Certificates and on all Lower-Tier Interests (other than the LIBOR Certificates, the LT-Pool 1 and LT-Pool 1 PSA Interests, and the MT-1A1 and MT-1A2 Interests) on the basis of a 360-day year consisting of twelve 30-day months, and interest shall accrue on the LIBOR Certificates, the LT-Pool 1 and LT-Pool 1 PSA Interests, and the MT-1A1 and MT-1A2 Interests) on the basis of a 360-day year and the actual number of days elapsed in the related Accrual Period.

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Acknowledgements: The Assignment, Assumption and Recognition Agreements, each dated ___________ __, 20__, assigning rights under the Purchase Agreements and the Servicing Agreements from the Seller to the Depositor and from the Depositor to the Trustee, for the benefit of the Certificateholders.

Additional Collateral: With respect to any Additional Collateral Mortgage Loan, the marketable securities and other acceptable collateral pledged as collateral pursuant to the related pledge agreements.

Additional Collateral Mortgage Loan: Each Mortgage Loan identified as such in the Mortgage Loan Schedule.

Additional Form 10-D Disclosure: As defined in Section 6.21(a)(i).

Additional Form 10-K Disclosure: As defined in Section 6.21(b)(i).

Additional Servicer: Each affiliate of a Servicer that Services any of the Mortgage Loans and each Person who is not an affiliate of the Depositor, who Services 10% or more of the Mortgage Loans (measured by aggregate Stated Principal Balance of the Mortgage Loans, annually at the commencement of the calendar year prior to the year in which an Item 1123 Certificate is required to be delivered). For clarification purposes, the Master Servicer and the Securities Administrator are Additional Servicers.

Adjustment Date: As to any Mortgage Loan, the date on which the related Mortgage Rate adjusts in accordance with the terms of the related Mortgage Note.

Advance: With respect to a Mortgage Loan, the payments required to be made by the Master Servicer or the applicable Servicer with respect to any Distribution Date pursuant to this Agreement or the Servicing Agreements, as applicable, the amount of any such payment being equal to the aggregate of the payments of principal and interest (net of the Master Servicing Fee and/or the applicable Servicing Fee and net of any net income in the case of any REO Property) on the Mortgage Loans that were due on the related Due Date and not received as of the close of business on the related Determination Date, less the aggregate amount of any such delinquent payments that the Master Servicer or the Servicers have determined would constitute Nonrecoverable Advances if advanced.

Adverse REMIC Event: Either (i) loss of status as a REMIC, within the meaning of Section 860D of the Code, for any group of assets identified as a REMIC in the Preliminary Statement to this Agreement, or (ii) imposition of any tax, including the tax imposed under Section 860F(a)(1) on prohibited transactions, and the tax imposed under Section 860G(d) on certain contributions to a REMIC, on any REMIC created hereunder to the extent such tax would be payable from assets held as part of the Trust Fund.

Affiliate: With respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

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Aggregate Expense Rate: With respect to any Mortgage Loan, the sum of the Master Servicing Fee Rate, the applicable Servicing Fee Rate and the premium rate of any lender-paid Primary Mortgage Insurance Policy, expressed as an annual rate.

Aggregate Senior Percentage: As to any Distribution Date, the percentage equivalent of a fraction, the numerator of which is the aggregate of the Class Principal Amounts of the Class 1-A1, Class 1-A2, Class 1-AR, Class 2-A1, Class 2-A2, Class 3-A1, Class 3-A2, Class 4-A1, Class 4-A2, Class 5-A1 and Class 5-A2 Certificates and the denominator of which is the Aggregate Stated Principal Balance for such date, but in no event greater than 100%.

Aggregate Stated Principal Balance: As to any Distribution Date, the aggregate of the Stated Principal Balances for all Mortgage Loans (and when such term is used with respect to a particular Mortgage Pool, the aggregate of the Stated Principal Balances of the Mortgage Loans in such Mortgage Pool) which were outstanding on the Due Date in the month preceding the month of such Distribution Date.

Aggregate Subordinate Percentage: As to any Distribution Date, the excess of 100% over the Aggregate Senior Percentage for such Distribution Date, but in no event less than zero.

Aggregate Voting Interests: The aggregate of the Voting Interests of all the Certificates under this Agreement.

Agreement: This Pooling and Servicing Agreement and all amendments and supplements hereto.

Applicable Credit Support Percentage: As to any Class of Subordinate Certificates and any Distribution Date, the sum of the Class Subordination Percentage of such Class and the aggregate of the Class Subordination Percentages of all other Classes (if any) of Subordinate Certificates that rank lower in priority than such Class.

Apportioned Principal Balance: As to any Distribution Date and each Class of Subordinate Certificates, the Class Principal Amount thereof immediately prior to that Distribution Date, multiplied by a fraction, the numerator of which is the applicable Pool Subordinate Amount (i.e., the Pool 1 Subordinate Amount, the Pool 2 Subordinate Amount, the Pool 3 Subordinate Amount, the Pool 4 Subordinate Amount or the Pool 5 Subordinate Amount, as the case may require), and the denominator of which is the sum of the Pool Subordinate Amounts, in each case, on such date.

Appraised Value: With respect to any Mortgage Loan, the Appraised Value of the related Mortgaged Property shall be: (i) with respect to a Mortgage Loan other than a Refinancing Mortgage Loan, the lesser of (a) the value of the Mortgaged Property based upon the appraisal made at the time of the origination of such Mortgage Loan and (b) the sales price of the Mortgaged Property at the time of the origination of such Mortgage Loan; and (ii) with respect to a Refinancing Mortgage Loan, the value of the Mortgaged Property based upon the appraisal made at the time of the origination of such Refinancing Mortgage Loan.

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Assessment of Compliance: As defined in Section 6.23(a).

Assignment of Mortgage: An assignment of the Mortgage, notice of transfer or equivalent instrument, in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the sale of the Mortgage to the Trustee, which assignment, notice of transfer or equivalent instrument may be in the form of one or more blanket assignments covering the Mortgage Loans secured by Mortgaged Properties located in the same jurisdiction, if permitted by law; provided, however, that the Trustee shall not be responsible for determining whether any such assignment is in recordable form.

Authenticating Agent: Any authenticating agent appointed by the Trustee pursuant to Section 6.10 until any successor authenticating agent for the Certificates is named, and thereafter “Authenticating Agent” shall mean any such successor. The initial Authenticating Agent shall be the Securities Administrator under this Agreement.

Authorized Officer: Any Person who may execute an Officer’s Certificate on behalf of the Depositor.

Available Distribution Amount: With respect to any Distribution Date and each Mortgage Pool, the total amount of all cash, including that portion of the Redemption Price (if applicable) received by the Master Servicer or the Securities Administrator in respect of the Mortgage Loans in such Mortgage Pool from each Servicer or otherwise through the Distribution Account Deposit Date for deposit into the Distribution Account in respect of such Distribution Date, including (1) all scheduled installments of interest (net of the related Servicing Fees and Master Servicing Fees) and principal collected on the related Mortgage Loans and due during the Due Period related to such Distribution Date, together with any Advances in respect thereof, (2) all Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries and the proceeds of any Additional Collateral from the related Mortgage Loans, in each case for such Distribution Date, (3) all partial or full Principal Prepayments, together with any accrued interest thereon, identified as having been received from the related Mortgage Loans during the related Prepayment Period, (4) any amounts paid by the Master Servicer and/or received from the Servicers in respect of Prepayment Interest Shortfalls with respect to the related Mortgage Loans; and (5) the aggregate Purchase Price of all Defective Mortgage Loans in such Mortgage Pool purchased from the Trust Fund during the related Prepayment Period, minus:

(A) an amount equal to the product of (a) the applicable Pool Percentage and (b) the sum of (i) all related fees, charges and other amounts (other than the Master Servicing Fees) payable or reimbursable to the Master Servicer, the Securities Administrator and the Trustee under this Agreement (subject to an aggregate maximum amount of $[         ] annually (per year from the Closing Date to the first anniversary of the Closing Date and each subsequent anniversary year thereafter) to be paid to such parties collectively, whether from collections from Pool 1, Pool 2, Pool 3, Pool 4 or Pool 5, in the order claims for payment of such amounts are received by the Securities Administrator, provided, however, that if a claim is presented for an amount that, when combined with the amount of prior claims paid during that year, would exceed $[       ], then only a portion of such claim will be paid that will make the total amount paid during that year equal to $[             ] and the excess remaining unpaid, together with any additional claims received during that year, will be deferred until the following anniversary year and if the total amount of such deferred claims exceeds $[          ] then payment in such following anniversary year (and each subsequent anniversary year as may be needed until such deferred claims are paid in full) shall be apportioned between the Master Servicer and the Securities Administrator, on the one hand, and the Trustee on the other hand, in proportion to the aggregate amount of deferred claims submitted by such group as of the last day of the prior year, and (ii) all charges and other amounts payable to the Servicers under the Servicing Agreements;

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(B) in the case of (2), (3), (4) and (5) above, with respect to the related Mortgage Loans, any related unreimbursed expenses incurred by the related Servicers in connection with a liquidation or foreclosure and any unreimbursed Advances or Servicer Advances due to the Master Servicer or the related Servicers;

(C) with respect to the related Mortgage Loans, any related unreimbursed Nonrecoverable Advances due to the Master Servicer or the Servicers; and

(D) in the case of (1) through (4) above, with respect to the related Mortgage Loans, any related amounts collected which are determined to be attributable to a subsequent Due Period or Prepayment Period.

Back-Up Certification: As defined in Section 6.21(e).

Bankruptcy: As to any Person, the making of an assignment for the benefit of creditors, the filing of a voluntary petition in bankruptcy, adjudication as a bankrupt or insolvent, the entry of an order for relief in a bankruptcy or insolvency proceeding, the seeking of reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief, or seeking, consenting to or acquiescing in the appointment of a trustee, receiver or liquidator, dissolution, or termination, as the case may be, of such Person pursuant to the provisions of either the Bankruptcy Code or any other similar state laws.

Bankruptcy Code: The United States Bankruptcy Code of 1986, as amended.

BBA: The British Banker’s Association.

Benefit Plan Opinion: An Opinion of Counsel satisfactory to the Certificate Registrar to the effect that any proposed transfer will not (i) cause the assets of the Trust Fund to be regarded as plan assets for purposes of the Plan Asset Regulations or (ii) give rise to any fiduciary duty on the part of the Depositor or the Trustee.

Book-Entry Certificates: Beneficial interests in Certificates designated as “Book-Entry Certificates” in this Agreement, ownership and transfers of which shall be evidenced or made through book entries by a Clearing Agency as described in Section 3.09; provided, that after the occurrence of a Book-Entry Termination whereupon book-entry registration and transfer are no longer permitted and Definitive Certificates are to be issued to Certificate Owners, such Book-Entry Certificates shall no longer be “Book-Entry Certificates.” As of the Closing Date, the following Classes of Certificates constitute Book-Entry Certificates: Class 1-A1, Class 1-A2, Class 1-XA, Class 2-A1, Class 2-A2, Class 3-A1, Class 3-A2, Class 4-A1, Class 4-A2, Class 5-A1, Class 5-A2, Class B-1, Class B-2 and Class B-3.

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Book-Entry Termination: As defined in Section 3.09(c).

Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in New York, New York or, if other than New York, the city in which the Corporate Trust Office of the Trustee is located, or the States of Maryland or Minnesota, are authorized or obligated by law or executive order to be closed.

Certificate: Any one of the certificates signed by the Trustee and authenticated by the Securities Administrator as Authenticating Agent in substantially the forms attached hereto as Exhibit A.

Certificate Group: Each of the Group 1 Certificates, the Group 2 Certificates, the Group 3 Certificates, the Group 4 Certificates and the Group 5 Certificates.

Certificate Interest Rate: With respect to each Class of Certificates and any Distribution Date, the applicable per annum rate described in the Preliminary Statement to this Agreement.

Certificate Owner: With respect to a Book-Entry Certificate, the Person who is the owner of such Book-Entry Certificate, as reflected on the books of the Clearing Agency, or on the books of a Person maintaining an account with such Clearing Agency (directly or as an indirect participant, in accordance with the rules of such Clearing Agency).

Certificate Principal Amount: With respect to any Certificate (other than an Interest-Only Certificate), at the time of determination, the maximum specified dollar amount of principal to which the Holder thereof is then entitled hereunder, such amount being equal to the initial principal amount set forth on the face of such Certificate, less (i) the amount of all principal distributions previously made with respect to such Certificate; (ii) all Realized Losses allocated to such Certificate; provided, however, that on any Distribution Date on which a Subsequent Recovery is distributed, the Certificate Principal Amount of any Certificate then outstanding to which a Realized Loss amount has been applied will be increased sequentially, in order of seniority, by an amount equal to the lesser of (A) the Realized Loss amount previously allocated to that Certificate and (B) any Subsequent Recovery allocable to such Certificate after application (for this purpose) to more senior Classes of Certificates pursuant to this Agreement and (iii) in the case of a Subordinate Certificate, any Subordinate Certificate Writedown Amount allocated to such Certificates. For purposes of Article V hereof, unless specifically provided to the contrary, Certificate Principal Amounts shall be determined as of the close of business of the immediately preceding Distribution Date, after giving effect to all distributions made on such date. Interest-Only Certificates, if applicable, are issued without Certificate Principal Amounts.

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Certificate Register and Certificate Registrar: The register maintained and the registrar appointed pursuant to Section 3.02. The Securities Administrator will act as the initial Certificate Registrar.

Certificateholder: The meaning provided in the definition of “Holder.”

Certification Parties: As defined in Section 6.21(e).

Certifying Person: As defined in Section 6.21(e).

Civil Relief Act: The Servicemembers Civil Relief Act, as amended, or any similar state or local law.

Class: Collectively, Certificates bearing the same class designation. In the case of the Lower-Tier REMIC, the term “Class” refers to all Lower-Tier Interests having the same alphanumeric designation.

Class 1-AR Certificate: The Class 1-AR Certificate executed by the Trustee, and authenticated and delivered by the Authenticating Agent, substantially in the form annexed hereto as Exhibit A, and evidencing the ownership of the sole residual interest in each of the Middle-Tier and Upper-Tier REMICs.

Class LT-R Certificate: The Class LT-R Certificate executed by the Trustee and authenticated and delivered by the Authenticating Agent, substantially in the form annexed as Exhibit A and evidencing ownership of the LT-R Interest.

Class Notional Amount: With respect to any Class of Interest-Only Certificates, the applicable class notional amount calculated as provided in the Preliminary Statement to this Agreement.

Class Principal Amount: With respect to each Class of Certificates (other than an Interest-Only Certificate), the aggregate of the Certificate Principal Amounts of all Certificates of such Class at the date of determination. With respect to any Lower-Tier Interest, the initial Class Principal Amount as shown or described in the table set forth in the Preliminary Statement to this Agreement for the issuing REMIC, as reduced by principal distributed with respect to such Lower-Tier Interest and Realized Losses allocated to such Lower-Tier Interest at the date of determination.

Class Subordination Percentage: With respect to each Class of Subordinate Certificates, for each Distribution Date, the percentage obtained by dividing the Class Principal Amount of such Class immediately prior to such Distribution Date by the aggregate of the Class Principal Amounts of all Classes of Certificates immediately prior to such Distribution Date.

Clearing Agency: An organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act. As of the Closing Date, the Clearing Agency shall be The Depository Trust Company.

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Clearing Agency Participant: A broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency.

Closing Date: __________ __, 20__.

Code: The Internal Revenue Code of 1986, as amended, and as it may be further amended from time to time, any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.

Collection Accounts: Each collection account (other than an Escrow Account) established and maintained by a Servicer pursuant to a Servicing Agreement.

Commission: U.S. Securities and Exchange Commission.

Compensating Interest Payment: As to any Distribution Date, the lesser of (1) the Master Servicing Fee for such date and (2) any Prepayment Interest Shortfall for such date.

Component: Not applicable.

Component Interest Rate: Not applicable.

Component Notional Amount: Not applicable.

Cooperative Corporation: The entity that holds title (fee or an acceptable leasehold estate) to the real property and improvements constituting the Cooperative Property and which governs the Cooperative Property, which Cooperative Corporation must qualify as a Cooperative Housing Corporation under Section 216 of the Code.

Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares and a Proprietary Lease.

Cooperative Property: The real property and improvements owned by the Cooperative Corporation, that includes the allocation of individual dwelling units to the holders of the shares of the Cooperative Corporation.

Cooperative Shares: Shares issued by a Cooperative Corporation.

Corporate Trust Office: With respect to the Trustee, the principal corporate trust office of the Trustee located at [ , Attention: Trustee Sequoia Mortgage Trust 20__-_], or at such other address as the Trustee may designate from time to time by notice to the Certificateholders, the Depositor, the Master Servicer and the Securities Administrator or the principal corporate trust office of any successor Trustee. With respect to the Certificate Registrar and presentment of Certificates for registration of transfer, exchange or final payment, [ , Attention: Sequoia Mortgage Trust 20__-_].

Corresponding Class of Certificates: With respect to each Lower-Tier Interest or Middle-Tier Interest, the Class or Classes of Certificates appearing opposite such Lower-Tier Interest or Middle-Tier Interest, respectively, as described in the Preliminary Statement to this Agreement.

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Credit Support Depletion Date: The first Distribution Date, if any, on which the aggregate of the Class Principal Amounts of the Subordinate Certificates has been reduced to zero.

Current Interest: With respect to each Class of Certificates and any Distribution Date, the aggregate amount of interest accrued at the applicable Certificate Interest Rate during the related Accrual Period on the Class Principal Amount or Class Notional Amount, as applicable, of such Class immediately prior to such Distribution Date.

Custodian: A Person who is at anytime appointed by the Trustee and the Depositor as a custodian of all or a portion of the Mortgage Documents and the related Trustee Mortgage Files and listed on the Mortgage Loan Schedule as the Custodian of such Mortgage Documents and related Trustee Mortgage Files. The initial Custodian is [                        ].

Custodial Agreement: The Custodial Agreement, dated as of ____________ __, 20__, among the Depositor, the Seller, the Trustee and [ , as Custodian]. A copy of the Custodial Agreement is attached hereto as Exhibit D.

Cut-off Date: ____________ __, 20__.

Debt Service Reduction: With respect to any Mortgage Loan, a reduction by a court of competent jurisdiction in a proceeding under the Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became final and non-appealable, except such a reduction resulting from a Deficient Valuation or any reduction that results in a permanent forgiveness of principal.

Defective Mortgage Loan: The meaning specified in Section 2.04.

Deficient Valuation: With respect to any Mortgage Loan, a valuation of the related Mortgaged Property by a court of competent jurisdiction in an amount less than the then outstanding indebtedness under the Mortgage Loan, or any reduction in the amount of principal to be paid in connection with any Scheduled Payment that results in a permanent forgiveness of principal, which valuation or reduction results from an order of such court which is final and non-appealable in a proceeding under the Bankruptcy Code.

Definitive Certificate: A Certificate of any Class issued in definitive, fully registered, certificated form.

Deleted Mortgage Loan: As defined in the applicable Purchase Agreement.

Delinquent: Any Mortgage Loan with respect to which the Scheduled Payment due on a Due Date is not received, based on the MBA method of calculating delinquency.

Depositor: Sequoia Residential Funding, Inc., a Delaware corporation having its principal place of business in California, or its successors in interest.

Determination Date: With respect to each Distribution Date, the 18th day of the month in which such Distribution Date occurs, or, if such 18th day is not a Business Day, the next succeeding Business Day; provided, however, that with respect to a Servicer, the Determination Date is the date set forth in the related Servicing Agreement.

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Disqualified Organization: A “disqualified organization” as defined in Section 860E(e)(5) of the Code.

Distribution Account: The separate Eligible Account created and maintained by the Securities Administrator, on behalf of the Trustee, pursuant to Section 4.01. Funds in the Distribution Account (exclusive of any earnings on investments made with funds deposited in the Distribution Account) shall be held in trust for the Trustee and the Certificateholders for the uses and purposes set forth in this Agreement.

Distribution Account Deposit Date: The 18th day of each calendar month after the initial issuance of the Certificates or, if such 18th day is not a Business Day, the immediately preceding Business Day, commencing in ___________ 20__.

Distribution Date: The 20th day of each month or, if such 20th day is not a Business Day, the next succeeding Business Day, commencing in ___________ 20__.

Distribution Date Statement: As defined in Section 4.02.

Document Transfer Event: The day on which (i) [                    ] or any successor thereto is no longer a Servicer of any of the Mortgage Loans, (ii) the senior, unsecured long-term debt rating of [                ] is less than “BBB-” by Fitch or (iii) any Rating Agency requires such Servicer to deliver the Retained Mortgage Files to the Custodian.

Due Date: With respect to any Mortgage Loan, the date on which a Scheduled Payment is due under the related Mortgage Note as indicated in the applicable Servicing Agreement.

Due Period: As to any Distribution Date, the period beginning on the second day of the month preceding the month of such Distribution Date, and ending on the first day of the month of such Distribution Date.

Effective Loan-to-Value Ratio: A fraction, expressed as a percentage, the numerator of which is the original Stated Principal Balance of the Mortgage Loan, less the amount of Additional Collateral required to secure such Mortgage Loan at the time of origination, if any, and the denominator of which is the Appraised Value of the related Mortgage Property at such date.

Eligible Account: Any of (i) an account or accounts maintained with a federal or state chartered depository institution or trust company the short-term unsecured debt obligations of which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding company, the debt obligations of such holding company) have the highest short-term ratings of each Rating Agency at the time any amounts are held on deposit therein, or (ii) a trust account or accounts maintained with the trust department of a federal or state chartered depository institution or trust company, acting in its fiduciary capacity or (iii) any other account acceptable to each Rating Agency. Eligible Accounts may bear interest, and may include, if otherwise qualified under this definition, accounts maintained with the Trustee, the Paying Agent, the Securities Administrator or the Master Servicer. If the depository institution or trust company that maintains the account or accounts receives a downgrade in its rating such that it is no longer acceptable to the Rating Agencies, the funds on deposit therewith in connection with this transaction shall be transferred to an Eligible Account within 30 days of such downgrade.

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ERISA: The Employee Retirement Income Security Act of 1974, as amended.

ERISA-Qualifying Underwriting: A best efforts or firm commitment underwriting or private placement that meets the requirements of an Underwriter’s Exemption.

ERISA-Restricted Certificate: The Class 1-AR, Class LT-R, Class B-4, Class B-5 or Class B-6 Certificates, any Retained Certificates until such Retained Certificates have been subject to an ERISA-Qualifying Underwriting and any Certificate that does not satisfy the applicable rating requirement under the Underwriter’s Exemption.

ERISA-Restricted Purchase Option Certificate: Any Certificate other than an ERISA-Restricted Certificate.

Escrow Account: As defined in Section 1 of each Servicing Agreement.

Event of Default: Any one of the conditions or circumstances enumerated in Section 6.14.

Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

Excluded Trust Property: As defined in the Preliminary Statement.

Fannie Mae: The Federal National Mortgage Association, a federally chartered and privately owned corporation organized and existing under the Federal National Mortgage Association Charter Act, or any successor thereto.

FDIC: The Federal Deposit Insurance Corporation or any successor thereto.

FHLMC: The Federal Home Loan Mortgage Corporation, a corporate instrumentality of the United States created and existing under Title III of the Emergency Home Finance Act of 1970, as amended, or any successor thereto.

Fitch: Fitch, Inc., or any successor in interest.

Form 8-K Disclosure Information: As defined in Section 6.21(c)(i).

Global Securities: The global certificates representing the Book-Entry Certificates.

Group 1: All of the Group 1 Certificates.

Group 1 Certificate: Any Class 1-A1, Class 1-A2, Class 1-XA or Class 1-AR Certificate.

Group 1 Step-Up Date: The Distribution Date on which the then Aggregate Stated Principal Balance of the Mortgage Loans is equal to or less than 5% of the Aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

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Group 2: All of the Group 2 Certificates.

Group 2 Certificate: Any Class 2-A1 or Class 2-A2 Certificate.

Group 3: All of the Group 3 Certificates.

Group 3 Certificate: Any Class 3-A1 or Class 3-A2 Certificate.

Group 4: All of the Group 4 Certificates.

Group 4 Certificate: Any Class 4-A1 or Class 4-A2 Certificate.

Group 5: All of the Group 5 Certificates.

Group 5 Certificate: Any Class 5-A1 or Class 5-A2 Certificate.

Holder or Certificateholder: The registered owner of any Certificate as recorded on the books of the Certificate Registrar except that, solely for the purposes of taking any action or giving any consent pursuant to this Agreement, any Certificate registered in the name of the Depositor, the Trustee, the Master Servicer, the Securities Administrator and any Servicer, or any Affiliate thereof shall be deemed not to be outstanding in determining whether the requisite percentage necessary to effect any such consent has been obtained, except that, in determining whether the Trustee shall be protected in relying upon any such consent, only Certificates which a Responsible Officer of the Trustee knows to be so owned shall be disregarded. The Trustee, the Certificate Registrar and the Securities Administrator may request and conclusively rely on certifications by the Depositor, the Master Servicer, the Securities Administrator or any Servicer in determining whether any Certificates are registered to an Affiliate of the Depositor, the Master Servicer, the Securities Administrator or any Servicer.

HUD: The United States Department of Housing and Urban Development, or any successor thereto.

Independent: When used with respect to any Accountants, a Person who is “independent” within the meaning of Rule 2-01(b) of the Securities and Exchange Commission’s Regulation S-X. When used with respect to any other Person, a Person who (a) is in fact independent of another specified Person and any Affiliate of such other Person, (b) does not have any material direct financial interest in such other Person or any Affiliate of such other Person, and (c) is not connected with such other Person or any Affiliate of such other Person as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions.

Index: As to each Mortgage Loan, the index from time to time in effect for adjustment of the Mortgage Rate as set forth as such on the related Mortgage Note.

Initial One-Month LIBOR Rate: [    ]%.

Initial Trust Receipt. With respect to any Mortgage Loan, as defined in the Custodial Agreement.

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Insurance Policy: With respect to any Mortgage Loan, any insurance policy, including all names and endorsements thereto in effect, including any replacement policy or policies for any Insurance Policies.

Insurance Proceeds: Proceeds paid by any Insurance Policy (excluding proceeds required to be applied to the restoration and repair of the related Mortgaged Property or released to the Mortgagor), in each case other than any amount included in such Insurance Proceeds in respect of Insured Expenses and (i) the proceeds from any Limited Purpose Surety Bond.

Insured Expenses: Expenses covered by an Insurance Policy or any other insurance policy with respect to the Mortgage Loans.

Interest Distribution Amount: For each Class of Certificates on any Distribution Date, the Current Interest for such Class as reduced by such Class’s share of Net Prepayment Interest Shortfalls and Relief Act Shortfalls. Any such shortfalls and reductions shall be allocated among (i) the Senior Certificates of a Certificate Group, proportionately based on the amount of Net Prepayment Interest Shortfalls and Relief Act Shortfalls experienced by the related Mortgage Pool and related Current Interest otherwise distributable thereon on such Distribution Date and (ii) the Subordinate Certificates, the amount of Net Prepayment Interest Shortfalls and Relief Act Shortfalls experienced by all the Mortgage Loans and interest accrued on their Apportioned Principal Balances before taking into account any reductions in such amounts from shortfalls for that Distribution Date.

Interest-Only Certificates: The Class 1-XA Certificates.

Interest Shortfall: As to any Class of Certificates and any Distribution Date, (i) the amount by which the Interest Distribution Amount for such Class on such Distribution Date and all prior Distribution Dates exceeds (ii) amounts distributed in respect thereof to such Class on prior Distribution Dates.

Interest Transfer Amount: With respect to any Distribution Date and for any Undercollateralized Group, an amount equal to one month’s interest on the applicable Principal Transfer Amount at the Pool 1 Net WAC (if Pool 1 is an Undercollateralized Group), the Pool 2 Net WAC (if Pool 2 is an Undercollateralized Group), the Pool 3 Net WAC (if Pool 3 is an Undercollateralized Group), the Pool 4 Net WAC (if Pool 4 is an Undercollateralized Group) or the Pool 5 Net WAC (if Pool 5 is an Undercollateralized Group), plus any interest accrued on such Undercollateralized Group remaining unpaid from prior Distribution Dates.

Intervening Assignments: The original intervening assignments of the Mortgage, notices of transfer or equivalent instrument.

Item 1123 Certificate: As defined in Section 6.22.

Latest Possible Maturity Date: The Distribution Date occurring in _________ 20__.

LIBOR Business Day: Any day on which banks in London, England and The City of New York are open and conducting transactions in foreign currency and exchange.

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LIBOR Certificate: Any Class 1-A1 or Class 1-A2 Certificate.

LIBOR Determination Date: With respect to each Class of LIBOR Certificates and any Distribution Date, the second LIBOR Business Day immediately preceding the commencement of the Accrual Period related to such Distribution Date.

[Limited Purpose Surety Bond: Any Limited Purpose Surety Bond listed in Exhibit __[reserved].]

Liquidated Mortgage Loan: With respect to any Distribution Date, a defaulted Mortgage Loan (including any REO Property) which was liquidated in the calendar month preceding the month of such Distribution Date and as to which the related Servicer has certified (in accordance with its Servicing Agreement) that it has received all amounts it expects to receive in connection with the liquidation of such Mortgage Loan including the final disposition of an REO Property.

Liquidation Proceeds: Amounts, including Insurance Proceeds, received in connection with the partial or complete liquidation of defaulted Mortgage Loans, whether through trustee’s sale, foreclosure sale or otherwise or amounts received in connection with any condemnation or partial release of a Mortgaged Property and any other proceeds received in connection with an REO Property.

Loan-To-Value Ratio: With respect to any Mortgage Loan and as to any date of determination, the fraction (expressed as a percentage) the numerator of which is the principal balance of the related Mortgage Loan at such date of determination and the denominator of which is the Appraised Value of the related Mortgaged Property.

Lower-Tier Interest: Any one of the interests in the Lower-Tier REMIC as described in the Preliminary Statement to this Agreement.

Lower-Tier REMIC: As described in the Preliminary Statement to this Agreement.

LT-R Interest: The residual interest in the Lower-Tier REMIC, as described in the Preliminary Statement to this Agreement.

Margin: As to each Mortgage Loan, the percentage amount set forth on the related Mortgage Note added to the Index in calculating the Mortgage Rate thereon.

Master Servicer: [                      ], N.A., a national banking association organized under the laws of the United States in its capacity as Master Servicer and any Person succeeding as Master Servicer hereunder or any successor in interest, or if any successor master servicer shall be appointed as herein provided, then such successor master servicer.

Master Servicing Fee: With respect to any Distribution Date, an amount equal to the product of one-twelfth of the Master Servicing Fee Rate and the Stated Principal Balance of each Mortgage Loan as of the first day of the related Due Period.

Master Servicing Fee Rate: [      ]% per annum.

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Maximum Rate: As to any Mortgage Loan, the maximum rate set forth on the related Mortgage Note at which interest can accrue on such Mortgage Loan.

MERS: Mortgage Electronic Registration Systems, Inc., or its successors or assigns.

MERS Designated Mortgage Loan: Each Mortgage Loan that has been originated in the name of, or assigned to, MERS and registered under the MERS System.

MERS System: The system of recording transfers of mortgages electronically maintained by MERS.

Middle-Tier Interest: Any one of the interests in the Middle-Tier REMIC as described in the Preliminary Statement to this Agreement.

Middle-Tier REMIC: As described in the Preliminary Statement to this Agreement.

Moody’s: Moody’s Investors Service, Inc., or any successor in interest.

Mortgage: A mortgage, deed of trust or other instrument encumbering a fee simple interest in real property securing a Mortgage Note, together with improvements thereto.

Mortgage Documents: With respect to each Mortgage Loan, the mortgage documents required to be delivered to the Custodian pursuant to the Custodial Agreement.

Mortgage Loan: A Mortgage and the related notes or other evidences of indebtedness secured by each such Mortgage conveyed, transferred, sold, assigned to or deposited with the Trustee pursuant to Section 2.01 (including any Replacement Loan and REO Property), including without limitation, each Mortgage Loan listed on the Mortgage Loan Schedule, as amended from time to time.

Mortgage Loan Purchase and Sale Agreement: The mortgage loan purchase and sale agreement, dated as of ____________ __, 20__, between the Seller and the Depositor.

Mortgage Loan Schedule: The schedule attached hereto as Schedule A, which shall identify each Mortgage Loan, as such schedule may be amended by the Depositor or the Servicer from time to time to reflect the addition of Replacement Mortgage Loans to, or the deletion of Deleted Mortgage Loans from, the Trust Fund. Such schedule shall, among other things (i) designate the Servicer servicing such Mortgage Loan and the applicable Servicing Fee Rate (and the rate of any subservicing fee, if applicable); (ii) identify the designated Mortgage Pool in which such Mortgage Loan is included; (iii) separately identify the Mortgage Loans with Mortgage Rates that adjust based on the one-month LIBOR index, six-month LIBOR index, one-year LIBOR index and one-year CMT index; (iv) separately identify Additional Collateral Mortgage Loans; and (v) designate the rate of any lender-paid Primary Mortgage Insurance Policy.

Mortgage Note: The original executed note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage under a Mortgage Loan.

Mortgage Pool: Each of Pool 1, Pool 2, Pool 3, Pool 4 and Pool 5.

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Mortgaged Property: The underlying property, including any Additional Collateral, securing a Mortgage Loan which, with respect to a Cooperative Loan, is the related Cooperative Shares and Property Lease.

Mortgage Rate: As to any Mortgage Loan and any Distribution Date, the annual rate of interest borne by the related Mortgage Note as of the related Due Date.

Mortgagor: The obligor on a Mortgage Note.

MT-R Interest: The residual interest in the Middle-Tier REMIC, as described in the Preliminary Statement to this Agreement.

Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan or any other disposition of related Mortgaged Property, the related Liquidation Proceeds net of Advances, Servicer Advances, related Servicing Fees and/or Master Servicing Fees and any other accrued and unpaid servicing fees received and retained in connection with the liquidation of such Mortgage Loan or Mortgaged Property.

Net Mortgage Rate: With respect to any Mortgage Loan and any Distribution Date, the related Mortgage Rate as of the Due Date in the month preceding the month of such Distribution Date reduced by the Aggregate Expense Rate for such Mortgage Loan.

Net Prepayment Interest Shortfall: With respect to any Mortgage Loan and any Distribution Date, the amount by which any Prepayment Interest Shortfall for the related Due Period exceeds the amount of Compensating Interest Payment paid by the Master Servicer and related amounts paid by the applicable Servicer in respect of such shortfall for such Due Period.

Net WAC Shortfall: For any Class of LIBOR Certificates and any Distribution Date, the sum of:

(i) the excess, if any, of the amount that would have been the Current Interest for such Class if the Certificate Interest Rate for such Class were calculated without regard to clause (ii) in the definition thereof, over the actual Current Interest for such Class for such Distribution Date;

(ii) any excess described in clause (i) above remaining unpaid from prior Distribution Dates; and

(iii) interest for the applicable Accrual Period on the amount described in clause (ii) above based on the applicable Certificate Interest Rate (determined without regard to clause (ii) in the definition thereof).

Non-Book-Entry Certificate: Any Certificate other than a Book-Entry Certificate.

Non-permitted Foreign Holder: As defined in Section 3.03(g).

Nonrecoverable Advance: Any portion of an Advance or Servicer Advance previously made or proposed to be made by the Master Servicer and/or a Servicer (as certified in an Officer’s Certificate of the Servicer), which in the good faith judgment of such party, shall not be ultimately recoverable by such party from the related Mortgagor, related Liquidation Proceeds or otherwise.

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Non-Upper-Tier REMIC: As defined in Section 10.01(d).

Non-U.S. Person: Any person other than a “United States person” within the meaning of Section 7701(a)(30) of the Code.

Notional Amount: With respect to an Interest-Only Certificate and any Distribution Date, such Certificate’s Percentage Interest of the Class Notional Amount of such Class of Certificates for such Distribution Date.

NRSRO: Any nationally statistical rating organization for purposes of Rule 17g-5 under the Exchange Act.

NRSRO Certification: A certification in the form of Exhibit O hereto.

Officer’s Certificate: A certificate signed by two Authorized Officers of the Depositor or the Chairman of the Board, any Vice Chairman, the President, any Vice President or any Assistant Vice President of the Master Servicer or the Securities Administrator, and in each case delivered to the Trustee or the Securities Administrator, as provided in this Agreement.

Officer’s Certificate of the Servicer: A certificate (i) signed by the Chairman of the Board, the Vice Chairman of the Board, the President, a Managing Director, a Vice President (however denominated), an Assistant Vice President, the Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant Secretaries of a Servicer, or (ii) if provided for herein, signed by a Servicing Officer, as the case may be, and delivered to the Trustee, the Securities Administrator or the Master Servicer, as required hereby.

One-Month LIBOR: With respect to the first Accrual Period, the Initial One-Month LIBOR Rate. With respect to each subsequent Accrual Period, a per annum rate determined on the LIBOR Determination Date for the LIBOR Certificates in the following manner by the Securities Administrator on the basis of the “Interest Settlement Rate” set by the BBA for one-month United States dollar deposits (1) as such rates appear on the Reuters screen “LIBOR01” as of 11:00 a.m. (London time) on such LIBOR Determination Date or (2) if such rate does not appear on the Reuters screen “LIBOR01” as of 11:00 a.m. (London time), the Securities Administrator will obtain such rate from the Bloomberg L.P. page “US0001M.”

(a) If neither such offered rate is published for such LIBOR Determination Date, One-Month LIBOR for such date will be the most recently published Interest Settlement Rate. In the event that the BBA no longer sets an Interest Settlement Rate, the Securities Administrator will designate an alternative index that has performed, or that the Securities Administrator expects to perform, in a manner substantially similar to the BBA’s Interest Settlement Rate. The Securities Administrator will select a particular index as the alternative index only if it receives an Opinion of Counsel, which opinion shall be an expense reimbursed from the Distribution Account, that the selection of such index will not cause any of the REMICs to lose their classification as REMICs for federal income tax purposes.

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(b) The establishment of One-Month LIBOR by the Securities Administrator and the Securities Administrator’s subsequent calculation of the Certificate Interest Rate applicable to the LIBOR Certificates for the relevant Accrual Period, in the absence of manifest error, will be final and binding.

Opinion of Counsel: A written opinion of counsel, reasonably acceptable in form and substance to the Trustee, the Securities Administrator or the Master Servicer, as required hereby, and who may be in-house or outside counsel to the Depositor, the Master Servicer, the Securities Administrator or the Trustee but which must be Independent outside counsel with respect to any such opinion of counsel concerning the transfer of any Residual Certificate or concerning certain matters with respect to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or the taxation, or the federal income tax status, of each REMIC.

Original Applicable Credit Support Percentage: With respect to each Class of Subordinate Certificates, the related Applicable Credit Support Percentage as of the Closing Date, which shall be equal to the corresponding approximate percentage set forth in the table below opposite its Class designation:

Class B-1	[   ]%
Class B-2	[   ]%
Class B-3	[   ]%
Class B-4	[   ]%
Class B-5	[   ]%
Class B-6	[   ]%

Original Subordinate Class Principal Amount: The aggregate of the initial Class Principal Amounts of the Classes of Subordinate Certificates.

Overcollateralized Group: On any Distribution Date, the Certificate Group which is not an Undercollateralized Group.

Paying Agent: Any paying agent appointed pursuant to Section 3.08. The initial Paying Agent shall be the Securities Administrator under this Agreement.

Percentage Interest: With respect to any Certificate, its percentage interest in the undivided beneficial ownership interest in the Trust Fund evidenced by all Certificates of the same Class as such Certificate. With respect to any Certificate, other than an Interest-Only Certificate, if applicable, or the Class 1-AR and Class LT-R Certificates, the Percentage Interest evidenced thereby shall equal the initial Certificate Principal Amount thereof divided by the initial Class Principal Amount of all Certificates of the same Class. With respect to each of the Class 1-AR and the Class LT-R Certificates, the Percentage Interest evidenced thereby shall be as specified on the face thereof, or otherwise, be equal to 100%. With respect to an Interest-Only Certificate, the Percentage Interest evidenced thereby shall equal its initial Notional Amount as set forth on the face thereof divided by the initial Class Notional Amount of such Class.

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Permitted Investments: At any time, any one or more of the following obligations and securities:

(i) obligations of the United States or any agency thereof, provided that such obligations are backed by the full faith and credit of the United States;

(ii) general obligations of or obligations guaranteed by any state of the United States or the District of Columbia receiving the highest long-term debt rating of each Rating Agency, or such lower rating as shall not result in the downgrading or withdrawal of the ratings then assigned to the Certificates by the Rating Agencies, as evidenced by a signed writing delivered by each Rating Agency;

(iii) commercial or finance company paper which is then receiving the highest commercial or finance company paper rating of each Rating Agency rating such paper, or such lower rating as shall not result in the downgrading or withdrawal of the ratings then assigned to the Certificates by the Rating Agencies, as evidenced by a signed writing delivered by each Rating Agency;

(iv) certificates of deposit, demand or time deposits, or bankers’ acceptances issued by any depository institution or trust company incorporated under the laws of the United States or of any state thereof and subject to supervision and examination by federal and/or state banking authorities, provided that the commercial paper and/or long-term unsecured debt obligations of such depository institution or trust company (or in the case of the principal depository institution in a holding company system, the commercial paper or long-term unsecured debt obligations of such holding company, but only if Moody’s is not the applicable Rating Agency) are then rated one of the two highest long-term and the highest short-term ratings of each Rating Agency for such securities, or such lower ratings as shall not result in the downgrading or withdrawal of the ratings then assigned to the Certificates by the Rating Agencies, as evidenced by a signed writing delivered by each Rating Agency;

(v) demand or time deposits or certificates of deposit issued by any bank or trust company or savings institution to the extent that such deposits are fully insured by the FDIC;

(vi) guaranteed reinvestment agreements issued by any bank, insurance company or other corporation acceptable to the Rating Agencies at the time of the issuance of such agreements, as evidenced by a signed writing delivered by each Rating Agency;

(vii) repurchase obligations with respect to any security described in clauses (i) and (ii) above, in either case entered into with a depository institution or trust company (acting as principal) described in clause (iv) above;

(viii) securities (other than stripped bonds, stripped coupons or instruments sold at a purchase price in excess of 115% of the face amount thereof) bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States or any state thereof which, at the time of such investment, have one of the two highest long-term ratings of each Rating Agency (except if the Rating Agency is Moody’s, such rating shall be the highest commercial paper rating of Moody’s for any such series), or such lower rating as shall not result in the downgrading or withdrawal of the ratings then assigned to the Certificates by the Rating Agencies, as evidenced by a signed writing delivered by each Rating Agency;

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(ix) interests in any money market fund which at the date of acquisition of the interests in such fund and throughout the time such interests are held in such fund has the highest applicable rating by each Rating Agency rating such fund or such lower rating as shall not result in a change in the rating then assigned to the Certificates by each Rating Agency as evidenced by a signed writing delivered by each Rating Agency, including funds for which the Trustee, the Master Servicer, the Securities Administrator or any of its Affiliates is investment manager or adviser;

(x) short-term investment funds sponsored by any trust company or national banking association incorporated under the laws of the United States or any state thereof which on the date of acquisition has been rated by each applicable Rating Agency in their respective highest applicable rating category or such lower rating as shall not result in a change in the rating then specified stated maturity and bearing interest or sold at a discount acceptable to each Rating Agency as shall not result in the downgrading or withdrawal of the ratings then assigned to the Certificates by the Rating Agencies as evidenced by a signed writing delivered by each Rating Agency; and

(xi) such other investments having a specified stated maturity and bearing interest or sold at a discount acceptable to the Rating Agencies as shall not result in the downgrading or withdrawal of the ratings then assigned to the Certificates by the Rating Agencies as evidenced by a signed writing delivered by each Rating Agency;

provided, that no such instrument shall be a Permitted Investment if (i) such instrument evidences the right to receive interest only payments with respect to the obligations underlying such instrument, (ii) such instrument would require the Depositor to register as an investment company under the Investment Company Act of 1940, as amended or (iii) the rating of such instrument contains a “t” or “r” notation therein; provided further, that for all Eligible Investments rated at least “A1/A+” (short/long) by S&P that have terms greater than 60 days, in the event of a downgrade of such Eligible Investment below “A1” (or “A+” if no short term rating) such Eligible Investment shall be removed and transferred to another Eligible Investment within 60 days of such downgrade.

Person: Any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or government or any agency or political subdivision thereof.

Plan: An employee benefit plan or other retirement arrangement which is subject to Section 406 of ERISA and/or Section 4975 of the Code or any entity whose underlying assets include such plan’s or arrangement’s assets by reason of their investment in the entity.

Plan Asset Regulations: The Department of Labor regulations set forth in 29 C.F.R. 2510.3-101.

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Pool 1: The aggregate of Mortgage Loans identified on the Mortgage Loan Schedule as being included in Pool 1.

Pool 1 Mortgage Loan: Any Mortgage Loan in Pool 1.

Pool 1 Net WAC: With respect to any Distribution Date, the weighted average of the Net Mortgage Rates of the Pool 1 Mortgage Loans as of the first day of the calendar month immediately preceding the calendar month of such Distribution Date, weighted on the basis of their Stated Principal Balances.

Pool 1 Subordinate Amount: For any Distribution Date, the excess of the Aggregate Stated Principal Balance of the Pool 1 Mortgage Loans over the aggregate of the Class Principal Amounts of the Class 1-A1, Class 1-A2 and Class 1-AR Certificates immediately before such Distribution Date.

Pool 2: The aggregate of Mortgage Loans identified on the Mortgage Loan Schedule as being included in Pool 2.

Pool 2 Mortgage Loan: Any Mortgage Loan in Pool 2.

Pool 2 Net WAC: With respect to any Distribution Date, the weighted average of the Net Mortgage Rates of the Pool 2 Mortgage Loans as of the first day of the calendar month immediately preceding the calendar month of such Distribution Date, weighted on the basis of their Stated Principal Balances.

Pool 2 Subordinate Amount: For any Distribution Date, the excess of the Aggregate Stated Principal Balance of the Pool 2 Mortgage Loans over the aggregate of the Class Principal Amounts of the Class 2-A1 and Class 2-A2 Certificates immediately before such Distribution Date.

Pool 3: The aggregate of Mortgage Loans identified on the Mortgage Loan Schedule as being included in Pool 3.

Pool 3 Mortgage Loan: Any Mortgage Loan in Pool 3.

Pool 3 Net WAC: With respect to any Distribution Date, the weighted average of the Net Mortgage Rates of the Pool 3 Mortgage Loans as of the first day of the calendar month immediately preceding the calendar month of such Distribution Date, weighted on the basis of their Stated Principal Balances.

Pool 3 Subordinate Amount: For any Distribution Date, the excess of the Aggregate Stated Principal Balance of the Pool 3 Mortgage Loans over the aggregate of the Class Principal Amounts of the Class 3-A1 and Class 3-A2 Certificates immediately before such Distribution Date.

Pool 4: The aggregate of Mortgage Loans identified on the Mortgage Loan Schedule as being included in Pool 4.

Pool 4 Mortgage Loan: Any Mortgage Loan in Pool 4.

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Pool 4 Net WAC: With respect to any Distribution Date, the weighted average of the Net Mortgage Rates of the Pool 4 Mortgage Loans as of the first day of the calendar month immediately preceding the calendar month of such Distribution Date, weighted on the basis of their Stated Principal Balances.

Pool 4 Subordinate Amount: For any Distribution Date, the excess of the Aggregate Stated Principal Balance of the Pool 4 Mortgage Loans over the aggregate of the Class Principal Amounts of the Class 4-A1 and Class 4-A2 Certificates immediately before such Distribution Date.

Pool 5: The aggregate of Mortgage Loans identified on the Mortgage Loan Schedule as being included in Pool 5.

Pool 5 Mortgage Loan: Any Mortgage Loan in Pool 5.

Pool 5 Net WAC: With respect to any Distribution Date, the weighted average of the Net Mortgage Rates of the Pool 5 Mortgage Loans as of the first day of the calendar month immediately preceding the calendar month of such Distribution Date, weighted on the basis of their Stated Principal Balances.

Pool 5 Subordinate Amount: For any Distribution Date, the excess of the Aggregate Stated Principal Balance of the Pool 5 Mortgage Loans over the aggregate of the Class Principal Amounts of the Class 5-A1 and Class 5-A2 Certificates immediately before such Distribution Date.

Pool Percentage: With respect to each Mortgage Pool and any Distribution Date, a fraction, expressed as a percentage, the numerator of which is the Aggregate Stated Principal Balance of such Mortgage Pool, and the denominator of which is the sum of the Aggregate Stated Principal Balances of all of the Mortgage Pools as of such Due Date.

Pool Subordinate Amount: Any of the Pool 1 Subordinate Amount, the Pool 2 Subordinate Amount, the Pool 3 Subordinate Amount, the Pool 4 Subordinate Amount or the Pool 5 Subordinate Amount.

Prepayment Interest Shortfall: With respect to any full or partial Principal Prepayment of a Mortgage Loan, the excess, if any, of (i) one full month’s interest at the applicable Mortgage Rate on the Stated Principal Balance of such Mortgage Loan immediately prior to such Principal Prepayment over (ii) the amount of interest actually received with respect to such Mortgage Loan in connection with such Principal Prepayment.

Prepayment Period: With respect to each Distribution Date, the calendar month immediately preceding the month in which the Distribution Date occurs.

Primary Mortgage Insurance Policy: Each policy of primary mortgage guaranty insurance or any replacement policy therefor with respect to any Mortgage Loan.

Principal Distribution Amount: With respect to any Mortgage Pool and any Distribution Date, the sum of (a) each Scheduled Payment of principal collected or advanced on the related Mortgage Loans (before taking into account any Deficient Valuations or Debt Service Reductions) and due during the related Due Period, (b) that portion of the Purchase Price representing principal of any Mortgage Loans in such Mortgage Pool purchased in accordance with Section 2.04 hereof and received during the related Prepayment Period, (c) the principal portion of any related Substitution Amount received during the related Prepayment Period, (d) any Subsequent Recoveries and the principal portion of all Insurance Proceeds received during the related Prepayment Period with respect to Mortgage Loans in such Mortgage Pool that are not yet Liquidated Mortgage Loans, (e) the principal portion of all Net Liquidation Proceeds received during the related Prepayment Period with respect to Liquidated Mortgage Loans in such Mortgage Pool, (f) the principal portion of the proceeds of any Additional Collateral with respect to the Mortgage Loans in such Mortgage Pool, (g) the principal portion of all partial and full principal prepayments of Mortgage Loans in such Mortgage Pool applied by the Servicers during the related Prepayment Period and (h) on the Distribution Date on which the Trust Fund is to be terminated pursuant to Article X hereof, that portion of the Redemption Price in respect of principal for such Mortgage Pool.

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Principal Prepayment: Any Mortgagor payment of principal or other recovery of principal on a Mortgage Loan that is recognized as having been received or recovered in advance of its scheduled Due Date and applied to reduce the principal balance of the Mortgage Loan in accordance with the terms of the Mortgage Note or the Servicing Agreement.

Principal Prepayment In Full: Any Principal Prepayment of the entire principal balance of the Mortgage Loans.

Principal Transfer Amount: For any Distribution Date and for any Undercollateralized Group, the excess, if any, of the aggregate of the Class Principal Amounts of the Senior Certificates related to such Undercollateralized Group immediately prior to such Distribution Date, over the Aggregate Stated Principal Balance of the Mortgage Pool related to such Undercollateralized Group immediately prior to such Distribution Date.

Proceeding: Any suit in equity, action at law or other judicial or administrative proceeding.

Proprietary Lease: With respect to any Cooperative Property, a lease or occupancy agreement between a Cooperative Corporation and a holder of related Cooperative Shares.

Prospectus: The prospectus supplement dated _________ __, 20__ and the accompanying prospectus dated _________ __, 20__, relating to the Class [   ], Class [   ] and Class [   ] Certificates, together with any supplement thereto.

Purchase Agreement: Each mortgage purchase agreement listed in Exhibit H-1 hereto, as each such agreement has been modified by the related Acknowledgement.

Purchase Price: With respect to any Mortgage Loan required or permitted to be purchased by the Seller or Depositor pursuant to this Agreement, by the Servicers pursuant to the Servicing Agreements, or by the Seller pursuant to the Purchase Agreements, an amount equal to the sum of (i) 100% of the unpaid principal balance of the Mortgage Loan on the date of such purchase, (ii) accrued interest thereon at the applicable Net Mortgage Rate from the date through which interest was last paid by the Mortgagor to the Due Date in the month in which the Purchase Price is to be distributed to Certificateholders, or such other amount as may be specified in the related Servicing Agreement or Purchase Agreement and (iii) the amount of any costs and damages incurred by the Trust Fund as a result of any violation of any applicable federal, state, or local predatory or abusive lending law arising from or in connection with the origination of such Mortgage Loan.

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Rapid Prepayment Conditions: As to any Distribution Date, if (1) the Aggregate Subordinate Percentage on such date is less than 200% of the Aggregate Subordinate Percentage on the Closing Date; or (2) the outstanding Stated Principal Balance of the Mortgage Loans in any Mortgage Pool that are 60 days or more Delinquent (including such Mortgage Loans in REO, foreclosure and bankruptcy status) (averaged over the preceding six month period), as a percentage of the Pool Subordinate Amount of such Mortgage Pool, is greater than or equal to 50%.

Rating Agency: Each of Moody’s and S&P.

Rating Agency Information: The notices, information, reports, certifications and oral and written statements required to be provided to each Rating Agency pursuant to this Agreement or Rule 17g-5 under the Exchange Act.

Realized Loss: With respect to each Liquidated Mortgage Loan, an amount (not less than zero or more than the Stated Principal Balance of the Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated Principal Balance of the Liquidated Mortgage Loan as of the date of such liquidation, plus (ii) interest at the Net Mortgage Rate from the Due Date as to which interest was last paid or advanced (and not reimbursed) to Certificateholders up to the Due Date in the month in which Liquidation Proceeds are required to be distributed on the Stated Principal Balance of such Liquidated Mortgage Loan from time to time, minus (iii) the Liquidation Proceeds and the proceeds of any Additional Collateral, if any, received during the month in which such liquidation occurred, to the extent applied as recoveries of interest at the Net Mortgage Rate and to principal of the Liquidated Mortgage Loan. With respect to each Mortgage Loan which has become the subject of a Deficient Valuation, if the principal amount due under the related Mortgage Note has been reduced, the difference between the principal balance of the Mortgage Loan outstanding immediately prior to such Deficient Valuation and the principal balance of the Mortgage Loan as reduced by the Deficient Valuation.

Record Date: As to any Distribution Date (i) with respect to the LIBOR Certificates, the last Business Day preceding such Distribution Date unless such Certificates shall no longer be Book-Entry Certificates, in which case the Record Date shall be the last Business Day of the month preceding the month of such Distribution Date and (ii) in the case of all other Certificates (including LIBOR Certificates that are subsequently reissued as Definitive Certificates), the last Business Day of the month preceding the month of each Distribution Date (or the Closing Date, in the case of the first Distribution Date).

Redemption Price: With respect to each Class of Certificates, an amount equal to 100% of the related Class Principal Amount of such Certificates, together with interest on such amount at the applicable Certificate Interest Rate through the related Accrual Period (excluding the amount of any unpaid Net WAC Shortfalls with respect to the LIBOR Certificates), and including, the payment of all amounts (including, without limitation, all previously unreimbursed Advances and Servicer Advances and accrued and unpaid Servicing Fees) payable or reimbursable to the Trustee, the Securities Administrator, the Master Servicer and the Servicers pursuant to this Agreement and the Servicing Agreements, or to the Custodian under the Custodial Agreement (to the extent such amounts are not paid to the Custodian by the Seller), as applicable.

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Refinancing Mortgage Loan: Any Mortgage Loan originated in connection with the refinancing of an existing mortgage loan.

Regulation AB: Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and subject to such clarifications and interpretations as have been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time.

Relevant Servicing Criteria: The Servicing Criteria applicable to each party, as set forth on Exhibit K attached hereto. Multiple parties can have responsibility for the same Relevant Servicing Criteria. With respect to a Servicing Function Participant engaged by the Master Servicer, the Securities Administrator or any Servicer, the term “Relevant Servicing Criteria” may refer to a portion of the Relevant Servicing Criteria applicable to such parties.

Related Certificate Group: The Certificate Group related to a particular Mortgage Pool as indicated by the same numerical designation (i.e., Group 1 Certificates are related to Pool 1, the Group 2 Certificates are related to Pool 2, the Group 3 Certificates are related to Pool 3, the Group 4 Certificates are related to Pool 4 and the Group 5 Certificates are related to Pool 5).

Relief Act Shortfalls: With respect to any Distribution Date and any Mortgage Loan as to which there has been a reduction in the amount of interest collectible thereon for the most recently ended calendar month as a result of the application of the Civil Relief Act, the amount, if any, by which (i) interest collectible on such Mortgage Loan for the most recently ended calendar month is less than (ii) interest accrued thereon for such month pursuant to the Mortgage Note.

REMIC: Each pool of assets in the Trust Fund designated as a REMIC as described in the Preliminary Statement to this Agreement.

REMIC Provisions: The provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at sections 860A through 860G of the Code, and related provisions, and regulations, including proposed regulations and rulings, and administrative pronouncements promulgated thereunder, as the foregoing may be in effect from time to time.

REO Property: A Mortgaged Property acquired by the Trust Fund through foreclosure or deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan or otherwise treated as having been acquired pursuant to the REMIC Provisions.

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Replacement Mortgage Loan: A mortgage loan substituted by the Seller for a Deleted Mortgage Loan which must, on the date of such substitution, as confirmed in a Request for Release, substantially in the form attached to the Custodial Agreement, (i) have a Stated Principal Balance, after deduction of the principal portion of the Scheduled Payment due in the month of substitution, not in excess of, and not more than 10% less than, the Stated Principal Balance of the Deleted Mortgage Loan; (ii) have a Maximum Rate not less than (and not more than two percentage points greater than) the Maximum Rate of the Deleted Mortgage Loan; (iii) have a gross margin not less than that of the Deleted Mortgage Loan and, if Mortgage Loans equal to 1% or more of the balance of the related Mortgage Pool as of the Cut-off Date have become Deleted Mortgage Loans, not more than two percentage points more than that of the Deleted Mortgage Loan; (iv) have an Effective Loan-to-Value Ratio or Loan-to-Value Ratio, as applicable, no higher than that of the Deleted Mortgage Loan; (v) have Adjustment Dates that are no more or less frequent than the Deleted Mortgage Loan; (vi) have a remaining term to maturity no greater than (and not more than one year less than that of) the Deleted Mortgage Loan; (vii) not permit conversion of the related Mortgage Rate to a permanent fixed Mortgage Rate; (viii) not be a Cooperative Loan unless the Deleted Mortgage Loan was a Cooperative Loan; (ix) have the same or better Fair, Isaac & Company (FICO) credit score; (x) have an initial interest adjustment date no earlier than five months before (and no later than five months after) the initial adjustment date of the Deleted Mortgage Loan, (xi) comply with each representation and warranty set forth in Article III of each Purchase Agreement; and (xii) shall be accompanied by an Opinion of Counsel that such Replacement Mortgage Loan would not adversely affect the REMIC status of the Trust Fund or would not otherwise be prohibited by this Agreement.

Reportable Event: As defined in Section 6.21(c)(i).

Reporting Servicer: As defined in Section 6.21(b)(i).

Required Reserve Fund Deposit: For any Distribution Date, an amount equal to the lesser of (i) the Current Interest for the Class 1-XA Certificates for such Distribution Date and (ii) the amount needed to increase the amount on deposit in the Reserve Fund to the sum of (a) Net WAC Shortfalls for such Distribution Date with respect to the Class 1-A1 and Class 1-A2 Certificates and (b) $10,000.

Reserve Fund: A fund created as part of the Trust Fund pursuant to Section 5.06 of this Agreement (but which is not an asset of any REMIC).

Residual Certificate: Each of the Class 1-AR and Class LT-R Certificates.

Responsible Officer: With respect to the Trustee, any officer in the corporate trust department or similar group of the Trustee with direct responsibility for the administration of this Agreement and also, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject.

Restricted Certificate: Any Class B-4, Class B-5, Class B-6 or Class LT-R Certificate.

Restricted Global Security: As defined in Section 3.01(c).

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Restricted Holder: As defined in Section 3.03(d).

Retained Certificates: Not applicable.

Retained Mortgage File: Any file of mortgage loan documents maintained by [                     ], in its capacity as Servicer, pursuant to the related Servicing Agreement, prior to any Document Transfer Event.

Rule 15Ga-1 Information: As defined in Section 4.04(a).

Rule 17g-5 Information Provider: The Securities Administrator.

Rule 17g-5 Website: The website maintained by the Securities Administrator pursuant to Section 4.03.

S&P: Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor in interest.

SAIF: The Savings Association Insurance Fund, or any successor thereto.

Sarbanes Oxley Act: The Sarbanes-Oxley Act of 2002 and the rules and regulations of the Commission promulgated thereunder (including any interpretations thereof by the Commission’s staff).

Sarbanes-Oxley Certification: As defined in Section 6.21(e).

Schedule of Exceptions: With respect to any Mortgage Loan, as defined in the Custodial Agreement.

Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due on any Due Date allocable to principal and/or interest on such Mortgage Loan which, unless otherwise specified in the Servicing Agreements, shall give effect to any related Debt Service Reduction and any Deficient Valuation that affects the amount of the monthly payment due on such Mortgage Loan.

Securities Act: The Securities Act of 1933, as amended, and the rules and regulations thereunder.

Securities Administrator: [                    ], not in its individual capacity but solely as Securities Administrator, or any successor in interest, or if any successor Securities Administrator shall be appointed as herein provided, then such successor Securities Administrator. [                   ] shall act as Securities Administrator for so long as it is Master Servicer under this Agreement.

Seller: RWT Holdings, Inc., a Delaware corporation.

Senior Certificate: Any one of the Class A-[  ], Class A-[  ] or Class A-[  ] Certificates, as applicable.

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Senior Percentage: With respect to each Distribution Date and each Mortgage Pool, the percentage equivalent of a fraction, the numerator of which is the aggregate Class Principal Amounts of the Class or Classes of Senior Certificates of the Related Certificate Group immediately prior to such Distribution Date, and the denominator of which is the Aggregate Stated Principal Balance of the related Mortgage Pool for such Distribution Date.

Senior Prepayment Percentage: With respect to any Distribution Date occurring before the Distribution Date in __________ 20__ and any Mortgage Pool, [    ]%. Except as provided herein, the Senior Prepayment Percentage for each Mortgage Pool and any Distribution Date occurring in or after __________ 20__ shall be as follows: (i) from __________ 20__ through __________ 20__, the related Senior Percentage plus [   ]% of the related Subordinate Percentage for that Distribution Date; (ii) from __________ 20__ through __________ 20__, the related Senior Percentage plus [   ]% of the related Subordinate Percentage for that Distribution Date; (iii) from __________ 20__ through __________ 20__, the related Senior Percentage plus [    ]% of the related Subordinate Percentage for that Distribution Date; (iv) from __________ 20__ through __________ 20__, the related Senior Percentage plus [   ]% of the related Subordinate Percentage for that Distribution Date; and (v) from and after __________ 20__, the related Senior Percentage for that Distribution Date; provided, however, that there shall be no reduction in the Senior Prepayment Percentage for the related Certificate Group unless both Step-Down Conditions are satisfied; and provided, further, that if on any such Distribution Date on or after the Distribution Date in __________ 20__, the related Senior Percentage for any Mortgage Pool exceeds the initial related Senior Percentage, the Senior Prepayment Percentage for all Mortgage Pools for that Distribution Date shall again equal 100%.

Notwithstanding the above, if on any Distribution Date the Two Times Test is satisfied on any Distribution Date (i) before the Distribution Date in __________ 20__, the Senior Prepayment Percentage for each Mortgage Pool shall equal the related Senior Percentage for such Distribution Date plus [   ]% of an amount equal to the 100% minus the related Senior Percentage for such Distribution Date and (ii) on or after the Distribution Date in __________ 20__, the Senior Prepayment Percentage for each Mortgage Pool shall equal the related Senior Percentage for such Distribution Date. In addition, if on any Distribution Date the allocation to the Senior Certificates then entitled to distributions of principal of full and partial principal prepayments and other amounts in the percentage required above would reduce the aggregate of the Class Principal Amounts of those Certificates to below zero, the related Senior Prepayment Percentage for such Distribution Date shall be limited to the percentage necessary to reduce that Class Principal Amount to zero.

Senior Principal Distribution Amount: With respect to each Mortgage Pool and any Distribution Date, the sum of:

(1) the related Senior Percentage of all amounts described in clause (a) of the definition of “Principal Distribution Amount” for that Distribution Date;

(2) with respect to each related Mortgage Loan which became a Liquidated Mortgage Loan during the related Prepayment Period, the lesser of:

(x) the related Senior Prepayment Percentage of the Stated Principal Balance of that Mortgage Loan; and

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(y) Net Liquidation Proceeds allocable to principal received with respect to that Mortgage Loan;

(3) the related Senior Prepayment Percentage of the amounts described in clauses (b), (c), (d) and (g) of the definition of “Principal Distribution Amount” for that Mortgage Pool; and

(4) any amounts described in clauses (1) through (3) that remain unpaid with respect to the related Senior Certificates from prior Distribution Dates.

Senior Termination Date: With respect to each Mortgage Pool, the date on which the aggregate of the Class Principal Amounts of the Senior Certificates related to such Mortgage Pool is reduced to zero.

Servicers: Each Servicer under a Servicing Agreement.

Servicer Advance: A “Servicing Advance” as defined in the applicable Servicing Agreement.

Servicer Remittance Date: The 18th day of each calendar month after the initial issuance of the Certificates or, if such 18th day is not a Business Day, the immediately preceding Business Day, commencing in __________ 20__.

Service(s)(ing): In accordance with Regulation AB, the act of servicing and administering the Mortgage Loans or any other assets of the Trust Fund by an entity that meets the definition of “servicer” set forth in Item 1101 of Regulation AB and is subject to the disclosure requirements set forth in Item 1108 of Regulation AB. Any uncapitalized occurrence of this term shall have the meaning commonly understood by participants in the residential mortgage-backed securitization market.

Servicing Agreement: Each agreement listed in Exhibit H-2, as such agreement has been modified by the related Acknowledgement and as it may be amended or supplemented from time to time as permitted hereunder.

Servicing Criteria: The criteria set forth in paragraph (d) of Item 1122 of Regulation AB, as such may be amended from time to time.

Servicing Fee: As to any Distribution Date and each Mortgage Loan, an amount equal to the product of (a) one-twelfth of the Servicing Fee Rate and (b) the Stated Principal Balance of such Mortgage Loan as of the first day of the related Due Period.

Servicing Fee Rate: With respect to each Mortgage Loan and any Distribution Date, the rate specified in the related Servicing Agreement.

Servicing Function Participant: Any Subservicer or Subcontractor, other than each Servicer, the Master Servicer and the Securities Administrator, that is participating in the servicing function within the meaning of Regulation AB, unless such Person’s activities relate only to 5% or less of the Mortgage Loans.

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Servicing Officer: Any officer of the Servicers involved in, or responsible for, the administration and servicing of the Mortgage Loans whose name and facsimile signature appear on a list of servicing officers furnished to the Master Servicer by the Servicers on the Closing Date pursuant to the Servicing Agreements, as such list may from time to time be amended.

Startup Day: The day designated as such pursuant to Section 10.01(b) hereof.

Stated Principal Balance: As to any Mortgage Loan and Due Date, the unpaid principal balance of such Mortgage Loan as of such Due Date as specified in the amortization schedule at the time relating thereto (before any adjustment to such amortization schedule by reason of any moratorium or similar waiver or grace period) after giving effect to any previous partial Principal Prepayments and Liquidation Proceeds allocable to principal (other than with respect to any Liquidated Mortgage Loan) and to the payment of principal due on such Due Date and irrespective of any delinquency in payment by the related Mortgagor.

Step-Down Conditions: As of the first Distribution Date as to which any decrease in any Senior Prepayment Percentage applies, (i) the aggregate outstanding Stated Principal Balance of all Mortgage Loans 60 days or more Delinquent (including Mortgage Loans in REO, foreclosure or bankruptcy status) (averaged over the preceding six month period), as a percentage of the aggregate of the Class Principal Amounts of the Classes of Subordinate Certificates on such Distribution Date, does not equal or exceed 50% and (ii) cumulative Realized Losses with respect to the Mortgage Loans do not exceed (a) with respect to each Distribution Date from __________ 20__ through __________ 20__, [   ]% of the Original Subordinate Class Principal Amount, (b) with respect to each Distribution Date from __________ 20__ through __________ 20__, [   ]% of the Original Subordinate Class Principal Amount, (c) with respect to each Distribution Date from __________ 20__ through __________ 20__, [   ]% of the Original Subordinate Class Principal Amount, (d) with respect to each Distribution Date from __________ 20__ through __________ 20__, [   ]% of the Original Subordinate Class Principal Amount and (e) with respect to each Distribution Date from and after __________ 20__, [   ]% of the Original Subordinate Class Principal Amount.

Sub Account: Not applicable.

Subcontractor: Any vendor, subcontractor or other Person that is not responsible for the overall servicing of Mortgage Loans but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans under the direction or authority of any Servicer (or a Subservicer of any Servicer), the Master Servicer or the Securities Administrator.

Subordinate Certificate: Any of the Class B-[   ], Class B-[   ], or Class B-[   ] Certificates.

Subordinate Certificate Writedown Amount: The amount described in Section 5.03(c).

Subordinate Class Percentage: As to any Distribution Date and any Class of Subordinate Certificates, a fraction, expressed as a percentage, the numerator of which is the Class Principal Amount of such Class on such date, and the denominator of which is the aggregate of the Class Principal Amounts of all Classes of Subordinate Certificates on such date.

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Subordinate Net WAC: For any Distribution Date, the weighted average of the Pool 1 Net WAC, the Pool 2 Net WAC, the Pool 3 Net WAC, the Pool 4 Net WAC and the Pool 5 Net WAC, in each case weighted on the basis of the relative Pool Subordinate Amounts for Pool 1, Pool 2, Pool 3, Pool 4 and Pool 5, respectively, immediately prior to such Distribution Date.

Subordinate Percentage: With respect to each Mortgage Pool and any Distribution Date, the difference between 100% and the related Senior Percentage for such Mortgage Pool for such Distribution Date.

Subordinate Prepayment Percentage: With respect to any Distribution Date and for each Mortgage Pool, the difference between 100% and the related Senior Prepayment Percentage for such Mortgage Pool for that Distribution Date.

Subordinate Principal Distribution Amount: With respect to any Distribution Date and each Mortgage Pool, an amount equal to the sum of:

(1) the related Subordinate Percentage of all amounts described in clause (a) of the definition of “Principal Distribution Amount” for that Distribution Date;

(2) with respect to each Mortgage Loan that became a Liquidated Mortgage Loan during the related Prepayment Period the amount of the Net Liquidation Proceeds allocated to principal received with respect thereto remaining after application thereof pursuant to clause (2) of the definition of “Senior Principal Distribution Amount” for that Distribution Date, up to the related Subordinate Percentage of the Stated Principal Balance of such Mortgage Loan;

(3) the related Subordinate Prepayment Percentage of all amounts described in clauses (b), (c), (d) and (g) of the definition of “Principal Distribution Amount” for that Mortgage Pool and that Distribution Date; and

(4) any amounts described in clauses (1) through (3) for any previous Distribution Date that remain unpaid,

minus the sum of:

(a) any Principal Transfer Amount paid from the Available Distribution Amount of such Mortgage Pool to the Undercollateralized Group; and

(b) the amount of principal distributions made to the Senior Certificates pursuant to Section 5.02(l).

Subsequent Recovery: Any amount recovered by a Servicer with respect to a Liquidated Mortgage Loan (after reimbursement of any unreimbursed Advances or expenses of the Servicer) with respect to which a Realized Loss was incurred after the liquidation or disposition of such Mortgage Loan.

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Subservicer: Any Person that (i) services Mortgage Loans on behalf of any Servicer, and (ii) is responsible for the performance (whether directly or through sub-servicers or Subcontractors) of Servicing functions required to be performed under this Agreement, any related Servicing Agreement or any sub-servicing agreement that are identified in Item 1122(d) of Regulation AB.

Substitution Amount: As defined in the second paragraph of Section 2.04(b).

Tax Matters Person: The “tax matters person” as specified in the REMIC Provisions which shall initially be the Holder of the Class LT-R Certificate, as described under Section 10.01(l).

Trust Fund: The corpus of the trust created pursuant to this Agreement, consisting of the Mortgage Loans and all interest and principal received thereon after the Cut-off Date (other than Scheduled Payments due on or prior to the Cut-off Date), the Depositor’s rights assigned to the Trustee under the Purchase Agreements and the Servicing Agreements and the Mortgage Loan Purchase and Sale Agreement, the Insurance Policies relating to the Mortgage Loans, all cash, instruments or property held or required to be held in the Collection Accounts, the Distribution Account, property that secured a Mortgage Loan, the pledge, control and guaranty agreements and any Limited Purpose Surety Bond relating to the Additional Collateral Mortgage Loans and the Reserve Fund.

Trustee: [               ], a national banking association organized and existing under the laws of the United States of America and any Person succeeding the Trustee hereunder, or if any successor trustee or any co-trustee shall be appointed as herein provided, then such successor trustee and such co-trustee, as the case may be.

Trustee Mortgage Files: With respect to each Mortgage Loan, the Mortgage Documents to be retained in the custody and possession of the Trustee or the Custodian on behalf of the Trustee and any Retained Mortgage File that is delivered to the Custodian or the Trustee pursuant to Section 2.01(a) of this Agreement.

Two Times Test: As to any Distribution Date, (i) the Aggregate Subordinate Percentage is at least two times the Aggregate Subordinate Percentage as of the Closing Date; (ii) the aggregate outstanding Stated Principal Balances of all Mortgage Loans 60 days or more Delinquent (including Mortgage Loans in REO, foreclosure or bankruptcy status) (averaged over the preceding six month period), as a percentage of the aggregate of the Class Principal Amounts of the Classes of Subordinate Certificates on such Distribution Date, does not equal or exceed [   ]%; and (iii) on or prior to the Distribution Date in __________ 20__, cumulative Realized Losses with respect to the Mortgage Loans do not exceed [   ]% of the aggregate Original Subordinate Class Principal Amount, and thereafter, cumulative Realized Losses with respect to the Mortgage Loans do not exceed [   ]% of the Original Subordinate Class Principal Amount.

UCC: The Uniform Commercial Code as enacted in the relevant jurisdiction.

Undercollateralized Group: With respect to any Distribution Date, any Certificate Group with respect to which the aggregate Class Principal Amount of such Certificate Group is greater than the aggregate Stated Principal Balance of the Mortgage Loans in the related Mortgage Pool immediately prior to such Distribution Date.

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Underwriter(s): Banc of America Securities LLC.

Underwriter’s Exemption: Prohibited Transaction Exemption (“PTE”) 93-31 (58 Fed. Reg. 28620 (1993)), as most recently amended and restated by PTE 2007-5 (72 Fed. Reg. 13130 (March 20, 2007)) or any substantially similar administrative exemption granted by the U.S. Department of Labor to the Underwriter(s).

Underwriting Agreement: The Underwriting Agreement, dated __________ __, 20__, among the Seller, the Depositor and the Underwriter(s).

Uniform Commercial Code: The Uniform Commercial Code as in effect in any applicable jurisdiction from time to time.

Upper-Tier REMIC: As described in the Preliminary Statement to this Agreement.

Voting Interests: The portion of the voting rights of all the Certificates that is allocated to any Certificate for purposes of the voting provisions of this Agreement. At all times during the term of this Agreement, [98].00% of all Voting Interests shall be allocated to the Class 1-A1, Class 1-A2, Class 2-A1, Class 2-A2, Class 3-A1, Class 3-A2, Class 4-A1, Class 4-A2, Class 5-A1, Class 5-A2, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates. Voting Interests shall be allocated among such Certificates based on the product of (i) [98].00% and (ii) the fraction, expressed as a percentage, the numerator of which is the aggregate of the Class Principal Amounts of all Classes then outstanding and the denominator of which is the sum of the then-outstanding Aggregate Stated Principal Balances of all Mortgage Pools. At all times during the term of this Agreement, [2].00% of all Voting Interests shall be allocated to each of the Class 1-AR and Class 1-XA Certificates. Voting Interests shall be allocated among such Certificates based on the product of (i) 1% and (ii) the fraction, expressed as a percentage, the numerator of which is the aggregate of the Class Principal Amounts Class then outstanding and the denominator of which is the sum of the then-outstanding Aggregate Stated Principal Balances of all Mortgage Pools. The Class LT-R Certificate shall not have any voting rights.

Section 1.02 Calculations Respecting Mortgage Loans.

Calculations required to be made pursuant to this Agreement with respect to any Mortgage Loan in the Trust Fund shall be made based upon current information as to the terms of the Mortgage Loans and reports of payments received from the Mortgagor on such Mortgage Loans and payments to be made to the Securities Administrator as supplied to the Securities Administrator by the Master Servicer. The Securities Administrator shall not be required to recompute, verify or recalculate the information supplied to it by the Master Servicer or any Servicer.

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ARTICLE II

DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES

Section 2.01 Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans.

(a) Concurrently with the execution and delivery of this Agreement, the Depositor does hereby transfer, assign, set over, deposit with and otherwise convey to the Trustee, without recourse, subject to Sections 2.02 and 2.04, in trust, all the right, title and interest of the Depositor in and to the Trust Fund. Such conveyance includes, without limitation, (i) the Mortgage Loans, including the right to all payments of principal and interest received on or with respect to the Mortgage Loans after the Cut-off Date (other than Scheduled Payments due on or before such date), and all such payments due after such date but received on or prior to such date and intended by the related Mortgagors to be applied after such date; (ii) all of the Depositor’s right, title and interest in and to all amounts from time to time credited to and the proceeds of the Distribution Account, any Collection Accounts or any Escrow Account established with respect to the Mortgage Loans; (iii) with respect to the Mortgage Loans, to the extent set forth in the related Acknowledgements, the Depositor’s rights under the Purchase Agreements and the Servicing Agreements and all of the Depositor’s rights under Mortgage Loan Purchase and Sale Agreement; (iv) all of the Depositor’s right, title or interest in REO Property and the proceeds thereof; (v) all of the Depositor’s rights under any Insurance Policies related to the Mortgage Loans; and (vi) the Depositor’s security interest in any collateral pledged to secure the Mortgage Loans, including the Mortgaged Properties and any Additional Collateral relating to the Additional Collateral Mortgage Loans, including, but not limited to, the pledge, control and guaranty agreements and any related Limited Purpose Surety Bond to have and to hold, in trust; and the Trustee declares that, subject to the review provided for in Section 2.02, it has received and shall hold the Trust Fund, as trustee, in trust, for the benefit and use of the Holders of the Certificates and for the purposes and subject to the terms and conditions set forth in this Agreement, and, concurrently with such receipt, has caused to be executed, authenticated and delivered to or upon the order of the Depositor, in exchange for the Trust Fund, Certificates in the authorized denominations evidencing the entire ownership of the Trust Fund.

The foregoing sale, transfer, assignment, set-over, deposit and conveyance does not and is not intended to result in the creation or assumption by the Trustee of any obligation of the Depositor, the Seller or any other Person in connection with the Mortgage Loans or any other agreement or instrument relating thereto except as specifically set forth therein.

Notwithstanding anything to the contrary contained herein, the parties hereto acknowledge that the functions of the Trustee with respect to the custody, acceptance, inspection and release of Mortgage Files, including but not limited to certain insurance policies and documents contemplated by this Agreement, and preparation and delivery of the certifications shall be performed by the Custodian pursuant to the terms and conditions of the Custodial Agreement.

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In connection with such transfer and assignment of the Mortgage Loans, the Depositor does hereby deliver to, and deposit with, or cause to be delivered to and deposited with, the Custodian acting on the Trustee’s behalf, the following documents or instruments with respect to each related Mortgage Loan (each, a “Trustee Mortgage File”) so transferred and assigned:

(i) with respect to each Mortgage Loan, the original Mortgage Note endorsed without recourse in proper form to the order of the Trustee, or in blank (in each case, with all necessary intervening endorsements, as applicable); provided that any such endorsement may be stamped or generated electronically, if acceptable under all applicable laws and regulations and the endorsing entity had adopted appropriate authorizing resolutions prior to such stamped or electronic endorsement.

(ii) with respect to each Mortgage Loan (other than a Cooperative Loan), the original mortgage, deed of trust or other instrument creating a first lien on the underlying property securing the Mortgage Loan and bearing evidence that such instrument has been recorded in the appropriate jurisdiction where the Mortgaged Property is located (or, in lieu of the original of the Mortgage, a true copy of the Mortgage certified by the originator, or a duplicate or conformed copy of the Mortgage, together with a certificate of either the closing attorney or an officer of the title insurer that issued the related title insurance policy, certifying that such copy represents a true and correct copy of the original and that such original has been or is currently submitted to be recorded in the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located);

(iii) with respect to each Mortgage Loan (other than a Cooperative Loan), the Assignment of Mortgage in form and substance acceptable for recording in the relevant jurisdiction, such assignment being either (A) in blank, without recourse, or (B) or endorsed to “[                        ], as Trustee of the Sequoia Mortgage Trust 20__-_, Mortgage Pass-Through Certificates, without recourse;” provided, that if the Mortgage Loan is a MERS Designated Mortgage Loan, no Assignment of Mortgage shall be required;

(iv) with respect to each Mortgage Loan (other than a Cooperative Loan), the originals or certified copies of all Intervening Assignments of the Mortgage, if any, with evidence of recording thereon, showing a complete chain of title to the last endorsee, including any warehousing assignment;

(v) with respect to each Mortgage Loan (other than a Cooperative Loan), any assumption, modification, written assurance, substitution, consolidation, extension or guaranty agreement, if applicable;

(vi) with respect to each Mortgage Loan (other than a Cooperative Loan), the original policy of title insurance (or a true copy thereof) with respect to any such Mortgage Loan, or, if such policy has not yet been delivered by the insurer, the title commitment or title binder to issue same;

(vii) if the Mortgage Note or Mortgage or any other material document or instrument relating to the Mortgage Loan has been signed by a person on behalf of the Mortgagor, the original power of attorney or other instrument that authorized and empowered such person to sign bearing evidence that such instrument has been recorded, if so required, in the appropriate jurisdiction where the Mortgaged Property is located (or, in lieu thereof, a duplicate or conformed copy of such instrument, together with a certificate of receipt from the recording office, certifying that such copy represents a true and complete copy of the original and that such original has been or is currently submitted to be recorded in the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located); and

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(viii) with respect to each Mortgage Loan which constitutes a Cooperative Mortgage Loan:

(a) the original loan and security agreement;

(b) the original Cooperative Shares;

(c) a stock power executed in blank by the person in whose name the Cooperative Shares are issued;

(d) the Proprietary Lease or occupancy agreement accompanied by an assignment in blank of such proprietary lease;

(e) the recognition agreement executed by the Cooperative Corporation, which requires the Cooperative Corporation to recognize the rights of the lender and its successors in interest and assigns, under the cooperative;

(f) UCC1 financing statements with recording information thereon from the appropriate governmental recording offices if necessary to perfect the security interest of the Cooperative Mortgage Loan under the Uniform Commercial Code in the jurisdiction in which the cooperative project is located, accompanied by UCC3 financing statements executed in blank for recordation of the change in the secured party thereunder;

(g) the original policy of title insurance or with respect to any such Cooperative Mortgage Loan, if such policy has not yet been delivered by the insurer, the title commitment or title binder to issue same; and

(h) Any guarantees, if applicable.

Notwithstanding the foregoing, with respect to Mortgage Loans serviced by [                    ], such Servicer shall hold the Retained Mortgage Files in trust for the benefit of the Trustee pursuant to the related Servicing Agreement. The possession of each Retained Mortgage File held by such Servicer is in a custodial capacity only. Within 60 days of the occurrence of a Document Transfer Event, such Servicer shall, pursuant to the related Servicing Agreement, deliver or cause to be delivered to and deposited with the Trustee or to the corporate trust services division of the Custodian the Retained Mortgage Files consisting of the following additional items, as applicable: (i) the original mortgage with evidence of recording indicated thereon (or, if such original recorded mortgage has not yet been returned by the recording office, a copy thereof certified to be a true and complete copy of such mortgage sent for recording) and (ii) the policies of title insurance issued with respect to each applicable Mortgage Loan.

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(b) The Depositor shall cause Assignments of Mortgage with respect to each Mortgage Loan other than a Cooperative Mortgage Loan to be completed in the form specified in Section 2.01(a)(iii) above within 30 days of the Closing Date for purpose of their recording; provided, however, that such Assignments of Mortgage need not be recorded if, on or prior to the Closing Date, the Depositor delivers, at its own expense, an Opinion of Counsel (which must be Independent counsel) acceptable to the Trustee, the Securities Administrator and the Rating Agencies, to the effect that recording in such states is not required to protect the Trustee’s interest in the related Mortgage Loans. Subject to the preceding sentence, as soon as practicable after the Closing Date (but in no event more than 270 days thereafter except to the extent delays are caused by the applicable recording office), the Depositor at its own expense and with the cooperation of the applicable Servicer, shall cause to be properly recorded by each Servicer in each public recording office where the related Mortgages are recorded each Assignment of Mortgage endorsed in the form described in Section 2.01(a)(iii) above with respect to each such Mortgage Loan.

(c) In instances where a title insurance policy is required to be delivered to the Trustee or the Custodian on behalf of the Trustee under Sections 2.01(a)(vi) or 2.01(a)(viii)(g) above and is not so delivered, the Depositor will provide a copy of such title insurance policy to the Trustee, or to the Custodian on behalf of the Trustee, as promptly as practicable after the execution and delivery hereof, but in any case within 180 days of the Closing Date.

(d) For Mortgage Loans (if any) that have been prepaid in full after the Cut-off Date and prior to the Closing Date, the Depositor, in lieu of delivering the above documents, herewith delivers to the Trustee, or to the Custodian on behalf of the Trustee, an Officer’s Certificate which shall include a statement to the effect that all amounts received in connection with such prepayment that are required to be deposited in the Distribution Account pursuant to Section 4.01 have been so deposited. All original documents that are not delivered to the Trustee or the Custodian on behalf of the Trustee shall be held by the Master Servicer or the applicable Servicer in trust for the benefit of the Trustee and the Certificateholders.

Section 2.02 Acceptance of Trust Fund by Trustee; Review of Documentation for Trust Fund.

(a) The Trustee, by execution and delivery hereof, acknowledges receipt by it or by the Custodian on its behalf of the Trustee Mortgage Files pertaining to the Mortgage Loans listed on the Mortgage Loan Schedule, subject to review thereof by the Custodian on behalf of the Trustee in accordance with Section 4(a) of the Custodial Agreement (a form of which is attached hereto as Exhibit D). The Custodian on behalf of the Trustee, will execute and deliver to the Trustee and the Depositor an Initial Trust Receipt and Schedule of Exceptions, on the Closing Date in the forms required by the Custodial Agreement.

(b) Within 270 days after the Closing Date, the Custodian on behalf of the Trustee, will, for the benefit of Holders of the Certificates, review each related Trustee Mortgage File to ascertain that all required documents set forth in Section 2.01 have been received and appear on their face to conform with the requirements set forth in Section 4A and 4B of the Custodial Agreement.

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(c) Nothing in this Agreement shall be construed to constitute an assumption by the Trust Fund, the Trustee, the Custodian or the Certificateholders of any unsatisfied duty, claim or other liability on any Mortgage Loan or to any Mortgagor.

(d) Each of the parties hereto acknowledges that the Custodian shall perform the applicable review of the related Mortgage Loans and respective certifications as provided in the Custodial Agreement.

(e) Upon execution of this Agreement, the Depositor hereby delivers to the Trustee and the Trustee acknowledges receipt of the Acknowledgements, together with the related Purchase Agreements, Servicing Agreements and the Mortgage Loan Purchase and Sale Agreement.

Section 2.03 Representations and Warranties of the Depositor.

(a) The Depositor hereby represents and warrants to the Trustee, for the benefit of the Certificateholders, and to the Master Servicer and the Securities Administrator as of the Closing Date or such other date as is specified, that:

(i) the Depositor is a corporation duly organized, validly existing and in good standing under the laws governing its creation and existence and has full corporate power and authority to own its property, to carry on its business as presently conducted, to enter into and perform its obligations under this Agreement, and to create the trust pursuant hereto;

(ii) the execution and delivery by the Depositor of this Agreement have been duly authorized by all necessary corporate action on the part of the Depositor; neither the execution and delivery of this Agreement, nor the consummation of the transactions herein contemplated, nor compliance with the provisions hereof, will conflict with or result in a breach of, or constitute a default under, any of the provisions of any law, governmental rule, regulation, judgment, decree or order binding on the Depositor or its properties or the certificate of incorporation or bylaws of the Depositor;

(iii) the execution, delivery and performance by the Depositor of this Agreement and the consummation of the transactions contemplated hereby do not require the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any state, federal or other governmental authority or agency, except such as has been obtained, given, effected or taken prior to the date hereof;

(iv) this Agreement has been duly executed and delivered by the Depositor and, assuming due authorization, execution and delivery by the Trustee, the Master Servicer and the Securities Administrator, constitutes a valid and binding obligation of the Depositor enforceable against it in accordance with its terms except as such enforceability may be subject to (A) applicable bankruptcy and insolvency laws and other similar laws affecting the enforcement of the rights of creditors generally and (B) general principles of equity regardless of whether such enforcement is considered in a proceeding in equity or at law;

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(v) there are no actions, suits or proceedings pending or, to the knowledge of the Depositor, threatened or likely to be asserted against or affecting the Depositor, before or by any court, administrative agency, arbitrator or governmental body (A) with respect to any of the transactions contemplated by this Agreement or (B) with respect to any other matter which in the judgment of the Depositor will be determined adversely to the Depositor and will if determined adversely to the Depositor materially and adversely affect it or its business, assets, operations or condition, financial or otherwise, or adversely affect its ability to perform its obligations under this Agreement;

(vi) immediately prior to the transfer and assignment of the Mortgage Loans to the Trustee, the Depositor was the sole owner of record and holder of each Mortgage Loan, and the Depositor had good and marketable title thereto, and had full right to transfer and sell each Mortgage Loan to the Trustee free and clear, subject only to (1) liens of current real property taxes and assessments not yet due and payable and, if the related Mortgaged Property is a condominium unit, any lien for common charges permitted by statute, (2) covenants, conditions and restrictions, rights of way, easements and other matters of public record as of the date of recording of such Mortgage acceptable to mortgage lending institutions in the area in which the related Mortgaged Property is located and specifically referred to in the lender’s title insurance policy or attorney’s opinion of title and abstract of title delivered to the originator of such Mortgage Loan, and (3) such other matters to which like properties are commonly subject which do not, individually or in the aggregate, materially interfere with the benefits of the security intended to be provided by the Mortgage, of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest, and had full right and authority, subject to no interest or participation of, or agreement with, any other party, to sell and assign each Mortgage Loan pursuant to this Agreement;

(vii) This Agreement creates a valid and continuing security interest (as defined in the applicable Uniform Commercial Code (the “UCC”), in the Mortgage Loans in favor of the Trustee, which security interest is prior to all other liens, and is enforceable as such against creditors of and purchasers from the Depositor;

(viii) The Mortgage Loans constitute “instruments” within the meaning of the applicable UCC;

(ix) Other than the security interest granted to the Trustee pursuant to this Agreement, the Depositor has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Mortgage Loans. The Depositor has not authorized the filing of and is not aware of any financing statement against the Depositor that includes a description of the collateral covering the Mortgage Loans other than a financing statement relating to the security interest granted to the Trustee hereunder or that has been terminated. The Depositor is not aware of any judgment or tax lien filings against the Depositor;

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(x) None of the Mortgage Loans have any marks or notations indicating that such Mortgage Loans have been pledged, assigned or otherwise conveyed to any Person other than the Trustee; and

(xi) The Depositor has received all consents and approvals required by the terms of the Mortgage Loans to convey the Mortgage Loans hereunder to the Trustee.

The foregoing representations made in this Section 2.03 shall survive the termination of this Agreement and shall not be waived by any party hereto.

Section 2.04 Discovery of Breach; Repurchase or Substitution of Mortgage Loans.

(a) Pursuant to Sections 2(b) and 2(d) of the Mortgage Loan Purchase and Sale Agreement, the Seller has made or assigned certain representations and warranties as to the characteristics of the Mortgage Loans as of the Closing Date, including representations and warranties that no Mortgage Loan is a “high-cost home loan” as defined under any local, state, or federal laws, and each of the Depositor and the Trustee intend that the Mortgage Loans (including any Replacement Mortgage Loans) included in the Trust Fund satisfy such representations and warranties. The Depositor, for the benefit of the Trustee and the Certificateholders hereby assigns any such rights against the Seller to the Trustee and the Seller acknowledges that it has agreed to comply with the provisions of this Section 2.04 in respect of a breach of any of such representations and warranties.

It is understood and agreed that such representations and warranties set forth in Section 2(b) and 2(d) of the Mortgage Loan Purchase and Sale Agreement shall survive delivery of the Trustee Mortgage Files and the Assignment of Mortgage of each Mortgage Loan to the Trustee and shall continue throughout the term of this Agreement. Upon (i) discovery or receipt by the Depositor of written notice of any materially defective document in a related Trustee Mortgage File or, following the date of delivery to the Trustee of the Custodian’s Final Trust Receipt as required under the Custodial Agreement, that a document is missing from a related Trustee Mortgage File, or (ii) discovery by the Depositor or the Seller of the breach by the Seller [or designated originator] of any representation or warranty under the Mortgage Loan Purchase and Sale Agreement made by the Depositor or the Seller [or the designated originator] in respect of any Mortgage Loan, which materially adversely affects the value of that Mortgage Loan or the interest therein of the Certificateholders (a “Defective Mortgage Loan”) (each of such parties hereby agreeing to give written notice thereof to the Trustee and the other of such parties), the Trustee, or its designee, shall promptly notify the Depositor in writing of such defective or missing document or breach and request that the Depositor deliver such missing document or cure or cause the cure of such defect or breach within 90 days from the date that the Depositor discovered or was notified of such missing document, defect or breach, and if the Depositor does not deliver such missing document or cure or cause the cure of such defect or breach in all material respects during such period, the Trustee shall enforce the Seller’s obligation under the Mortgage Loan Purchase and Sale Agreement and cause the Seller [or designated originator] to repurchase that Mortgage Loan from the Trust Fund at the Purchase Price on or prior to the Determination Date following the expiration of such 90-day period (subject to Section 2.04(b) below); provided, however, that, in connection with any such breach that could not reasonably have been cured within such 90-day period, if the Seller shall have commenced to cure such breach within such 90-day period, the Seller shall be permitted to proceed thereafter diligently and expeditiously to cure or cause the cure the same within an additional 90-day period. The Purchase Price for the repurchased Mortgage Loan shall be deposited in the related Distribution Account, and the Trustee, or its designee, upon receipt of written certification from the Securities Administrator of such deposit, shall release to the Seller, the related Trustee Mortgage File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, representation or warranties, as either party shall furnish to it and as shall be necessary to vest in such party any Mortgage Loan released pursuant hereto and the Trustee, or its designee, shall have no further responsibility with regard to such Trustee Mortgage File (it being understood that the Trustee shall have no responsibility for determining the sufficiency of such assignment for its intended purpose). In lieu of repurchasing any such Mortgage Loan as provided above, either party may cause such Mortgage Loan to be removed from the Trust Fund (in which case it shall become a Deleted Mortgage Loan) and substitute one or more Replacement Mortgage Loans in the manner and subject to the limitations set forth in Section 2.04(b) below. It is understood and agreed that the obligation of the Seller to cure, to cause the cure or to repurchase [or cause the repurchase by the designated originator] (or to substitute for) any Mortgage Loan as to which a document is missing, a material defect in a constituent document exists or as to which such a breach has occurred and is continuing shall constitute the sole remedy against the such party respecting such omission, defect or breach available to the Trustee on behalf of the Certificateholders.

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(b) Any substitution of Replacement Mortgage Loans for Deleted Mortgage Loans made pursuant to Section 2.04(a) above must be effected prior to the last Business Day that is within two years after the Closing Date. As to any Deleted Mortgage Loan for which the Seller substitutes a Replacement Mortgage Loan or Loans, such substitution shall be effected by delivering to the Custodian, on behalf of the Trustee, for such Replacement Mortgage Loan or Loans, the related Mortgage Note, the related Mortgage, the related Assignment of Mortgage to the Trustee, and such other documents and agreements, with all necessary endorsements thereon, together with an Officers’ Certificate stating that each such Replacement Mortgage Loan satisfies the definition thereof and specifying the Substitution Amount (as described below), if any, in connection with such substitution. The Custodian shall acknowledge receipt for such Replacement Mortgage Loan and, within 45 days thereafter, shall review such Mortgage Documents as specified in the Custodial Agreement and deliver to the Trustee and the Depositor, with respect to such Replacement Mortgage Loans, a certification substantially in the form of a revised Trust Receipt, with any exceptions noted thereon. Within one year of the date of substitution, the Custodian shall deliver to the Trustee and the Depositor a certification substantially in the form of a revised Final Trust Receipt, with respect to such Replacement Mortgage Loans, with any exceptions noted thereon. Monthly Payments due with respect to Replacement Mortgage Loans in the month of substitution shall not be included as part of the Trust Fund and shall be retained by the Seller. For the month of substitution, distributions to the Certificateholders shall reflect the collections and recoveries in respect of such Deleted Mortgage in the Due Period preceding the month of substitution and the Seller shall thereafter be entitled to retain all amounts subsequently received in respect of such Deleted Mortgage Loan. Upon such substitution, such Replacement Mortgage Loan shall constitute part of the Trust Fund and shall be subject in all respects to the terms of this Agreement and the Mortgage Loan Purchase and Sale Agreement, including all representations and warranties thereof included in the Mortgage Loan Purchase and Sale Agreement, in each case as of the date of substitution.

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For any month in which the Seller substitutes one or more Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the related Servicer shall determine the excess (each, a “Substitution Amount”), if any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans exceeds the aggregate Stated Principal Balance of the Replacement Mortgage Loans replacing such Deleted Mortgage Loans, together with one month’s interest on such excess amount at the applicable Net Mortgage Rate. On the date of such substitution, the Seller, as applicable, shall deliver or cause to be delivered to the Servicer for deposit in the Collection Account an amount equal to the related Substitution Amount, if any, and the Custodian, on behalf of the Trustee, upon receipt of the related Replacement Mortgage Loan or Loans and certification by the Servicer of such deposit, shall release to the Seller the related Trustee Mortgage File or Files and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the Seller shall deliver to it and as shall be necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.

In addition, the Seller shall obtain at its own expense and deliver to the Trustee and the Securities Administrator an Opinion of Counsel to the effect that such substitution (either specifically or as a class of transactions) shall not cause an Adverse REMIC Event. If such Opinion of Counsel can not be delivered, then such substitution may only be effected at such time as the required Opinion of Counsel can be given.

(c) Upon discovery by the Seller, the Depositor or the Trustee that any Mortgage Loan does not constitute a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code, the party discovering such fact shall within two Business Days give written notice thereof to the other parties. In connection therewith, the applicable party shall repurchase or, subject to the limitations set forth in Section 2.04(b), substitute one or more Replacement Mortgage Loans for the affected Mortgage Loan within 90 days of the earlier of discovery or receipt of such notice with respect to such affected Mortgage Loan. Any such repurchase or substitution shall be made in the same manner as set forth in Section 2.04(a) above. The Trustee shall re-convey to the Seller the Mortgage Loan to be released pursuant hereto in the same manner, and on the same terms and conditions, as it would a Mortgage Loan repurchased for breach of a representation or warranty.

(d) The Seller indemnifies and holds the Trust Fund, the Master Servicer, the Securities Administrator, the Trustee, the Depositor and each Certificateholder harmless against any and all taxes, claims, losses, penalties, fines, forfeitures, reasonable legal fees and related costs, judgments, and any other costs, fees and expenses that the Trust Fund, the Trustee, the Master Servicer, the Securities Administrator, the Depositor and any Certificateholder may sustain in connection with any actions of such party relating to a repurchase of a Mortgage Loan other than in compliance with the terms of this Section 2.04 and the Mortgage Loan Purchase and Sale Agreement, to the extent that any such action causes an Adverse REMIC Event.

Section 2.05 [Reserved.]

Section 2.06 Grant Clause.

(a) It is intended that the conveyance of the Depositor’s right, title and interest in and to property constituting the Trust Fund pursuant to this Agreement shall constitute, and shall be construed as, a sale of such property and not a grant of a security interest to secure a loan. However, if such conveyance is deemed to be in respect of a loan, it is intended that: (1) the rights and obligations of the parties shall be established pursuant to the terms of this Agreement; (2) the Depositor hereby grants to the Trustee for the benefit of the Holders of the Certificates a first priority security interest in all of the Depositor’s right, title and interest in, to and under, whether now owned or hereafter acquired, the Trust Fund and all proceeds of any and all property constituting the Trust Fund to secure payment of the Certificates; and (3) this Agreement shall constitute a security agreement under applicable law. If such conveyance is deemed to be in respect of a loan and the trust created by this Agreement terminates prior to the satisfaction of the claims of any Person holding any Certificate, the security interest created hereby shall continue in full force and effect and the Trustee shall be deemed to be the collateral agent for the benefit of such Person, and all proceeds shall be distributed as herein provided.

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(b) The Depositor shall, to the extent consistent with this Agreement, take such reasonable actions as may be necessary to ensure that, if this Agreement were deemed to create a security interest in the Mortgage Loans and the other property described above, such security interest would be deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of this Agreement. The Depositor will, at its own expense, make all initial filings on or about the Closing Date and shall forward a copy of such filing or filings to the Trustee. Without limiting the generality of the foregoing, the Depositor shall prepare and forward for filing, or shall cause to be forwarded for filing, at the expense of the Depositor, all filings necessary to maintain the effectiveness of any original filings necessary under the relevant UCC to perfect the Trustee’s security interest in or lien on the Mortgage Loans, including without limitation (x) continuation statements, and (y) such other statements as may be occasioned by (1) any change of name of the Seller, the Depositor or the Trustee, (2) any change of location of the place of business or the chief executive office of the Seller or the Depositor, (3) any transfer of any interest of the Seller or the Depositor in any Mortgage Loan or (4) any change under the relevant UCC or other applicable laws. Neither of the Seller nor the Depositor shall organize under the law of any jurisdiction other than the State under which each is organized as of the Closing Date (whether changing its jurisdiction of organization or organizing under an additional jurisdiction) without giving 30 days prior written notice of such action to its immediate and intermediate transferee, including the Trustee. Before effecting such change, the Seller or the Depositor proposing to change its jurisdiction of organization shall prepare and file in the appropriate filing office any financing statements or other statements necessary to continue the perfection of the interests of its immediate and mediate transferees, including the Trustee, in the Mortgage Loans. In connection with the transactions contemplated by this Agreement, each of the Seller and the Depositor authorizes its immediate or mediate transferee to file in any filing office any initial financing statements, any amendments to financing statements, any continuation statements, or any other statements or filings described in this paragraph (b).

On or before March 1 of each calendar year, beginning in 20__, the Depositor shall furnish to the Trustee and the Securities Administrator an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to any filings necessary to maintain the effectiveness of any original filings necessary under the relevant UCC to perfect the Trustee’s security interest in or lien on the Mortgage Loans, or stating that, in the opinion of such counsel, no such action is necessary to maintain such lien and security interest. Such Opinion of Counsel shall also describe the execution and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain such lien and security interest until March 1 in the following calendar year.

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ARTICLE III

THE CERTIFICATES

Section 3.01 The Certificates.

(a) The Certificates shall be issuable in registered form only and shall be securities governed by Article 8 of the New York Uniform Commercial Code. The Certificates will be evidenced by one or more certificates, beneficial ownership of which will be held in the minimum denominations in Certificate Principal Amount or Notional Amount specified in the Preliminary Statement to this Agreement and in integral multiples of $1 in excess thereof, or in the Percentage Interests specified in the Preliminary Statement to this Agreement, as applicable.

(b) The Certificates shall be executed by manual or facsimile signature on behalf of the Trustee by an authorized officer of the Securities Administrator. Each Certificate shall, on original issue, be authenticated by the Authenticating Agent upon the order of the Depositor upon receipt by the Trustee or its Custodian of the Trustee Mortgage Files described in Section 2.01. No Certificate shall be entitled to any benefit under this Agreement, or be valid for any purpose, unless there appears on such Certificate a certificate of authentication substantially in the form provided for herein, executed by an authorized officer of the Authenticating Agent, by manual signature, and such certification upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly authenticated and delivered hereunder. All Certificates shall be dated the date of their authentication. At any time and from time to time after the execution and delivery of this Agreement, the Depositor may deliver Certificates executed by the Trustee to the Authenticating Agent for authentication and the Authenticating Agent shall authenticate and deliver such Certificates as in this Agreement provided and not otherwise.

(c) The Class B-4, Class B-5, Class B-6 and Class LT-R Certificates offered and sold in reliance on the exemption from registration under Rule 144A under the Securities Act shall be issued initially in definitive, fully registered form without interest coupons with the applicable legends set forth in Exhibit A added to the forms of such Certificates (each, a “Restricted Global Security”).

Section 3.02 Registration.

The Securities Administrator is hereby appointed, and the Securities Administrator hereby accepts its appointment as, initial Certificate Registrar in respect of the Certificates and shall maintain books for the registration and for the transfer of Certificates (the “Certificate Register”). The Trustee may appoint a bank or trust company to act as successor Certificate Registrar. A registration book shall be maintained for the Certificates collectively. The Certificate Registrar may resign or be discharged or removed and a new successor may be appointed in accordance with the procedures and requirements set forth in Sections 6.06 and 6.07 hereof with respect to the resignation, discharge or removal of the Securities Administrator and the appointment of a successor Securities Administrator. The Certificate Registrar may appoint, by a written instrument delivered to the Holders and the Master Servicer, any bank or trust company to act as co-registrar under such conditions as the Certificate Registrar may prescribe; provided, however, that the Certificate Registrar shall not be relieved of any of its duties or responsibilities hereunder by reason of such appointment.

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Section 3.03 Transfer and Exchange of Certificates.

(a) A Certificate (other than Book-Entry Certificates which shall be subject to Section 3.09 hereof) may be transferred by the Holder thereof only upon presentation and surrender of such Certificate at the office of the Certificate Registrar duly endorsed or accompanied by an assignment duly executed by such Holder or his duly authorized attorney in such form as shall be satisfactory to the Certificate Registrar. Upon the transfer of any Certificate in accordance with the preceding sentence, the Trustee shall execute, and the Authenticating Agent shall authenticate and deliver to the transferee, one or more new Certificates of the same Class and evidencing, in the aggregate, the same aggregate Certificate Principal Amount (or Notional Amount) as the Certificate being transferred. No service charge shall be made to a Certificateholder for any registration of transfer of Certificates, but the Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any registration of transfer of Certificates.

(b) A Certificate may be exchanged by the Holder thereof for any number of new Certificates of the same Class, in authorized denominations, representing in the aggregate the same Certificate Principal Amount (or Notional Amount) as the Certificate surrendered, upon surrender of the Certificate to be exchanged at the office of the Certificate Registrar duly endorsed or accompanied by a written instrument of transfer duly executed by such Holder or his duly authorized attorney in such form as is satisfactory to the Certificate Registrar. Certificates delivered upon any such exchange will evidence the same obligations, and will be entitled to the same rights and privileges, as the Certificates surrendered. No service charge shall be made to a Certificateholder for any exchange of Certificates, but the Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any exchange of Certificates. Whenever any Certificates are so surrendered for exchange, the Trustee shall execute, and the Authenticating Agent shall authenticate, date and deliver the Certificates which the Certificateholder making the exchange is entitled to receive.

(c) By acceptance of a Restricted Certificate, whether upon original issuance or subsequent transfer, each Holder of such a Certificate acknowledges the restrictions on the transfer of such Certificate set forth thereon and agrees that it will transfer such a Certificate only as provided herein.

The following restrictions shall apply with respect to the transfer and registration of transfer of a Restricted Certificate to a transferee that takes delivery in the form of a Definitive Certificate:

(i) The Certificate Registrar shall register the transfer of a Restricted Certificate if the requested transfer is (x) to the Depositor or an affiliate (as defined in Rule 405 under the Securities Act) of the Depositor or (y) being made to a “qualified institutional buyer” (a “QIB”) as defined in Rule 144A under the Securities Act by a transferor that has provided the Certificate Registrar with a certificate in the form of Exhibit E-2 hereto; and

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(ii) The Certificate Registrar shall register the transfer of a Restricted Certificate if the requested transfer is being made to an “accredited investor” under Rule 501(a)(1), (2), (3) or (7) under the Securities Act, or to any Person all of the equity owners in which are such accredited investors, by a transferor who furnishes to the Certificate Registrar a letter of the transferee substantially in the form of Exhibit F hereto.

(d) The Certificate Registrar shall not register the transfer of any Class LT-R Certificate to RWT Holdings, Inc., Sequoia Residential Funding, Inc., Redwood Mortgage Funding, Inc., Redwood Trust, Inc. (each a “Restricted Holder”) or any successor in interest thereto.

(e) (i) No transfer of an ERISA-Restricted Certificate in the form of a Definitive Certificate shall be made to any Person or shall be effective unless the Certificate Registrar, on behalf of the Trustee, has received (A) a certificate substantially in the form of Exhibit G hereto (or Exhibit B, in the case of a Residual Certificate) from such transferee or (B) an Opinion of Counsel satisfactory to the Certificate Registrar to the effect that the purchase and holding of such a Certificate will not constitute or result in prohibited transactions under Title I of ERISA or Section 4975 of the Code and will not subject the Certificate Registrar, the Trustee, the Master Servicer, the Depositor or the Securities Administrator to any obligation in addition to those undertaken in this Agreement; provided, however, that the Certificate Registrar will not require such certificate or opinion in the event that, as a result of a change of law or otherwise, counsel satisfactory to the Certificate Registrar has rendered an opinion to the effect that the purchase and holding of an ERISA-Restricted Certificate by a Plan or a Person that is purchasing or holding such a Certificate with the assets of a Plan will not constitute or result in a prohibited transaction under Title I of ERISA or Section 4975 of the Code. Each Transferee of an ERISA-Restricted Certificate that is a Book-Entry Certificate shall be deemed to have made the representations set forth in Exhibit G. The preparation and delivery of the certificate and opinions referred to above shall not be an expense of the Trust Fund, the Certificate Registrar, the Trustee, the Master Servicer, the Depositor or the Securities Administrator.

Notwithstanding the foregoing, no opinion or certificate shall be required for the initial issuance of the ERISA-Restricted Certificates. The Certificate Registrar shall have no obligation to monitor transfers of Book-Entry Certificates that are ERISA-Restricted Certificates and shall have no liability for transfers of such Certificates in violation of the transfer restrictions. The Certificate Registrar shall be under no liability to any Person for any registration of transfer of any ERISA-Restricted Certificate that is in fact not permitted by this Section 3.03(e) and none of the Securities Administrator, the Trustee or the Paying Agent shall have any liability for making any payments due on such Certificate to the Holder thereof or taking any other action with respect to such Holder under the provisions of this Agreement so long as the transfer was registered by the Certificate Registrar in accordance with the foregoing requirements. The Securities Administrator, on behalf of the Trustee, shall be entitled, but not obligated, to recover from any Holder of any ERISA-Restricted Certificate that was in fact a Plan or a Person acting on behalf of a Plan any payments made on such ERISA-Restricted Certificate at and after either such time. Any such payments so recovered by the Securities Administrator, on behalf of the Trustee, shall be paid and delivered by the Securities Administrator, on behalf of the Trustee, to the last preceding Holder of such Certificate that is not such a Plan or Person acting on behalf of a Plan.

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(ii) No transfer of an ERISA-Restricted Purchase Option Certificate shall be made unless the Certificate Registrar shall have received a representation letter from the transferee of such ERISA-Restricted Purchase Option Certificate, substantially in the form set forth in Exhibit G hereto, to the effect that either (i) such transferee is neither a Plan nor a Person acting on behalf of any such Plan or using the assets of any such Plan to effect such transfer or (ii) the acquisition and holding of the ERISA-Restricted Purchase Option Certificate are eligible for exemptive relief under the statutory exemption for nonfiduciary service providers under Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code, Prohibited Transaction Class Exemption ("PTCE") 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60 or PTCE 96-23 or some other applicable exemption. Notwithstanding anything else to the contrary herein, any purported transfer of an ERISA-Restricted Purchase Option Certificate to or on behalf of a Plan without the delivery to the Certificate Registrar of a representation letter as described above shall be void and of no effect. If the ERISA-Restricted Purchase Option Certificate is a Book-Entry Certificate, the transferee will be deemed to have made a representation as provided in clause (i) or (ii) of this paragraph, as applicable.

If any ERISA-Restricted Purchase Option Certificate, or any interest therein, is acquired or held in violation of the provisions of the preceding paragraph, the next preceding permitted beneficial owner will be treated as the beneficial owner of that ERISA-Restricted Purchase Option Certificate, retroactive to the date of transfer to the purported beneficial owner. Any purported beneficial owner whose acquisition or holding of an ERISA-Restricted Purchase Option Certificate, or interest therein, was effected in violation of the provisions of the preceding paragraph shall indemnify to the extent permitted by law and hold harmless the Depositor and the Certificate Registrar from and against any and all liabilities, claims, costs or expenses incurred by such parties as a result of such acquisition or holding.

To the extent permitted under applicable law (including, but not limited to, ERISA), the Certificate Registrar shall be under no liability to any Person for any registration of transfer of any ERISA-Restricted Purchase Option Certificate that is in fact not permitted by this Section 3.03(e)(ii) or for making any payments due on such ERISA-Restricted Purchase Option Certificate to the Holder thereof or taking any other action with respect to such Holder under the provisions of this Agreement so long as the transfer was registered by the Certificate Registrar in accordance with the foregoing requirements.

(f) As a condition of the registration of transfer or exchange of any Certificate, the Certificate Registrar may require the certified taxpayer identification number of the owner of the Certificate and the payment of a sum sufficient to cover any tax or other governmental charge imposed in connection therewith; provided, however, that the Certificate Registrar shall have no obligation to require such payment or to determine whether or not any such tax or charge may be applicable. No service charge shall be made to the Certificateholder for any registration, transfer or exchange of a Certificate.

(g) Notwithstanding anything to the contrary contained herein, no Residual Certificate may be owned, pledged or transferred, directly or indirectly, by or to (i) a Disqualified Organization or (ii) an individual, corporation or partnership or other person unless such person is (A) not a Non-U.S. Person or (B) is a Non-U.S. Person that holds a Residual Certificate in connection with the conduct of a trade or business within the United States and has furnished the transferor and the Certificate Registrar with an effective Internal Revenue Service Form W-8ECI or successor form at the time and in the manner required by the Code (any such person who is not covered by clause (A) or (B) above is referred to herein as a “Non-permitted Foreign Holder”).

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Prior to and as a condition of the registration of any transfer, sale or other disposition of a Residual Certificate, the proposed transferee shall deliver to the Certificate Registrar, on behalf of the Trustee, an affidavit in substantially the form attached hereto as Exhibit B representing and warranting, among other things, that such transferee is neither a Disqualified Organization, an agent or nominee acting on behalf of a Disqualified Organization, nor a Non-permitted Foreign Holder (any such transferee, a “Permitted Transferee”), and the proposed transferor shall deliver to the Certificate Registrar an affidavit in substantially the form attached hereto as Exhibit C. In addition, the Certificate Registrar may (but shall have no obligation to) require, prior to and as a condition of any such transfer, the delivery by the proposed transferee of an Opinion of Counsel, addressed to the Certificate Registrar, that such proposed transferee or, if the proposed transferee is an agent or nominee, the proposed beneficial owner, is not a Disqualified Organization, agent or nominee thereof, or a Non-permitted Foreign Holder. Notwithstanding the registration in the Certificate Register of any transfer, sale, or other disposition of a Residual Certificate to a Disqualified Organization, an agent or nominee thereof, or Non-permitted Foreign Holder, such registration shall be deemed to be of no legal force or effect whatsoever and such Disqualified Organization, agent or nominee thereof, or Non-permitted Foreign Holder shall not be deemed to be a Certificateholder for any purpose hereunder, including, but not limited to, the receipt of distributions on such Residual Certificate. The Depositor, the Certificate Registrar and the Trustee shall be under no liability to any Person for any registration or transfer of a Residual Certificate to a Disqualified Organization, agent or nominee thereof or Non-permitted Foreign Holder or for the Paying Agent making any payments due on such Residual Certificate to the Holder thereof or for taking any other action with respect to such Holder under the provisions of this Agreement, so long as the transfer was effected in accordance with this Section 3.03(g), unless the Certificate Registrar shall have actual knowledge at the time of such transfer or the time of such payment or other action that the transferee is a Disqualified Organization, or an agent or nominee thereof, or Non-permitted Foreign Holder. The Certificate Registrar shall be entitled to recover from any Holder of a Residual Certificate that was a Disqualified Organization, agent or nominee thereof, or Non-permitted Foreign Holder at the time it became a Holder or any subsequent time it became a Disqualified Organization, agent or nominee thereof, or Non-permitted Foreign Holder, all payments made on such Residual Certificate at and after either such times (and all costs and expenses, including but not limited to attorneys’ fees, incurred in connection therewith). Any payment (not including any such costs and expenses) so recovered by the Certificate Registrar shall be paid and delivered to the last preceding Holder of such Residual Certificate.

If any purported transferee shall become a registered Holder of a Residual Certificate in violation of the provisions of this Section 3.03(g), then upon receipt of written notice to the Certificate Registrar that the registration of transfer of such Residual Certificate was not in fact permitted by this Section 3.03(g), the last preceding Permitted Transferee shall be restored to all rights as Holder thereof retroactive to the date of such registration of transfer of such Residual Certificate. The Depositor, the Certificate Registrar, the Securities Administrator and the Trustee shall be under no liability to any Person for any registration of transfer of a Residual Certificate that is in fact not permitted by this Section 3.03(g), or for the Paying Agent making any payment due on such Certificate to the registered Holder thereof or for taking any other action with respect to such Holder under the provisions of this Agreement so long as the transfer was registered upon receipt of the affidavit described in the preceding paragraph of this Section 3.03(g).

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(h) Each Holder or Certificate Owner of a Restricted Certificate, ERISA-Restricted Certificate or Residual Certificate, or an interest therein, by such Holder’s or Owner’s acceptance thereof, shall be deemed for all purposes to have consented to the provisions of this section.

Section 3.04 Cancellation of Certificates.

Any Certificate surrendered for registration of transfer or exchange shall be cancelled and retained in accordance with normal retention policies with respect to cancelled certificates maintained by the Trustee or the Certificate Registrar.

Section 3.05 Replacement of Certificates.

If (i) any Certificate is mutilated and is surrendered to the Certificate Registrar or (ii) the Certificate Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Certificate, and there is delivered to the Certificate Registrar such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Depositor, the Trustee or the Certificate Registrar that such destroyed, lost or stolen Certificate has been acquired by a protected purchaser, the Trustee shall execute and the Authenticating Agent shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like tenor and Certificate Principal Amount. Upon the issuance of any new Certificate under this Section 3.05, the Trustee, the Depositor, the Certificate Registrar or the Securities Administrator may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee, the Depositor, the Certificate Registrar or the Securities Administrator) connected therewith. Any replacement Certificate issued pursuant to this Section 3.05 shall constitute complete and indefeasible evidence of ownership in the applicable Trust Fund, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time.

If after the delivery of such new Certificate, a protected purchaser of the original Certificate in lieu of which such new Certificate was issued presents for payment such original Certificate, the Depositor, the Securities Administrator, the Certificate Registrar and the Trustee or any agent shall be entitled to recover such new Certificate from the Person to whom it was delivered or any Person taking therefrom, except a protected purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expenses incurred by the Depositor, the Certificate Registrar, the Securities Administrator, the Trustee or any agent in connection therewith.

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Section 3.06 Persons Deemed Owners.

Subject to the provisions of Section 3.09 with respect to Book-Entry Certificates, the Depositor, the Securities Administrator, the Master Servicer, the Trustee, the Certificate Registrar, the Paying Agent and any agent of any of them shall treat the Person in whose name any Certificate is registered upon the books of the Certificate Registrar as the owner of such Certificate for the purpose of receiving distributions pursuant to Sections 5.01 and 5.02 and for all other purposes whatsoever, and none of the Depositor, the Master Servicer, the Securities Administrator, the Trustee, the Certificate Registrar, the Paying Agent or any agent of any of them shall be affected by notice to the contrary.

Section 3.07 Temporary Certificates.

(a) Pending the preparation of definitive Certificates, upon the order of the Depositor, the Trustee shall execute and the Authenticating Agent shall authenticate and deliver temporary Certificates that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Certificates in lieu of which they are issued and with such variations as the authorized officers executing such Certificates may determine, as evidenced by their execution of such Certificates.

(b) If temporary Certificates are issued, the Depositor will cause definitive Certificates to be prepared without unreasonable delay. After the preparation of definitive Certificates, the temporary Certificates shall be exchangeable for definitive Certificates upon surrender of the temporary Certificates at the office or agency of the Certificate Registrar without charge to the Holder. Upon surrender for cancellation of any one or more temporary Certificates, the Trustee shall execute and the Authenticating Agent shall authenticate and deliver in exchange therefor a like aggregate Certificate Principal Amount of definitive Certificates of the same Class in the authorized denominations. Until so exchanged, the temporary Certificates shall in all respects be entitled to the same benefits under this Agreement as definitive Certificates of the same Class.

Section 3.08 Appointment of Paying Agent.

The Trustee may appoint a Paying Agent (which may be the Trustee) for the purpose of making distributions to the Certificateholders hereunder. The Trustee hereby appoints the Securities Administrator as the initial Paying Agent. The Trustee shall cause any Paying Agent, other than the Securities Administrator, to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee and the Securities Administrator that such Paying Agent will hold all sums held by it for the payment to the Certificateholders in an Eligible Account (which shall be the Distribution Account) in trust for the benefit of the Certificateholders entitled thereto until such sums shall be paid to the Certificateholders. All funds remitted by the Securities Administrator to any such Paying Agent for the purpose of making distributions shall be paid to the Certificateholders on each Distribution Date and any amounts not so paid shall be returned on such Distribution Date to the Securities Administrator. If the Paying Agent is not the Securities Administrator, the Securities Administrator shall cause to be remitted to the Paying Agent on or before the Business Day prior to each Distribution Date, by wire transfer in immediately available funds, the funds to be distributed on such Distribution Date. Any Paying Agent shall be either a bank or trust company or otherwise authorized under law to exercise corporate trust powers.

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Section 3.09 Book-Entry Certificates.

(a) Each Class of Book-Entry Certificates, upon original issuance, shall be issued in the form of one or more typewritten Certificates representing the Book-Entry Certificates. The Book-Entry Certificates shall initially be registered on the Certificate Register in the name of the nominee of the Clearing Agency, and no Certificate Owner will receive a definitive certificate representing such Certificate Owner’s interest in the Book-Entry Certificates, except as provided in Section 3.09(c). Unless Definitive Certificates have been issued to Certificate Owners of Book-Entry Certificates pursuant to Section 3.09(c):

(i) the provisions of this Section 3.09 shall be in full force and effect;

(ii) the Certificate Registrar, the Securities Administrator, the Paying Agent and the Trustee shall deal with the Clearing Agency for all purposes (including the making of distributions on the Book-Entry Certificates) as the authorized representatives of the Certificate Owners and the Clearing Agency and shall be responsible for crediting the amount of such distributions to the accounts of such Persons entitled thereto, in accordance with the Clearing Agency’s normal procedures;

(iii) to the extent that the provisions of this Section 3.09 conflict with any other provisions of this Agreement, the provisions of this Section 3.09 shall control; and

(iv) the rights of Certificate Owners shall be exercised only through the Clearing Agency and the Clearing Agency Participants and shall be limited to those established by law and agreements between such Certificate Owners and the Clearing Agency and/or the Clearing Agency Participants. Unless and until Definitive Certificates are issued pursuant to Section 3.09(c), the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit distributions of principal of and interest on the Book-Entry Certificates to such Clearing Agency Participants.

(b) Whenever notice or other communication to the Certificateholders is required under this Agreement, unless and until Definitive Certificates shall have been issued to Certificate Owners pursuant to Section 3.09(c), the Securities Administrator shall give all such notices and communications specified herein to be given to Holders of the Book-Entry Certificates to the Clearing Agency.

(c) If (i) (A) the Clearing Agency or the Depositor advises the Paying Agent in writing that the Clearing Agency is no longer willing or able to discharge properly its responsibilities with respect to the Book-Entry Certificates, and (B) the Depositor is unable to locate a qualified successor satisfactory to the Depositor and the Paying Agent or (ii) after the occurrence of an Event of Default, Certificate Owners representing beneficial interests aggregating not less than 50% of the Class Principal Amount of a Class of Book-Entry Certificates advise the Paying Agent and the Clearing Agency through the Clearing Agency Participants in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interests of the Certificate Owners of a Class of Book-Entry Certificates (each such event, a “Book-Entry Termination”), the Certificate Registrar shall notify the Clearing Agency to effect notification to all Certificate Owners, through the Clearing Agency, of the occurrence of any such event and of the availability of Definitive Certificates to Certificate Owners requesting the same. Upon surrender to the Certificate Registrar of the Book-Entry Certificates by the Clearing Agency, accompanied by registration instructions from the Clearing Agency for registration, the Certificate Registrar shall issue the Definitive Certificates. None of the Depositor, the Certificate Registrar, the Securities Administrator or the Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Certificates all references herein to obligations imposed upon or to be performed by the Clearing Agency shall be deemed to be imposed upon and performed by the Certificate Registrar, to the extent applicable, with respect to such Definitive Certificates and the Certificate Registrar shall recognize the holders of the Definitive Certificates as Certificateholders hereunder. Notwithstanding the foregoing, the Certificate Registrar, upon the instruction of the Depositor, shall have the right to issue Definitive Certificates on the Closing Date in connection with credit enhancement programs.

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ARTICLE IV

ADMINISTRATION OF THE TRUST FUND

Section 4.01 Collection Accounts; Distribution Account.

(a) On or prior to the Closing Date, the Master Servicer shall have caused the Servicers to establish and maintain one or more Collection Accounts, as provided in the related Servicing Agreements, into which all Scheduled Payments and unscheduled payments with respect to the Mortgage Loans, net of any deductions or reimbursements permitted under the related Servicing Agreement, shall be deposited. On each Distribution Account Deposit Date, the Servicers shall remit to the Securities Administrator for deposit into the Distribution Account, all amounts so required to be deposited into such account in accordance with the terms of the related Servicing Agreement.

(b) The Securities Administrator, as Paying Agent for the Trustee, shall establish and maintain an Eligible Account entitled “Distribution Account of [                        ], as Trustee for the benefit of Sequoia Mortgage Trust 20__-_ Holders of Mortgage Pass-Through Certificates.” The Securities Administrator shall, promptly upon receipt from the Servicers on each Distribution Account Deposit Date, deposit into the Distribution Account and retain on deposit until the related Distribution Date the following amounts:

(i) the aggregate of collections with respect to the Mortgage Loans remitted by the Servicers from the related Collection Accounts in accordance with the Servicing Agreements;

(ii) any amounts required to be deposited by the Master Servicer with respect to the Mortgage Loans for the related Due Period pursuant to this Agreement, including the amount of any Advances or Compensation Interest Payments with respect to the Mortgage Loans not paid by the Servicers; and

(iii) any other amounts so required to be deposited in the Distribution Account in the related Due Period pursuant to this Agreement.

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(c) In the event the Master Servicer or a Servicer has remitted in error to the Distribution Account any amount not required to be remitted in accordance with the definition of Available Distribution Amount, it may at any time direct the Securities Administrator to withdraw such amount from the Distribution Account for repayment to the Master Servicer or Servicer, as applicable, by delivery of an Officer’s Certificate to the Securities Administrator which describes the amount deposited in error.

(d) On each Distribution Date and final Distribution Date of the Certificates in accordance with Section 7.01, the Securities Administrator, as Paying Agent, shall distribute the Available Distribution Amount to the Certificateholders and any other parties entitled thereto in the amounts and priorities set forth in Section 5.02. The Securities Administrator may from time to time withdraw from the Distribution Account and pay the Master Servicer, the Trustee, the Securities Administrator or any Servicer any amounts permitted to be paid or reimbursed to such Person from funds in the Distribution Account pursuant to the clauses (A) through (D) of the definition of Available Distribution Amount.

(e) Funds in the Distribution Account may be invested in Permitted Investments selected by and at the written direction of the Securities Administrator, which shall mature not later than one Business Day prior to the Distribution Date (except that if such Permitted Investment is an obligation of the Securities Administrator, then such Permitted Investment shall mature not later than such applicable Distribution Date) and any such Permitted Investment shall not be sold or disposed of prior to its maturity. All such Permitted Investments shall be made in the name of the Trustee (in its capacity as such) or its nominee. All income and gain realized from any Permitted Investment shall be for the benefit of the Securities Administrator, as additional compensation for its duties hereunder, and shall be subject to its withdrawal or order from time to time, and shall not be part of the Trust Fund. The amount of any losses incurred in respect of any such investments shall be deposited in such Distribution Account by the Securities Administrator out of its own funds, without any right of reimbursement therefor, immediately as realized.

Section 4.02 Reports to Trustee and Certificateholders.

On each Distribution Date, the Securities Administrator shall have prepared and shall make available to the Trustee and each Certificateholder a written report setting forth the following information (on the basis of Mortgage Loan level information obtained from the Master Servicer and the Servicers) (the “Distribution Date Statement”):

(a) the amount of the distributions, separately identified, with respect to each Class of Certificates;

(b) the amount of the distributions set forth in the clause (a) allocable to principal, separately identifying the aggregate amount of any Principal Prepayments or other unscheduled recoveries of principal included in that amount;

(c) the amount of the distributions set forth in the clause (a) allocable to interest and how it was calculated;

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(d) the amount of any unpaid Interest Shortfall, Net Prepayment Interest Shortfalls, Relief Act Shortfalls, Net WAC Shortfall or unpaid Net WAC Shortfall (if applicable) and the related accrued interest thereon, with respect to each Class of Certificates;

(e) the Class Principal Amount of each Class of Certificates after giving effect to the distribution of principal on that Distribution Date;

(f) the Aggregate Stated Principal Balance of each Mortgage Pool (separately and in the aggregate), the Mortgage Rates (in incremental ranges), the Pool 1 Net WAC, the Pool 2 Net WAC, the Pool 3 Net WAC, the Pool 4 Net WAC, the Pool 5 Net WAC and the Subordinate Net WAC, the weighted average life and the weighted average remaining term of the Mortgage Loans, at the beginning and at the end of the related Prepayment Period;

(g) the Stated Principal Balance of the Mortgage Loans with Mortgage Rates that adjust based on the one-month LIBOR index, six-month LIBOR index, one-year LIBOR index and one-year CMT index at the end of the related Prepayment Period;

(h) the Senior Percentage and the Subordinate Percentage for each Mortgage Pool for the following Distribution Date;

(i) the Senior Prepayment Percentage and the Subordinate Prepayment Percentage for each Mortgage Pool for the following Distribution Date;

(j) in the aggregate and with respect to each Mortgage Pool, the amount of the Master Servicing Fee and the Servicing Fee paid to or retained by the Master Servicer and by each Servicer, respectively, and the amount of any fees paid to the Securities Administrator and the Custodian;

(k) in the aggregate and with respect to each Mortgage Pool, the amount of Monthly Advances for the related Due Period;

(l) the number and Stated Principal Balance of the Mortgage Loans that were (A) Delinquent (exclusive of Mortgage Loans in foreclosure) (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, (B) in foreclosure and Delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days and (C) in bankruptcy as of the close of business on the last day of the calendar month preceding that Distribution Date;

(m) the amount of cash flow received for such Distribution Date, and the sources thereof;

(n) in the aggregate and with respect to each Mortgage Pool, for any Mortgage Loan as to which the related Mortgaged Property was an REO Property during the preceding calendar month, the principal balance of such Mortgage Loan as of the close of business on the last day of the related Due Period;

(o) in the aggregate and with respect to each Mortgage Pool, the aggregate number and principal balance of any REO Properties as of the close of business on the last day of the preceding Due Period;

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(p) in the aggregate and with respect to each Mortgage Pool, the amount of Realized Losses incurred during the preceding calendar month;

(q) in the aggregate and with respect to each Mortgage Pool, the cumulative amount of Realized Losses incurred since the Closing Date;

(r) the Realized Losses, if any, allocated to each Class of Certificates on that Distribution Date;

(s) the Certificate Interest Rate for each Class of Certificates for that Distribution Date;

(t) the amount of any Principal Transfer Amounts or Interest Transfer Amounts paid to an Undercollateralized Group;

(u) the applicable Record Date, Accrual Period and calculation date for each Class of Certificates and such Distribution Date; and

(v) the amount on deposit in the Distribution Account as of such Distribution Date (after giving effect to distributions on such date) and as of the prior Distribution Date.

On each Distribution Date, the Securities Administrator shall provide Bloomberg Financial Markets, L.P. (“Bloomberg”) CUSIP level factors for each Class of Offered Certificates as of such Distribution Date, using a format and media mutually acceptable to the Securities Administrator and Bloomberg.

In addition to the information listed above, such Distribution Date Statement shall also include such other information as is required by Form 10-D, including, but not limited to, the information required by Item 1121 (§229.1121) of Regulation AB.

The Securities Administrator shall make such reports available each month via the Master Servicer’s website at http://www.ctslink.com. Assistance in using the website may be obtained by calling the Master Servicer’s customer service desk at 1-866-846-4526. Certificateholders and other parties that are unable to use the website are entitled to have a paper copy mailed to them via first class mail by contacting the Securities Administrator and indicating such. In preparing or furnishing the foregoing information to the Trustee, the Securities Administrator shall be entitled to rely conclusively on the accuracy of the information or data regarding the Mortgage Loans and the related REO Properties that has been provided to the Securities Administrator by the Master Servicer and the Servicers, and the Securities Administrator shall not be obligated to verify, recompute, reconcile or recalculate any such information or data.

Upon request, within a reasonable period of time after the end of each calendar year, the Securities Administrator shall cause to be furnished to each Person who at any time during the calendar year was a Certificateholder, a statement containing the information listed above aggregated for such calendar year or applicable portion thereof during which such Person was a Certificateholder. Such obligation of the Securities Administrator shall be deemed to have been satisfied to the extent that substantially comparable information shall be provided by the Securities Administrator pursuant to any requirements of the Code as from time to time in effect.

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Upon the reasonable advance written request of any Certificateholder that is a savings and loan, bank or insurance company, which request, if received by the Trustee or the Certificate Registrar, shall be promptly forwarded to the Securities Administrator, the Securities Administrator shall provide, or cause to be provided (or, to the extent that such information or documentation is not required to be provided by a Servicer under the applicable Servicing Agreement, shall use reasonable efforts to obtain such information and documentation from such Servicer, and provide) to such Certificateholders such reports and access to information and documentation regarding the Mortgage Loans as such Certificateholders may reasonably deem necessary to comply with applicable regulations of the Office of Thrift Supervision or its successor or other regulatory authorities with respect to an investment in the Certificates; provided, however, that the Securities Administrator shall be entitled to be reimbursed by such Certificateholders for the Securities Administrator’s actual expenses incurred in providing such reports and access.

Section 4.03 Rule 17g-5 Compliance.

(a) The Rule 17g-5 Information Provider shall, upon receipt of an NRSRO certification in the form of Exhibit O, make available on its Rule 17g-5 Website solely to the Depositor, each Rating Agency and to any NRSRO the following items, but only to the extent such items are delivered to it by electronic mail to rmbs17g5informationprovider@wellsfargo.com, specifically with a subject reference of “SEMT 201_-_” and an identification of the type of information being provided in the body of such notice, or any other delivery method established or approved by the Rule 17g-5 Information Provider if or as may be necessary or beneficial, :

(i) any Rating Agency Information provided to the Rule 17g-5 Information Provider in accordance with Sections 6.06, 6.07, 6.14, 9.01, 9.02, 11.03 and 11.12 of this Agreement, as well as reports prepared in accordance with Sections 6.21, 6.22, 6.23 and 6.24 (provided that the Rule 17g-5 Information Provider shall not be required to post to its Rule 17g-5 Website any such information previously posted to and available on the Securities Administrator’s website);

(ii) any notice of any amendment that modifies the procedures herein relating to Exchange Act Rule 17g-5 pursuant to this Agreement; and

(iii) a summary of any oral conversation with a Rating Agency regarding any Mortgage Loan, any Mortgaged Property or any REO Property, to the extent required to be provided pursuant to Rule 17g-5.

The foregoing information shall be made available by the Rule 17g-5 Information Provider on its Rule 17g-5 Website. Such information shall be posted to the Rule 17g-5 Website on the same Business Day as it is received, provided that such information is received by 12:00 p.m. (eastern time) or, if received after 12:00 p.m., on the next Business Day. The Rule 17g-5 Information Provider shall have no obligation or duty to verify, confirm or otherwise determine whether the information being delivered is accurate, complete, conforms to the requirements of this Agreement, or otherwise is or is not anything other than what it purports to be. The Rule 17g-5 Information Provider shall not be deemed to have obtained actual knowledge of any information by virtue of the receipt and posting of such information to the Rule 17g-5 Website. Further, notwithstanding anything to the contrary herein, in the event the Depositor determines that any information previously posted to the Rule 17g-5 Website should not have been posted thereto pursuant to the terms of this Agreement, the Depositor shall direct the Rule 17g-5 Information Provider in writing to remove such information from the Rule 17g-5 Website, such written notice to specify the information to be so removed. The Rule 17g-5 Information Provider (i) shall have no obligation or duty to verify, confirm or otherwise determine the accuracy of the information contained in such written direction, (ii) shall be entitled to rely fully upon such written direction and (iii) shall not be held liable in connection with removing any such information from the Rule 17g-5 Website upon the receipt of such written direction.

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The Rule 17g-5 Information Provider shall provide a mechanism to notify any party that has submitted an NRSRO Certification each time the Rule 17g-5 Information Provider posts an additional document to the Rule 17g-5 Website.

In connection with providing access to the Rule 17g-5 Website, the Rule 17g-5 Information Provider may require registration and the acceptance of a disclaimer. The Rule 17g-5 Information Provider shall not be liable for the dissemination of information in accordance with the terms of this Agreement, makes no representations or warranties as to the accuracy or completeness of such information being made available, has no obligation to review such information, and assumes no responsibility for such information. The Rule 17g-5 Information Provider shall not be liable for its failure to make any information available to each Rating Agency or NRSROs unless such information was delivered to the Rule 17g-5 Information Provider at the email address specified in writing to the Depositor, with a subject heading of “SEMT 201_-_” and sufficient detail to indicate that such information is required to be posted on the Rule 17g-5 Website.

If any NRSRO that has previously submitted an NRSRO Certification and whose NRSRO Certification has been accepted, notifies the Rule 17g-5 Information Provider that it is unable to access information posted to the Rule 17g-5 Website and such access issue is determined to be the result of a problem with the Rule 17g-5 Website, if such access issue is not resolved within one Business Day of such determination, the Rule 17g-5 Information Provider shall so notify the Depositor.

(b) Each of the Master Servicer and the Trustee hereby agrees that, except as otherwise expressly permitted herein, it shall not communicate with (including verbally) or provide information to a Rating Agency without the prior consent of and consultation with the Depositor, and that any permitted communication by it to a Rating Agency will be made by it only in the manner prescribed by the procedures established by the Depositor to ensure compliance with Rule 17g-5 under the Exchange Act, including to the extent set forth herein, providing any such communications to the Depositor for posting on the Rule 17g-5 Website pursuant to this Section 4.03 prior to communicating with such Rating Agency.

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Section 4.04 Rule 15Ga-1 Compliance.

(a) To the extent a Responsible Officer of the Master Servicer receives a demand for the repurchase or substitution of a Mortgage Loan based on a breach of a representation or warranty made by the Seller or the Originator of such Mortgage Loan (each, a “Demand”), the Master Servicer agrees (i) if such Demand is in writing, promptly to forward such Demand to the Trustee, and (ii) if such Demand is oral, to instruct the requesting party to submit such Demand in writing to the Trustee. To the extent a Responsible Officer of the Trustee receives a Demand, it shall provide the Depositor with prompt written notice of such Demand.

(b) In connection with the repurchase or substitution of a Mortgage Loan pursuant to a Demand, any dispute with respect to a Demand, or the withdrawal or final rejection of a Demand (i) the Master Servicer agrees, to the extent a Responsible Officer of the Master Servicer has actual knowledge thereof, promptly to notify the Trustee in writing, and (ii) the Trustee agrees, to the extent a Responsible Officer of the Trustee has actual knowledge thereof, promptly to notify the Depositor in writing.

(c) To the extent in its possession, the Trustee shall provide the Depositor with any applicable information required under Rule 15Ga-1 of the Exchange Act (the “Rule 15Ga-1 Information”) in a timely manner so as to enable the Depositor to meet its reporting obligations under Rule 15Ga-1. The Depositor shall be entitled conclusively to rely on the Rule 15Ga-1 Information provided to it by the Trustee in connection with the compilation by the Depositor of the Rule 15Ga-1 Information required to be reported on Form 10-D. For the avoidance of doubt, the Depositor shall have sole responsibility for compiling the Rule 15Ga-1 Information required to be reported on Form 10-D, and the Securities Administrator shall be entitled conclusively to rely on any Rule 15Ga-1 Information provided to it by the Depositor for inclusion on each Form 10-D.

ARTICLE V

DISTRIBUTIONS TO HOLDERS OF CERTIFICATES

Section 5.01 Distributions Generally.

(a) Subject to Section 7.01 respecting the final distribution on the Certificates, on each Distribution Date the Paying Agent on behalf of the Trustee shall make distributions in accordance with this Article V. Such distributions shall be made by check mailed to each Certificateholder’s address as it appears on the Certificate Register of the Certificate Registrar or, upon written request made to the Securities Administrator at least five Business Days prior to the related Record Date by any Certificateholder owning an aggregate initial Certificate Principal Amount of at least $1,000,000, or in the case of any Class of Interest-Only Certificates or Residual Certificate, a Percentage Interest of not less than 100%, by wire transfer in immediately available funds to an account specified in the request and at the expense of such Certificateholder; provided, however, that the final distribution in respect of any Certificate shall be made only upon presentation and surrender of such Certificate at the Certificate Registrar’s Corporate Trust Office; provided, further, that the foregoing provisions shall not apply to any Class of Certificates as long as such Certificate remains a Book-Entry Certificate in which case all payments made shall be made through the Clearing Agency and its Clearing Agency Participants. Wire transfers will be made at the expense of the Holder requesting such wire transfer by deducting a wire transfer fee from the related distribution. Notwithstanding such final payment of principal of any of the Certificates, each Residual Certificate will remain outstanding until the termination of each REMIC and the payment in full of all other amounts due with respect to the Residual Certificates and at such time such final payment in retirement of any Residual Certificate will be made only upon presentation and surrender of such Certificate at the Certificate Registrar’s Corporate Trust Office. If any payment required to be made on the Certificates is to be made on a day that is not a Business Day, then such payment will be made on the next succeeding Business Day.

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(b) All distributions or allocations made with respect to the Certificateholders within each Class on each Distribution Date shall be allocated among the outstanding Certificates in such Class equally in proportion to their respective initial Class Principal Amounts or initial Class Notional Amounts (or Percentage Interests).

Section 5.02 Distributions from the Distribution Account.

(a) Subject to Sections 5.02(b), (c), (l) and (m), on each Distribution Date, the Available Distribution Amount for the related Mortgage Pool (in the case of the Senior Certificates) and the Mortgage Pools in the aggregate (in the case of the Subordinate Certificates) shall be withdrawn by the Securities Administrator from the Distribution Account and allocated among the Classes of Senior Certificates and Subordinate Certificates in the following order of priority:

(i) Concurrently, from the related Available Distribution Amount, to the payment of the Interest Distribution Amount and any accrued but unpaid Interest Shortfalls on each Class of Senior Certificates of the Related Certificate Group; provided, however, that on each Distribution Date, the amount of interest that would otherwise be distributable to the Class 1-XA Certificates, will be deposited in the Reserve Fund to the extent of the Required Reserve Fund Deposit for such Distribution Date;

(ii) Concurrently, to the Senior Certificates of the Related Certificate Group, from the Available Distribution Amount remaining in the related Mortgage Pool after application of amounts pursuant to clause (i) above, as follows:

(A) first, to the Class 1-AR Certificates, the Senior Principal Distribution Amount for Pool 1, until their Class Principal Amount has been reduced to zero, and second, pro rata, to the Class 1-A1 and Class 1-A2 Certificates, the Senior Principal Distribution Amount for Pool 1, until their respective Class Principal Amounts have been reduced to zero;

(B) pro rata, to the Class 2-A1 and Class 2-A2 Certificates, the Senior Principal Distribution Amount for Pool 2, until their respective Class Principal Amounts have been reduced to zero;

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(C) pro rata, to the Class 3-A1 and Class 3-A2 Certificates, the Senior Principal Distribution Amount for Pool 3, until their respective Class Principal Amounts have been reduced to zero;

(D) pro rata, to the Class 4-A1 and Class 4-A2 Certificates, the Senior Principal Distribution Amount for Pool 4, until their respective Class Principal Amounts have been reduced to zero;

(E) pro rata, to the Class 5-A1 and Class 5-A2 Certificates, the Senior Principal Distribution Amount for Pool 5, until their respective Class Principal Amounts have been reduced to zero;

(iii) to the Subordinate Certificates, sequentially in the following order of priority:

(A) to the Class B-1 Certificates, the Interest Distribution Amount and any Interest Shortfalls, in each case, for such Class on such date;

(B) to the Class B-1 Certificates, such Class’ Subordinate Class Percentage of the aggregate Subordinate Principal Distribution Amount for each Mortgage Pool, until its Class Principal Amount has been reduced to zero;

(C) to the Class B-2 Certificates, the Interest Distribution Amount and any Interest Shortfalls, in each case, for such Class on such date;

(D) to the Class B-2 Certificates, such Class’ Subordinate Class Percentage of the aggregate Subordinate Principal Distribution Amount for each Mortgage Pool, until its Class Principal Amount has been reduced to zero;

(E) to the Class B-3 Certificates, the Interest Distribution Amount and any Interest Shortfalls, in each case, for such Class on such date;

(F) to the Class B-3 Certificates, such Class’ Subordinate Class Percentage of the aggregate Subordinate Principal Distribution Amount for each Mortgage Pool, until its Class Principal Amount has been reduced to zero;

(G) to the Class B-4 Certificates, the Interest Distribution Amount and any Interest Shortfalls, in each case, for such Class on such date;

(H) to the Class B-4 Certificates, such Class’ Subordinate Class Percentage of the aggregate Subordinate Principal Distribution Amount for each Mortgage Pool, until its Class Principal Amount has been reduced to zero;

(I) to the Class B-5 Certificates, the Interest Distribution Amount and any Interest Shortfalls, in each case, for such Class on such date;

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(J) to the Class B-5 Certificates, such Class’ Subordinate Class Percentage of the aggregate Subordinate Principal Distribution Amount for each Mortgage Pool, until its Class Principal Amount has been reduced to zero;

(K) to the Class B-6 Certificates, the Interest Distribution Amount and any Interest Shortfalls, in each case, for such Class on such date;

(L) to the Class B-6 Certificates, such Class’ Subordinate Class Percentage of the aggregate Subordinate Principal Distribution Amount for each Mortgage Pool, until its Class Principal Amount has been reduced to zero; and

(iv) To the Class 1-AR and LT-R Certificates, any remaining amount of the Available Distribution Amount from the Mortgage Pools in the aggregate allocated as provided in Section 5.02(d);

On each Distribution Date, the Securities Administrator shall distribute from the Reserve Fund, pro rata (on the basis of the amount of Net WAC Shortfalls experienced by each such Class of LIBOR Certificates and the aggregate amount of Net WAC Shortfalls experienced by all of the Class 1-A1 and Class 1-A2 Certificates (as a group)), to the Class 1-A1 and Class 1-A2 Certificates, any related Net WAC Shortfalls or related unpaid Net WAC Shortfalls for such date.

(b) On each Distribution Date on and after the Credit Support Depletion Date, the Available Distribution Amount for the Mortgage Pools shall be combined and distributed to the remaining Senior Certificates, first, to pay the Interest Distribution Amount and any accrued but unpaid Interest Shortfalls; second, to pay principal on a pro rata basis; and third, to the Class 1-AR and Class LT-R Certificates, any remaining Available Distribution Amount from such Mortgage Pool or Mortgage Pools.

(c) Notwithstanding the priority and allocation set forth in Section 5.02(a), if with respect to any Class of Subordinate Certificates on any Distribution Date the aggregate of the related Class Subordination Percentages of such Class and of all other Classes of Subordinate Certificates which have a higher numerical Class designation than such Class is less than the Original Applicable Credit Support Percentage for such Class, no distribution of Principal Prepayments shall be made to any such Classes and the amount of such Principal Prepayment otherwise distributable to such Classes shall be distributed to any Classes of Subordinate Certificates having lower numerical Class designations than such Class, pro rata, based on the Class Principal Amounts of the respective Classes immediately prior to such Distribution Date and shall be distributed in the sequential order provided in Section 5.02(a) above.

(d) Amounts distributed to the Residual Certificates pursuant to Section 5.02(a)(iv) on any Distribution Date shall be allocated among the REMIC residual interests represented thereby such that each such interest is allocated the excess of funds available to the related REMIC over required distributions to the regular interests in such REMIC on such Distribution Date; provided, however, that the Class LT-R Certificate shall be entitled to any amounts representing net gain resulting from the sale of any REO Properties or other Liquidation Proceeds due to the Residual Certificates with respect to the Mortgage Loans.

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(e) For purposes of distributions provided in Section 5.02(a), each Mortgage Pool shall “relate” to the Senior Class or Classes of the applicable Related Certificate Group.

(f) [Reserved].

(g) On any Distribution Date for which a Net WAC Shortfall exists with respect to the Class 1-A1 or Class 1-A2 Certificates, the Securities Administrator shall withdraw from the Reserve Fund, the amount for distribution to such Class equal to the lesser of (1) the amount of such Net WAC Shortfall and (2) the amounts credited to the Reserve Fund with respect to the Class 1-XA Certificates as provided in Section 5.02(a).

(h) [Reserved].

(i) [Reserved].

(j) For purposes of distributions of interest in Section 5.02(a) such distributions to a Class of Certificates on any Distribution Date shall be made first, in respect of Current Interest; and second, in respect of Interest Shortfalls.

(k) [Reserved].

(l) Notwithstanding the priority of distributions set forth in Section 5.02(a), if on any Distribution Date prior to the Credit Support Depletion (1) either one of the Rapid Prepayment Conditions is satisfied on such date and (2) the aggregate of the Class Principal Amounts of the Senior Certificates relating to one of the Mortgage Pools has been reduced to zero, then that portion of the Available Distribution Amount for each Mortgage Pool described in Section 5.02(a)(ii) that represents principal collections on the Mortgage Loans shall be applied as an additional distribution to the remaining Classes of Senior Certificates in the other Certificate Group, in reduction of, and in proportion to, the Class Principal Amounts thereof; provided, however, that any such amounts distributable to the Class 1-AR, Class 1-A1 and Class 1-A2 Certificates shall be distributed first, to the Class 1-AR Certificates and, second, pro rata, to the Class 1-A1 and Class 1-A2 Certificates.

(m) If, on any Distribution Date, any Certificate Group would constitute an Undercollateralized Group and the other Certificate Group or Certificate Groups would constitute an Overcollateralized Group, then notwithstanding Section 5.02(a)(ii), the Available Distribution Amount for an Overcollateralized Group, to the extent remaining following distributions of interest and principal to the related Senior Certificates of that Certificate Group shall be distributed, up to the sum of the Interest Transfer Amount and the Principal Transfer Amount for the Undercollateralized Group or Undercollateralized Groups, to the Senior Certificates related to the Undercollateralized Group or Undercollateralized Groups, in payment of accrued but unpaid interest, if any, and then to such Senior Certificates as principal, in the same order and priority as such Certificates would receive other distributions of principal.

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Section 5.03 Allocation of Losses.

(a) On or prior to each Distribution Date, the Master Servicer shall aggregate the information provided by each Servicer with respect to the total amount of Realized Losses experienced on the Mortgage Loans for the related Distribution Date.

(b) On each Distribution Date, the principal portion of Realized Losses shall be allocated as follows:

first, to the Classes of Subordinate Certificates in reverse order of their respective numerical Class designations (beginning with the Class B-6 Certificates and ending with the Class B-1 Certificates) until the Class Principal Amount of each such Class is reduced to zero; and

second, to each Class of Senior Certificates relating to the Mortgage Pool which sustained such loss (allocated among the related Senior Certificates on a pro rata basis), in each case, until the Class Principal Amount of such Class of Senior Certificates is reduced to zero; provided, however, that the amount of Realized Losses calculated above that would otherwise reduce the Class Principal Amount of the Class 1-A1 Certificates will be allocated to the Class 1-A2 Certificates, in reduction of the Class Principal Amount thereof, until the Class Principal Amount of the Class 1-A2 Certificates has been reduced to zero, before reducing the Class Principal Amount of the Class 1-A1 Certificates; provided, further, that the amount of Realized Losses calculated above that would otherwise reduce the Class Principal Amount of the Class 2-A1 Certificates will first reduce the Class Principal Amount of the Class 2-A2 Certificates until the Class Principal Amount of the Class 2-A2 Certificates has been reduced to zero, before reducing the Class Principal Amount of the Class 2-A1 Certificates; provided, further, that the amount of Realized Losses calculated above that would otherwise reduce the Class Principal Amount of the Class 3-A1 Certificates will first reduce the Class Principal Amount of the Class 3-A2 Certificates until the Class Principal Amount of the Class 3-A2 Certificates has been reduced to zero, before reducing the Class Principal Amount of the Class 3-A1 Certificates; provided, further, that the amount of Realized Losses calculated above that would otherwise reduce the Class Principal Amount of the Class 4-A1 Certificates will first reduce the Class Principal Amount of the Class 4-A2 Certificates until the Class Principal Amount of the Class 4-A2 Certificates has been reduced to zero, before reducing the Class Principal Amount of the Class 4-A1 Certificates and provided, further, that the amount of Realized Losses calculated above that would otherwise reduce the Class Principal Amount of the Class 5-A1 Certificates will first reduce the Class Principal Amount of the Class 5-A2 Certificates until the Class Principal Amount of the Class 5-A2 Certificates has been reduced to zero, before reducing the Class Principal Amount of the Class 5-A1 Certificates.

(c) On each Distribution Date, the Class Principal Amount of the Class of Subordinate Certificates then outstanding with the highest numerical Class designation shall be reduced on each Distribution Date by the amount (a “Subordinate Certificate Writedown Amount”), if any, by which the aggregate of the Class Principal Amounts of all outstanding Classes of Certificates (after giving effect to the distribution of principal on such Distribution Date) exceeds the Aggregate Stated Principal Balance for the following Distribution Date.

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(d) Any allocation of a loss pursuant to this section to a Class of Certificates shall be achieved by reducing the Class Principal Amount thereof by the amount of such loss.

(e) Subsequent Recoveries in respect of the Mortgage Loans shall be distributed to the Certificates still outstanding, in accordance with Section 5.02, and the Class Principal Amount of each Class of Certificates then outstanding that has been reduced due to application of a Realized Loss will be increased, in order of seniority, by the amount of such Subsequent Recovery.

Section 5.04 Advances by Master Servicer.

If any Servicer fails to remit any Advance required to be made under the applicable Servicing Agreement after the expiration of any applicable grace period, such event shall constitute a default under the Servicing Agreement, and upon termination of the defaulting Servicer as set forth in Section 9.01, the Master Servicer (in its capacity as successor Servicer) shall make, or the Master Servicer (if it is not the successor Servicer) shall cause the successor Servicer, to make, such Advance in accordance with Section 9.01. The Master Servicer and each Servicer shall be entitled to be reimbursed for all Advances made by it. Notwithstanding anything to the contrary herein, in the event the Master Servicer determines in its reasonable judgment that an Advance is non-recoverable, the Master Servicer shall be under no obligation to make such Advance. If the Master Servicer determines that an Advance is non-recoverable, it shall, on or prior to the related Distribution Date, deliver an Officer’s Certificate to the Trustee to such effect.

Section 5.05 Compensating Interest Payments.

The amount of the aggregate Master Servicing Fees payable to the Master Servicer in respect of any Distribution Date shall be reduced (but not below zero) by the amount of any Compensating Interest Payment for such Distribution Date, but only to the extent that Prepayment Interest Shortfalls relating to such Distribution Date are required to be paid but not actually paid by the Servicers. Such amount shall not be treated as an Advance and shall not be reimbursable to the Master Servicer.

Section 5.06 Reserve Fund

(a) On the Closing Date, the Securities Administrator shall establish and maintain in the Trustee’s name, in trust for the benefit of the holders of the LIBOR Certificates and the Interest-Only Certificates, a Reserve Fund, into which the Depositor shall, on such date, deposit $10,000.00. The Reserve Fund shall be an Eligible Account, and funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. The Reserve Fund shall not be an asset of any REMIC established hereby.

(b) On each Distribution Date, Current Interest that would otherwise be distributable with respect to the Class 1-XA Certificates will be deposited to the Reserve Fund, to the extent of the Required Reserve Fund Deposit.

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(c) On any Distribution Date for which a Net WAC Shortfall exists with respect to the Class 1-A1 or Class 1-A2 Certificates, the Securities Administrator shall withdraw from the Reserve Fund, the amount of such Net WAC Shortfall for distribution on such Distribution Date pursuant to Section 5.02(g).

(d) [Reserved].

(e) [Reserved].

(f) Funds on deposit in the Reserve Fund shall be invested in the [                   ]or any successor fund. Any earnings on amounts in the Reserve Fund shall be for the benefit of the Interest-Only Certificateholders. The Interest-Only Certificates shall evidence ownership of the Reserve Fund for federal income tax purposes and the Holders thereof shall direct the Securities Administrator, in writing, as to investment of amounts on deposit therein. The Interest-Only Certificateholders shall be liable for any losses incurred on such investments. In the absence of written instructions from the Interest-Only Certificateholder(s) as to investment of funds on deposit in the Reserve Fund, such funds shall be invested in money market funds as described in paragraph (ix) of the definition of Permitted Investments in Article I. For federal income tax purposes, amounts transferred by the Upper-Tier REMIC to the Reserve Fund shall be treated as amounts distributed by the Upper-Tier REMIC to the Holders of the Class 1-XA Certificates.

(g) If, immediately after any Distribution Date, the amount credited to the Reserve Fund exceeds the initial credit thereto, the Securities Administrator will debit such excess from the Reserve Fund and distribute such excess from the Reserve Fund to the Interest-Only Certificateholders for which such amounts were credited pursuant to Section 5.02(g).

(h) Upon termination of the Trust Fund any amounts on deposit in the Reserve Fund shall be distributed to the Interest-Only Certificateholders.

ARTICLE VI

CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR; EVENTS OF DEFAULT

Section 6.01 Duties of Trustee and the Securities Administrator.

(a) The Trustee, except during the continuance of an Event of Default and the Securities Administrator undertakes to perform such duties and only such duties as are specifically set forth in this Agreement. Any permissive right of the Trustee or the Securities Administrator provided for in this Agreement shall not be construed as a duty of the Trustee or the Securities Administrator. If an Event of Default has occurred and has not otherwise been cured or waived, the Trustee or the Securities Administrator shall exercise such of the rights and powers vested in it by this Agreement and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs, unless the Trustee is acting as Master Servicer, in which case it shall use the same degree of care and skill as the Master Servicer hereunder.

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(b) Each of the Trustee and the Securities Administrator, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Trustee or the Securities Administrator which are specifically required to be furnished pursuant to any provision of this Agreement, shall examine them to determine whether they are in the form required by this Agreement; provided, however, that neither the Trustee nor the Securities Administrator shall be responsible for the accuracy or content of any such resolution, certificate, statement, opinion, report, document, order or other instrument furnished by the Master Servicer or any Servicer to the Trustee or the Securities Administrator pursuant to this Agreement, and shall not be required to recalculate or verify any numerical information furnished to the Trustee or the Securities Administrator pursuant to this Agreement. Subject to the immediately preceding sentence, if any such resolution, certificate, statement, opinion, report, document, order or other instrument is found not to conform to the form required by this Agreement in a material manner the Trustee or the Securities Administrator, as applicable, shall take such action as it deems appropriate to cause the instrument to be corrected, and if the instrument is not corrected to the Trustee’s or the Securities Administrator’s satisfaction, the Trustee or the Securities Administrator will provide notice thereof to the Certificateholders and will, at the expense of the Trust Fund, which expense shall be reasonable given the scope and nature of the required action, take such further action as directed by the Certificateholders.

(c) Neither the Trustee nor the Securities Administrator shall have any liability arising out of or in connection with this Agreement, except for its negligence or willful misconduct. Notwithstanding anything in this Agreement to the contrary, neither the Trustee nor the Securities Administrator shall be liable for special, indirect or consequential losses or damages of any kind whatsoever (including, but not limited to, lost profits). No provision of this Agreement shall be construed to relieve the Trustee or the Securities Administrator from liability for its own negligent action, its own negligent failure to act or its own willful misconduct; provided, however, that:

(i) Neither the Trustee nor the Securities Administrator shall be personally liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of Holders of Certificates as provided in Section 6.18 hereof;

(ii) For all purposes under this Agreement, the Trustee shall not be deemed to have notice of any Event of Default (other than resulting from a failure by the Master Servicer to furnish information to the Trustee when required to do so) unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Holders of the Certificates and this Agreement;

(iii) For all purposes under this Agreement, the Securities Administrator shall not be deemed to have notice of any Event of Default (other than resulting from a failure by the Master Servicer to furnish information to the Securities Administrator when required to do so) unless a Responsible Officer of the Securities Administrator has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Securities Administrator at the address provided in Section 11.07, and such notice references the Holders of the Certificates and this Agreement;

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(iv) No provision of this Agreement shall require the Trustee (regardless of the capacity in which it is acting) or the Securities Administrator to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it; and none of the provisions contained in this Agreement shall in any event require the Trustee or the Securities Administrator to perform, or be responsible for the manner of performance of, any of the obligations of the Master Servicer under this Agreement;

(v) Neither the Trustee nor the Securities Administrator shall be responsible for any act or omission of the Master Servicer, the Depositor, the Seller or the Custodian.

(d) The Trustee shall have no duty hereunder with respect to any complaint, claim, demand, notice or other document it may receive or which may be alleged to have been delivered to or served upon it by the parties as a consequence of the assignment of any Mortgage Loan hereunder; provided, however, that the Trustee shall promptly remit to the applicable Servicer upon receipt any such complaint, claim, demand, notice or other document (i) which is delivered to the Corporate Trust Office of the Trustee, (ii) of which a Responsible Officer has actual knowledge, and (iii) which contains information sufficient to permit the Trustee to make a determination that the real property to which such document relates is a Mortgaged Property.

(e) Neither the Trustee nor the Securities Administrator shall be personally liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of the Certificateholders of any Class holding Certificates which evidence, as to such Class, Percentage Interests aggregating not less than 25% as to the time, method and place of conducting any proceeding for any remedy available to the Trustee or the Securities Administrator or exercising any trust or power conferred upon the Trustee or the Securities Administrator, as applicable, under this Agreement.

(f) Neither the Trustee nor the Securities Administrator shall be required to perform services under this Agreement, or to expend or risk its own funds or otherwise incur financial liability for the performance of any of its duties hereunder or the exercise of any of its rights or powers if there is reasonable ground for believing that the timely payment of its fees and expenses or the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it, and none of the provisions contained in this Agreement shall in any event require the Trustee or the Securities Administrator, as applicable, to perform, or be responsible for the manner of performance of, any of the obligations of the Master Servicer or any Servicer under this Agreement or any Servicing Agreement except during such time, if any, as the Trustee shall be the successor to, and be vested with the rights, duties, powers and privileges of, the Master Servicer in accordance with the terms of this Agreement.

(g) The Trustee shall not be held liable by reason of any insufficiency in the Distribution Account or, if applicable, the Reserve Fund resulting from any investment loss on any Permitted Investment included therein (except to the extent that the Trustee is the obligor and has defaulted thereon).

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(h) Except as otherwise provided herein, neither the Trustee nor the Securities Administrator shall have any duty (A) to see to any recording, filing, or depositing of this Agreement or any agreement referred to herein or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any rerecording, refiling or redepositing of any thereof, (B) to see to any insurance, (C) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Trust Fund other than from funds available in the Distribution Account, or (D) to confirm or verify the contents of any reports or certificates of the Master Servicer or any Servicer delivered to the Trustee or the Securities Administrator pursuant to this Agreement believed by the Trustee or the Securities Administrator, as applicable, to be genuine and to have been signed or presented by the proper party or parties.

(i) Neither the Securities Administrator nor the Trustee shall be liable in its individual capacity for an error of judgment made in good faith by a Responsible Officer or other officers of the Trustee or the Securities Administrator, as applicable, unless it shall be proved that the Trustee or the Securities Administrator, as applicable, was negligent in ascertaining the pertinent facts.

(j) Notwithstanding anything in this Agreement to the contrary, neither the Securities Administrator nor the Trustee shall be liable for special, indirect or consequential losses or damages of any kind whatsoever (including, but not limited to, lost profits), even if the Trustee or the Securities Administrator, as applicable, has been advised of the likelihood of such loss or damage and regardless of the form of action.

(k) Neither the Securities Administrator nor the Trustee shall be responsible for the acts or omissions of the other, it being understood that this Agreement shall not be construed to render them agents of one another.

Section 6.02 Certain Matters Affecting the Trustee and the Securities Administrator.

Except as otherwise provided in Section 6.01:

(i) Each of the Trustee and the Securities Administrator may request, and may rely and shall be protected in acting or refraining from acting upon any resolution, Officer’s Certificate, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(ii) Each of the Trustee and the Securities Administrator may consult with counsel and any advice of its counsel or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;

(iii) Neither the Trustee nor the Securities Administrator shall be personally liable for any action taken, suffered or omitted by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement;

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(iv) Unless an Event of Default shall have occurred and be continuing, neither the Trustee nor the Securities Administrator shall be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document (provided the same appears regular on its face), unless requested in writing to do so by the Holders of at least a majority in Class Principal Amount (or Percentage Interest) of each Class of Certificates; provided, however, that, if the payment within a reasonable time to the Trustee or the Securities Administrator, as applicable, of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee or the Securities Administrator, as applicable, not reasonably assured to the Trustee or the Securities Administrator by the security afforded to it by the terms of this Agreement, the Trustee or the Securities Administrator, as applicable, may require reasonable indemnity against such expense or liability or payment of such estimated expenses from the Certificateholders as a condition to proceeding. The reasonable expense thereof shall be paid by the party requesting such investigation and if not reimbursed by the requesting party shall be reimbursed by the Trust Fund to the Trustee or the Securities Administrator, as applicable;

(v) Each of the Trustee and the Securities Administrator may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, custodians or attorneys, which agents, custodians or attorneys shall have any and all of the rights, powers, duties and obligations of the Trustee and the Securities Administrator conferred on them by such appointment, provided that each of the Trustee and the Securities Administrator shall continue to be responsible for its duties and obligations hereunder to the extent provided herein, and provided further that neither the Trustee nor the Securities Administrator shall be responsible for any misconduct or negligence on the part of any such agent or attorney appointed with due care by the Trustee or the Securities Administrator, as applicable;

(vi) Neither the Trustee nor the Securities Administrator shall be under any obligation to exercise any of the trusts or powers vested in it by this Agreement or to institute, conduct or defend any litigation hereunder or in relation hereto, in each case at the request, order or direction of any of the Certificateholders pursuant to the provisions of this Agreement, unless such Certificateholders shall have offered to the Trustee or the Securities Administrator, as applicable, reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby;

(vii) The right of the Trustee and the Securities Administrator to perform any discretionary act enumerated in this Agreement shall not be construed as a duty, and neither the Trustee nor the Securities Administrator shall be answerable for other than its negligence or willful misconduct in the performance of such act;

(viii) Neither the Trustee nor the Securities Administrator shall be required to give any bond or surety in respect of the execution of the Trust Fund created hereby or the powers granted hereunder; and

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(ix) Neither the Trustee nor the Securities Administrator shall have any duty to conduct any affirmative investigation (including, but not limited to, reviewing any reports delivered to the Trustee in connection with the review of the Trustee Mortgage Files) as to the occurrence of any condition requiring the repurchase of any Mortgage Loan by the Seller pursuant to this Agreement or the Mortgage Loan Purchase Agreement, as applicable, or the eligibility of any Mortgage Loan for purposes of this Agreement.

In the event either of the Trustee or the Securities Administrator deem the nature of any action required on its part to be unclear, the Trustee or the Securities Administrator, as applicable, may require prior to such action that it be provided by the Depositor with reasonable further instructions.

Section 6.03 Trustee and Securities Administrator Not Liable for Certificates.

The Trustee and the Securities Administrator make no representations as to the validity or sufficiency of this Agreement or of the Certificates (other than the certificate of authentication on the Certificates) or of any Mortgage Loan, or related document save that the Trustee and the Securities Administrator represent that, assuming due execution and delivery by the other parties hereto, this Agreement has been duly authorized, executed and delivered by it and constitutes its valid and binding obligation, enforceable against it in accordance with its terms except that such enforceability may be subject to (A) applicable bankruptcy and insolvency laws and other similar laws affecting the enforcement of the rights of creditors generally, and (B) general principles of equity regardless of whether such enforcement is considered in a proceeding in equity or at law. The Trustee and the Securities Administrator shall not be accountable for the use or application by the Depositor of funds paid to the Depositor in consideration of the assignment of the Mortgage Loans to the Trust Fund by the Depositor or for the use or application of any funds deposited into the Distribution Account or any other fund or account maintained with respect to the Certificates. The Trustee and the Securities Administrator shall not be responsible for the legality or validity of this Agreement or the validity, priority, perfection or sufficiency of the security for the Certificates issued or intended to be issued hereunder. Except as otherwise provided herein, the Trustee and the Securities Administrator shall have no responsibility for filing any financing or continuation statement in any public office at any time or to otherwise perfect or maintain the perfection of any security interest or lien granted to it hereunder or to record this Agreement.

Section 6.04 Trustee and the Securities Administrator May Own Certificates.

The Trustee and the Securities Administrator and any Affiliate or agent of either of them in its individual or any other capacity may become the owner or pledgee of Certificates and may transact banking and trust business with the other parties hereto and their Affiliates with the same rights it would have if it were not Trustee, Securities Administrator or such agent.

Section 6.05 Eligibility Requirements for Trustee and Securities Administrator.

The Trustee hereunder shall at all times (i) be an institution insured by the FDIC, (ii) be a corporation or national banking association, organized and doing business under the laws of any State or the United States of America, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by federal or state authority and (iii) not be an Affiliate of the Master Servicer or any Servicer. If such corporation or national banking association publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then, for the purposes of this Section, the combined capital and surplus of such corporation or national banking association shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 6.06.

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The Securities Administrator hereunder shall at all times (i) be an institution authorized to exercise corporate trust powers under the laws of its jurisdiction of organization, (ii) be rated at least “A/F1” by Fitch, or if not rated by Fitch, the equivalent rating by S&P or Moody’s and (iii) not be an originator of Mortgage Loans, the Master Servicer, a Servicer, the Depositor, or an Affiliate of the Depositor unless the Securities Administrator is in an institutional trust department of the Securities Administrator.

Section 6.06 Resignation and Removal of Trustee and the Securities Administrator.

(a) Each of the Trustee and the Securities Administrator may at any time resign and be discharged from the trust hereby created by giving 60 days’ written notice thereof to the Trustee or the Securities Administrator, as applicable, the Depositor and the Master Servicer. Upon receiving such notice of resignation, the Depositor will promptly appoint a successor trustee or a successor securities administrator, as applicable, by written instrument, one copy of which instrument shall be delivered to the resigning Trustee or resigning Securities Administrator, as applicable, one copy to the successor trustee or successor securities administrator, as applicable, and one copy to the Master Servicer. If no successor trustee or successor securities administrator shall have been so appointed and shall have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Trustee or resigning Securities Administrator, as applicable, may petition any court of competent jurisdiction for the appointment of a successor trustee or successor securities administrator, as applicable. In the case of any such resignation by the Securities Administrator, if no successor securities administrator shall have been appointed and shall have accepted appointment within 60 days after the Securities Administrator ceases to be the Securities Administrator pursuant to this Section 6.06, then the Trustee shall perform the duties of the Securities Administrator pursuant to this Agreement and shall be entitled to the fees of the Securities Administrator for so long as the Trustee performs such duties; provided, however, that the Trustee may engage a qualified entity to perform the duties of the Securities Administrator under Sections 6.21, 6.22, 6.23, 6.24 and 11.16 of this Agreement. The successor trustee shall notify each Rating Agency through the Rule 17g-5 Information Provider, the Servicers[, the Servicing Administrator] and the Master Servicer of any change of Trustee and the successor securities administrator shall notify each Rating Agency through the Rule 17g-5 Information Provider, the Servicers and the Master Servicer of any change of Securities Administrator.

(b) If at any time any of the following events shall occur: (i) the Trustee or the Securities Administrator ceases to be eligible in accordance with the provisions of Section 6.05 and fails to resign after written request therefor by the Depositor, (ii) the Securities Administrator fails to perform its obligations pursuant to Section 5.02 to make distributions to Certificateholders, which failure continues unremedied for a period of one Business Day after the date upon which written notice of such failure shall have been given to the Securities Administrator by the Trustee or the Depositor, (iii) the Securities Administrator fails to provide an Item 1123 Certificate, Assessment of Compliance or an Accountant’s Attestation required under Sections 6.22, 6.23 and 6.24, respectively, by March 15 of each year in which Exchange Act reports are required, (iv) the Trustee or the Securities Administrator becomes incapable of acting, or is adjudged a bankrupt or insolvent, or a receiver of the Trustee or the Securities Administrator of its property is appointed, or any public officer takes charge or control of the Trustee or the Securities Administrator or of either of their property or affairs for the purpose of rehabilitation, conservation or liquidation, (v) a tax is imposed or threatened with respect to the Trust Fund by any state in which the Trustee or the Trust Fund held by the Trustee is located, or (vi) the continued use of the Trustee or Securities Administrator would result in a downgrading of the rating by any Rating Agency of any Class of Certificates with a rating; then, in each such case, the Depositor shall remove the Trustee or the Securities Administrator, as applicable, and the Depositor shall appoint a successor trustee or successor securities administrator, as applicable, acceptable to the Depositor or the Trustee by written instrument, one copy of which instrument shall be delivered to the Trustee or Securities Administrator so removed, one copy each to the successor trustee or successor securities administrator, as applicable, and one copy to the Master Servicer.

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(c) The Holders of more than 50% of the Class Principal Amount (or Percentage Interest) of each Class of Certificates may at any time upon 30 days’ written notice to the Trustee or the Securities Administrator, as applicable, and to the Depositor remove the Trustee or the Securities Administrator, as applicable, by such written instrument, signed by such Holders or their attorney-in-fact duly authorized, one copy of which instrument shall be delivered to the Depositor, one copy to the Trustee or Securities Administrator, as applicable and one copy to the Master Servicer; the Depositor shall thereupon appoint a successor trustee or successor securities administrator, as applicable, in accordance with this Section.

(d) Any resignation or removal of the Trustee or the Securities Administrator, as applicable, and appointment of a successor trustee or successor securities administrator pursuant to any of the provisions of this Section shall become effective upon acceptance of appointment by the successor trustee or the successor securities administrator, as applicable, as provided in Section 6.07.

Section 6.07 Successor Trustee and Successor Securities Administrator.

(a) Any successor trustee or successor securities administrator appointed as provided in Section 6.06 shall execute, acknowledge and deliver to the Depositor and to its predecessor trustee or predecessor securities administrator, as applicable, (i) an instrument accepting such appointment hereunder and (ii) the certification required pursuant to the first sentence of Section 6.21(e), and thereupon the resignation or removal of the predecessor trustee or predecessor securities administrator, as applicable, shall become effective and such successor trustee or successor securities administrator, as applicable, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as trustee or securities administrator, as applicable, herein. The predecessor trustee or predecessor securities administrator, as applicable, shall deliver to the successor trustee (or assign to the Trustee its interest under the Custodial Agreement, to the extent permitted thereunder) or successor securities administrator, as applicable, all Trustee Mortgage Files and documents and statements related to each Trustee Mortgage File held by it hereunder, and shall duly assign, transfer, deliver and pay over to the successor trustee the entire Trust Fund, together with all necessary instruments of transfer and assignment or other documents properly executed necessary to effect such transfer and such of the records or copies thereof maintained by the predecessor trustee in the administration hereof as may be requested by the successor trustee and shall thereupon be discharged from all duties and responsibilities under this Agreement. In addition, the Depositor and the predecessor trustee or predecessor securities administrator, as applicable, shall execute and deliver such other instruments and do such other things as may reasonably be required to more fully and certainly vest and confirm in the successor trustee or successor securities administrator, as applicable, all such rights, powers, duties and obligations.

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(b) No successor trustee shall accept appointment as provided in this Section unless at the time of such appointment such successor trustee shall be eligible under the provisions of Section 6.05.

(c) Upon acceptance of appointment by a successor trustee or successor securities administrator, as applicable, as provided in this Section 6.07, the predecessor trustee or predecessor securities administrator, as applicable, shall mail notice of the succession of such trustee or securities administrator, as applicable, hereunder to all Holders of Certificates at their addresses as shown in the Certificate Register and to each Rating Agency through the Rule 17g-5 Information Provider. The expenses of such mailing shall be borne by the Master Servicer.

Section 6.08 Merger or Consolidation of Trustee or the Securities Administrator.

Any Person into which the Trustee or Securities Administrator may be merged or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Trustee or Securities Administrator shall be a party, or any Persons succeeding to the business of the Trustee or Securities Administrator, shall be the successor to the Trustee or Securities Administrator hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding, provided that, in the case of the Trustee, such Person shall be eligible under the provisions of Section 6.05.

Section 6.09 Appointment of Co-Trustee, Separate Trustee or Custodian.

(a) Notwithstanding any other provisions hereof, at any time, the Trustee, the Depositor or the Certificateholders evidencing more than 50% of the Class Principal Amount (or Percentage Interest) of every Class of Certificates shall have the power from time to time to appoint one or more Persons, approved by the Trustee, to act either as co-trustees jointly with the Trustee, or as separate trustees, or as custodians, for the purpose of holding title to, foreclosing or otherwise taking action with respect to any Mortgage Loan outside the state where the Trustee has its principal place of business where such separate trustee or co-trustee is necessary or advisable (or the Trustee has been advised by the Master Servicer that such separate trustee or co-trustee is necessary or advisable) under the laws of any state in which a property securing a Mortgage Loan is located or for the purpose of otherwise conforming to any legal requirement, restriction or condition in any state in which a property securing a Mortgage Loan is located or in any state in which any portion of the Trust Fund is located. The separate Trustees, co-trustees, or custodians so appointed shall be trustees or custodians for the benefit of all the Certificateholders and shall have such powers, rights and remedies as shall be specified in the instrument of appointment; provided, however, that no such appointment shall, or shall be deemed to, constitute the appointee an agent of the Trustee. The obligation of the Master Servicer to make Advances pursuant to Section 5.04 hereof shall not be affected or assigned by the appointment of a co-trustee.

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(b) Every separate trustee, co-trustee, and custodian shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

(i) all powers, duties, obligations and rights conferred upon the Trustee in respect of the receipt, custody and payment of moneys shall be exercised solely by the Trustee;

(ii) all other rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee, co-trustee, or custodian jointly, except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations, including the holding of title to the Trust Fund or any portion thereof in any such jurisdiction, shall be exercised and performed by such separate trustee, co-trustee, or custodian;

(iii) no trustee or custodian hereunder shall be personally liable by reason of any act or omission of any other trustee or custodian hereunder; and

(iv) the Trustee may at any time, by an instrument in writing executed by it, with the concurrence of the Depositor, accept the resignation of or remove any separate trustee, co-trustee or custodian, so appointed by it or them, if such resignation or removal does not violate the other terms of this Agreement.

(c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee, co-trustee or custodian shall refer to this Agreement and the conditions of this Article VI. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Trustee. Every such instrument shall be filed with the Trustee and a copy given to the Master Servicer.

(d) Any separate trustee, co-trustee or custodian may, at any time, constitute the Trustee its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name. If any separate trustee, co-trustee or custodian shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

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(e) No separate trustee, co-trustee or custodian hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.05 hereunder and no notice to the Certificateholders of the appointment shall be required under Section 6.07 hereof.

(f) The Trustee agrees to instruct the co-trustees, if any, to the extent necessary to fulfill the Trustee’s obligations hereunder.

(g) The Trust shall pay the reasonable compensation of the co-trustees (which compensation shall not reduce any compensation payable to the Trustee under such Section).

Section 6.10 Authenticating Agents.

(a) The Trustee may appoint one or more Authenticating Agents which shall be authorized to act on behalf of the Trustee in authenticating Certificates. The Trustee hereby appoints the Securities Administrator as initial Authenticating Agent, and the Securities Administrator accepts such appointment. Wherever reference is made in this Agreement to the authentication of Certificates by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent must be a national banking association or a corporation organized and doing business under the laws of the United States of America or of any state, having a combined capital and surplus of at least $15,000,000, authorized under such laws to do a trust business and subject to supervision or examination by federal or state authorities.

(b) Any Person into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which any Authenticating Agent shall be a party, or any Person succeeding to the corporate agency business of any Authenticating Agent, shall continue to be the Authenticating Agent without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

(c) Any Authenticating Agent may at any time resign by giving at least 30 days’ advance written notice of resignation to the Trustee and the Depositor. The Trustee may at any time terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and the Depositor. Upon receiving a notice of resignation or upon such a termination, or in case at any time any Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.10, the Trustee may appoint a successor authenticating agent, shall give written notice of such appointment to the Depositor and shall mail notice of such appointment to all Holders of Certificates. Any successor authenticating agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers, duties and responsibilities of its predecessor hereunder, with like effect as if originally named as Authenticating Agent. No successor authenticating agent shall be appointed unless eligible under the provisions of this Section 6.10. No Authenticating Agent shall have responsibility or liability for any action taken by it as such at the direction of the Trustee or in accordance with the provisions of this Agreement.

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Section 6.11 Indemnification of the Trustee and the Securities Administrator.

The Trustee and the Securities Administrator and their respective directors, officers, employees and agents shall be entitled to indemnification from the Depositor and the Trust Fund (provided that the Trust Fund’s indemnification under this Section 6.11 is limited by Section 4.01(d)) for any loss, liability or expense (including, without limitation, reasonable attorneys’ fees and disbursements (and, in the case of the Trustee, in connection with the Custodial Agreement, including the reasonable compensation and the expenses and disbursements of its agents or counsel), incurred without negligence or willful misconduct on their part, arising out of, or in connection with, the acceptance or administration of the trusts created hereunder or in connection with the performance of their duties hereunder including the costs and expenses of defending themselves against any claim in connection with the exercise or performance of any of their powers or duties hereunder, provided that:

(i) with respect to any such claim, the Trustee or the Securities Administrator, as applicable, shall have given the Depositor written notice thereof promptly after the Trustee, the Securities Administrator, as applicable, shall have knowledge thereof;

(ii) while maintaining control over its own defense, the Trustee or the Securities Administrator, as applicable, shall cooperate and consult fully with the Depositor in preparing such defense; and

(iii) notwithstanding anything to the contrary in this Section 6.11, the Trust Fund shall not be liable for settlement of any such claim by the Trustee or the Securities Administrator, as applicable, entered into without the prior consent of the Depositor, which consent shall not be unreasonably withheld.

The provisions of this Section 6.11 shall survive any termination of this Agreement and the resignation or removal of the Trustee or the Securities Administrator, as applicable, and shall be construed to include, but not be limited to any loss, liability or expense under any environmental law.

Section 6.12 Fees and Expenses of Securities Administrator and the Trustee.

(a) Compensation for the services of the Securities Administrator hereunder shall be paid from the Master Servicing Fee. The Securities Administrator shall be entitled to all disbursements and advancements incurred or made by the Securities Administrator in accordance with this Agreement (including fees and expenses of its counsel and all persons not regularly in its employment), except any such expenses arising from its negligence, bad faith or willful misconduct. [                  ] shall act as Securities Administrator for so long as it is Master Servicer under this Agreement.

(b) As compensation for its services hereunder, the Trustee shall be entitled to receive a Trustee fee equal to $[        ] per annum, which shall be paid by the Master Servicer pursuant to a separate agreement between the Trustee and the Master Servicer. Any expenses incurred by the Trustee shall be reimbursed in accordance with Section 6.11.

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Section 6.13 Collection of Monies.

Except as otherwise expressly provided in this Agreement, the Trustee and the Securities Administrator may demand payment or delivery of, and shall receive and collect, all money and other property payable to or receivable by the it pursuant to this Agreement. The Trustee or the Securities Administrator, as applicable, shall hold all such money and property received by it as part of the Trust Fund and shall distribute it as provided in this Agreement.

Section 6.14 Events of Default; Trustee To Act; Appointment of Successor.

(a) The occurrence of any one or more of the following events shall constitute an “Event of Default”:

(i) Any failure by the Master Servicer to furnish the Securities Administrator the Mortgage Loan data sufficient to prepare the reports described in Section 4.02 which continues unremedied for a period of one Business Day after the date upon which written notice of such failure shall have been given to such Master Servicer by the Trustee or the Securities Administrator or to such Master Servicer, the Securities Administrator and the Trustee by the Holders of not less than 25% of the Class Principal Amount (or Class Notional Amount) of each Class of Certificates affected thereby; or

(ii) Any failure by the Master Servicer to deliver to the Depositor and the Seller the information or reports required pursuant to Section 9.01(e) through (g) hereto;

(iii) Any failure on the part of the Master Servicer duly to observe or perform in any material respect any other of the covenants or agreements (other than those referred to in (viii) and (ix) below) on the part of the Master Servicer contained in this Agreement which continues unremedied for a period of 30 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Master Servicer by the Trustee or the Securities Administrator, or to the Master Servicer, the Securities Administrator and the Trustee by the Holders of more than 50% of the Aggregate Voting Interests of the Certificates (or in the case of a breach of its obligation to provide an Item 1123 Certificate, an Assessment of Compliance or an Accountant’s Attestation pursuant to Sections 6.22, 6.23 and 6.24, immediately without a cure period); or

(iv) A decree or order of a court or agency or supervisory authority having jurisdiction for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the Master Servicer, and such decree or order shall have remained in force undischarged or unstayed for a period of 60 days or any Rating Agency reduces or withdraws or threatens to reduce or withdraw the rating of the Certificates because of the financial condition or loan servicing capability of such Master Servicer; or

(v) The Master Servicer shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities, voluntary liquidation or similar proceedings of or relating to the Master Servicer or of or relating to all or substantially all of its property; or

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(vi) The Master Servicer shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency or reorganization statute, make an assignment for the benefit of its creditors or voluntarily suspend payment of its obligations; or

(vii) The Master Servicer shall be dissolved, or shall dispose of all or substantially all of its assets, or consolidate with or merge into another entity or shall permit another entity to consolidate or merge into it, such that the resulting entity does not meet the criteria for a successor servicer as specified in Section 9.05 hereof; or

(viii) If a representation or warranty set forth in Section 9.03 hereof shall prove to be incorrect as of the time made in any respect that materially and adversely affects the interests of the Certificateholders, and the circumstance or condition in respect of which such representation or warranty was incorrect shall not have been eliminated or cured within 30 days after the date on which written notice of such incorrect representation or warranty shall have been given to the Master Servicer by the Trustee or the Securities Administrator, or to the Master Servicer, the Securities Administrator and the Trustee by the Holders of more than 50% of the Aggregate Voting Interests of the Certificates; or

(ix) A sale or pledge of any of the rights of the Master Servicer hereunder or an assignment of this Agreement by the Master Servicer or a delegation of the rights or duties of the Master Servicer hereunder shall have occurred in any manner not otherwise permitted hereunder and without the prior written consent of the Trustee and Certificateholders holding more than 50% of the Aggregate Voting Interests of the Certificates; or

(x) After receipt of notice from the Trustee, any failure of the Master Servicer to make any Advances when such Advances are due, which failure continues unremedied for a period of one Business Day.

If an Event of Default described in clauses (i) through (ix) of this Section shall occur, then, in each and every case, subject to applicable law, so long as any such Event of Default shall not have been remedied within any period of time prescribed by this Section, the Trustee, by notice in writing to the Master Servicer may, and, if so directed by Certificateholders evidencing more than 50% of the Class Principal Amount (or Class Notional Amount) of each Class of Certificates, or upon the occurrence of an Event of Default described in clause (x) of this Section, shall, terminate all of the rights and obligations of the Master Servicer hereunder and in and to the Mortgage Loans and the proceeds thereof. On or after the receipt by the Master Servicer of such written notice, all authority and power of the Master Servicer, and only in its capacity as Master Servicer under this Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee; and the Trustee is hereby authorized and empowered to execute and deliver, on behalf of the defaulting Master Servicer as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement or assignment of the Mortgage Loans and related documents or otherwise. The defaulting Master Servicer agrees to cooperate with the Trustee and the Securities Administrator in effecting the termination of the defaulting Master Servicer’s responsibilities and rights hereunder as Master Servicer including, without limitation, notifying Servicers of the assignment of the master servicing function and providing the Trustee or its designee all documents and records in electronic or other form reasonably requested by it to enable the Trustee or its designee to assume the defaulting Master Servicer’s functions hereunder and the transfer to the Trustee for administration by it of all amounts which shall at the time be or should have been deposited by the defaulting Master Servicer in the Distribution Account and any other account or fund maintained with respect to the Certificates or thereafter received with respect to the Mortgage Loans. The Master Servicer being terminated shall bear all costs of a master servicing transfer, including but not limited to those of the Trustee or Securities Administrator reasonably allocable to specific employees and overhead, legal fees and expenses, accounting and financial consulting fees and expenses, and costs of amending this Agreement, if necessary. If the terminated Master Servicer fails to pay the costs incurred by the Trustee in connection with a master servicing transfer, then the Trustee shall to be entitled to reimbursement in accordance with the provisions of this Agreement.

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Notwithstanding the termination of its activities as Master Servicer, each terminated Master Servicer shall continue to be entitled to reimbursement under this Agreement to the extent such reimbursement relates to the period prior to such Master Servicer’s termination. The successor master servicer shall not be required to purchase or reimburse the terminated Master Servicer's Advance receivables. For the avoidance of doubt, to the extent that the terminated Master Servicer and a successor master servicer have each made Advances in respect of the same Mortgage Loan, recovered amounts shall be used to reimburse the terminated Master Servicer and a successor master servicer in the order in which such Advances were made.

When a Responsible Officer of the Trustee has actual knowledge of the occurrence of an Event of Default, the Trustee shall promptly notify the Securities Administrator and each Rating Agency through the Rule 17g-5 Information Provider of the nature and extent of such Event of Default. The Trustee or the Securities Administrator shall promptly give written notice to the Master Servicer upon the Master Servicer’s failure to fund Advances as required under this Agreement.

(b) On and after the time the Master Servicer receives a notice of termination from the Trustee pursuant to Section 6.14(a) or the Trustee receives the resignation of the Master Servicer evidenced by an Opinion of Counsel pursuant to Section 9.06, the Trustee, unless another master servicer shall have been appointed, shall be the successor in all respects to the Master Servicer in its capacity as such under this Agreement and the transactions set forth or provided for herein and shall have all the rights and powers and be subject to all the responsibilities, duties and liabilities relating thereto and arising thereafter placed on the Master Servicer hereunder, including (but subject to applicable law) the obligation to make Advances in accordance with Section 5.04; provided, however, that any failure to perform such duties or responsibilities caused by the Master Servicer’s failure to provide information required by this Agreement shall not be considered a default by the Trustee hereunder. In addition, the Trustee shall have no responsibility for any act or omission of the Master Servicer prior to the issuance of any notice of termination. The Trustee shall have no liability relating to the representations and warranties of the Master Servicer set forth in Section 9.03. In the Trustee's capacity as such successor, the Trustee shall have the same limitations on liability herein granted to the Master Servicer. As compensation therefor, the Trustee shall be entitled to receive all compensation payable to the Master Servicer under this Agreement, including the Master Servicing Fee.

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(c) Notwithstanding the above, the Trustee may, if it shall be unwilling to continue to so act, or shall, if it is unable to so act, petition a court of competent jurisdiction to appoint, or appoint on its own behalf any established housing and home finance institution servicer, master servicer, servicing or mortgage servicing institution having a net worth of not less than $15,000,000 and meeting such other standards for a successor master servicer as are set forth in this Agreement, as the successor to such Master Servicer in the assumption of all of the responsibilities, duties or liabilities of a master servicer, like the Master Servicer. Any entity designated by the Trustee as a successor master servicer may be an Affiliate of the Trustee; provided, however, that, unless such Affiliate meets the net worth requirements and other standards set forth herein for a successor master servicer, the Trustee, in its individual capacity shall agree, at the time of such designation, to be and remain liable to the Trust Fund for such Affiliate’s actions and omissions in performing its duties hereunder. In connection with such appointment and assumption, the Trustee may make such arrangements for the compensation of such successor out of payments on Mortgage Loans as it and such successor shall agree; provided, however, that no such compensation shall be in excess of that permitted to the Master Servicer hereunder. Notwithstanding anything herein to the contrary, in no event shall the Trustee be liable for any Master Servicing Fee or for any differential in the amount of the Master Servicing Fee paid hereunder and the amount necessary to induce any successor master servicer to act as successor master servicer under this Agreement and the transactions set forth or provided for herein. The Trustee and such successor shall take such actions, consistent with this Agreement, as shall be necessary to effectuate any such succession and may make other arrangements with respect to the servicing to be conducted hereunder which are not inconsistent herewith. The Master Servicer shall cooperate with the Trustee and any successor master servicer in effecting the termination of the Master Servicer’s responsibilities and rights hereunder including, without limitation, notifying Mortgagors of the assignment of the master servicing functions and providing the Trustee and successor master servicer, as applicable, all documents and records in electronic or other form reasonably requested by it to enable it to assume the Master Servicer’s functions hereunder and the transfer to the Trustee or such successor master servicer, as applicable, all amounts which shall at the time be or should have been deposited by the Master Servicer in the Distribution Account and any other account or fund maintained with respect to the Certificates or thereafter be received with respect to the Mortgage Loans. Neither the Trustee nor any other successor master servicer shall be deemed to be in default hereunder by reason of any failure to make, or any delay in making, any distribution hereunder or any portion thereof caused by (i) the failure of the Master Servicer to deliver, or any delay in delivering, cash, documents or records to it, (ii) the failure of the Master Servicer to cooperate as required by this Agreement, (iii) the failure of the Master Servicer to deliver the Mortgage Loan data to the Trustee as required by this Agreement or (iv) restrictions imposed by any regulatory authority having jurisdiction over the Master Servicer. No successor master servicer shall be deemed to be in default hereunder by reason of any failure to make, or any delay in making, any distribution hereunder or any portion thereof caused by (i) the failure of the Trustee to deliver, or any delay in delivering cash, documents or records to it related to such distribution, or (ii) the failure of Trustee to cooperate as required by this Agreement.

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Any successor master servicer shall execute and deliver to the Depositor, the Seller and the predecessor Master Servicer the certification required pursuant to the first sentence of Section 6.21(e).

Section 6.15 Additional Remedies of Trustee Upon Event of Default.

During the continuance of any Event of Default, so long as such Event of Default shall not have been remedied, the Trustee, in addition to the rights specified in Section 6.14, shall have the right, in its own name and as trustee of the Trust Fund, to take all actions now or hereafter existing at law, in equity or by statute to enforce its rights and remedies and to protect the interests, and enforce the rights and remedies, of the Certificateholders (including the institution and prosecution of all judicial, administrative and other proceedings and the filings of proofs of claim and debt in connection therewith). Except as otherwise expressly provided in this Agreement, no remedy provided for by this Agreement shall be exclusive of any other remedy, and each and every remedy shall be cumulative and in addition to any other remedy, and no delay or omission to exercise any right or remedy shall impair any such right or remedy or shall be deemed to be a waiver of any Event of Default.

Section 6.16 Waiver of Defaults.

More than 50% of the Aggregate Voting Interests of the Certificateholders may waive any default or Event of Default by the Master Servicer in the performance of its obligations hereunder, except that a default in the making of any required deposit to the Distribution Account that would result in a failure of the Paying Agent to make any required payment of principal of or interest on the Certificates may only be waived with the consent of 100% of the affected Certificateholders. Upon any such waiver of a past default, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereon except to the extent expressly so waived.

Section 6.17 Notification to Holders.

Upon termination of the Master Servicer or appointment of a successor to the Master Servicer, in each case as provided herein, the Trustee shall promptly mail notice thereof by first class mail to the Securities Administrator, and the Certificateholders at their respective addresses appearing on the Certificate Register. The Trustee shall also, within 45 days after the occurrence of any Event of Default known to the Trustee, give written notice thereof to the Securities Administrator and the Certificateholders, unless such Event of Default shall have been cured or waived prior to the issuance of such notice and within such 45-day period.

Section 6.18 Directions by Certificateholders and Duties of Trustee During Event of Default.

Subject to the provisions of Section 8.01 hereof, during the continuance of any Event of Default, Holders of Certificates evidencing not less than 25% of the Class Principal Amount (or Percentage Interest) of each Class of Certificates affected thereby may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Agreement; provided, however, that the Trustee shall be under no obligation to pursue any such remedy, or to exercise any of the trusts or powers vested in it by this Agreement (including, without limitation, (i) the conducting or defending of any administrative action or litigation hereunder or in relation hereto and (ii) the terminating of the Master Servicer or any successor master servicer from its rights and duties as master servicer hereunder) at the request, order or direction of any of the Certificateholders, unless such Certificateholders shall have offered to the Trustee reasonable security or indemnity against the cost, expenses and liabilities which may be incurred therein or thereby; and, provided further, that, subject to the provisions of Section 8.01, the Trustee shall have the right to decline to follow any such direction if the Trustee, in accordance with an Opinion of Counsel, determines that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith determines that the action or proceeding so directed would involve it in personal liability for which it is not indemnified to its satisfaction or be unjustly prejudicial to the non-assenting Certificateholders.

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Section 6.19 [Reserved].

Section 6.20 Preparation of Tax Returns and Other Reports.

(a) The Securities Administrator shall prepare or cause to be prepared on behalf of the Trust Fund, based upon information calculated in accordance with this Agreement pursuant to instructions given by the Depositor, and the Securities Administrator shall file federal tax returns, all in accordance with Article X hereof. If the Securities Administrator is notified in writing that a state tax return or other return is required, then, at the sole expense of the Trust Fund, the Securities Administrator shall prepare and file such state income tax returns and such other returns as may be required by applicable law relating to the Trust Fund, and, if required by state law, and shall file any other documents to the extent required by applicable state tax law (to the extent such documents are in the Securities Administrator’s possession). The Securities Administrator shall forward copies to the Depositor of all such returns and Form 1099 supplemental tax information and such other information within the control of the Securities Administrator as the Depositor may reasonably request in writing, and shall distribute to each Certificateholder such forms and furnish such information within the control of the Securities Administrator as are required by the Code and the REMIC Provisions to be furnished to them, and will prepare and distribute to Certificateholders Form 1099 (supplemental tax information) (or otherwise furnish information within the control of the Securities Administrator and the Trustee) to the extent required by applicable law. The Master Servicer will indemnify the Securities Administrator and the Trustee for any liability of or assessment against the Securities Administrator and the Trustee, as applicable, resulting from any error in any of such tax or information returns directly resulting from errors in the information provided by such Master Servicer.

(b) The Securities Administrator shall prepare and file with the Internal Revenue Service (“IRS”), on behalf of the Trust Fund and each REMIC created hereunder, an application for an employer identification number on IRS Form SS-4 or by any other acceptable method. The Securities Administrator shall also file a Form 8811 as required. The Securities Administrator, upon receipt from the IRS of the Notice of Taxpayer Identification Number Assigned, shall upon request promptly forward a copy of such notice to the Trustee and the Depositor. The Securities Administrator shall furnish any other information that is required by the Code and regulations thereunder to be made available to the Certificateholders. The Master Servicer shall cause each Servicer to provide the Securities Administrator with such information as is necessary for the Securities Administrator to prepare such reports.

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Section 6.21 Reporting to the Commission.

Each of Form 10-D and Form 10-K requires the registrant to indicate (by checking "yes" or "no") that it "(1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days." The Depositor hereby represents to the Securities Administrator that the Depositor has filed all such required reports during the preceding 12 months and that it has been subject to such filing requirement for the past 90 days. The Depositor shall notify the Securities Administrator in writing, no later than the fifth calendar day after the related Distribution Date with respect to the filing of a report on Form 10-D and no later than March 15^th with respect to the filing of a report on Form 10-K, if the answer to the questions should be "no." The Securities Administrator shall be entitled to rely on such representations in preparing, executing and/or filing any such report.

(a) Reports Filed on Form 10-D.

(i) Within 15 days after each Distribution Date (subject to permitted extensions under the Exchange Act), the Securities Administrator shall prepare and file on behalf of the Trust Fund any Form 10-D required by the Exchange Act, in form and substance as required by the Exchange Act. The Securities Administrator shall file each Form 10-D with a copy of the related Distribution Date Statement attached thereto. Any disclosure in addition to the Distribution Date Statement that is required to be included on Form 10-D (“Additional Form 10-D Disclosure”) shall be reported by the parties set forth on Exhibit O hereto to the Depositor and the Securities Administrator and reviewed and approved or disapproved by the Depositor pursuant to the following paragraph and the Securities Administrator will have no duty or liability for any failure hereunder to determine or prepare any Additional Form 10-D Disclosure, except as set forth in the next paragraph.

(ii) As set forth on Exhibit O hereto, within 5 calendar days after the related Distribution Date, (i) the parties set forth thereon shall be required to provide to the Securities Administrator and the Depositor, to the extent known by a Responsible Officer, with respect to the Trustee, and to the extent known by a responsible officer thereof, with respect to the other parties, in EDGAR-compatible form, or in such other form as otherwise agreed upon by the Securities Administrator and such party, the form and substance of any Additional Form 10-D Disclosure, if applicable together with an additional disclosure notification in the form of Exhibit L hereto (an “Additional Disclosure Notification”) and (ii) the Depositor will approve, as to form and substance, or disapprove, as the case may be, the inclusion of the Additional Form 10-D Disclosure on Form 10-D. The Depositor will be responsible for any reasonable fees and expenses assessed or incurred by the Securities Administrator in connection with including any Additional Form 10-D Disclosure on Form 10-D pursuant to this paragraph.

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(iii) After preparing the Form 10-D, the Securities Administrator shall forward electronically a copy of the Form 10-D to the Depositor for review. The Securities Administrator will provide a copy of the Form 10-D to the Depositor by the 11^th calendar day after the related Distribution Date. On the 12^th calendar day after the related Distribution Date, the Depositor will provide any changes or approval to the Securities Administrator (which may be furnished electronically). In the absence of receipt of any written changes or approval, the Securities Administrator shall be entitled to assume that such Form 10-D is in final form and the Securities Administrator may proceed with the execution and filing of the Form 10-D. No later than the 13^th calendar day after the related Distribution Date, a duly authorized representative of the Master Servicer in charge of the master servicing function shall sign the Form 10-D and return an electronic or fax copy of such signed Form 10-D (with an original executed hard copy to follow by overnight mail) to the Securities Administrator. If a Form 10-D cannot be filed on time or if a previously filed Form 10-D needs to be amended, the Securities Administrator will follow the procedures set forth in subsection (d)(ii) of this Section 6.21. Promptly (but no later than 1 Business Day) after filing with the Commission, the Securities Administrator will make available on its internet website a final executed copy of each Form 10-D prepared and filed by the Securities Administrator. Each party to this Agreement acknowledges that the performance by the Securities Administrator of its duties under this Section 6.21(a) related to the timely preparation, execution and filing of Form 10-D is contingent upon such parties strictly observing all applicable deadlines in the performance of their duties under this Section 6.21(a). The Securities Administrator shall not have any liability for any loss, expense, damage or claim arising out of or with respect to any failure to properly prepare, execute and/or timely file such Form 10-D, where such failure results from the Securities Administrator’s inability or failure to obtain or receive, on a timely basis, any information from any other party hereto needed to prepare, arrange for execution or file such Form 10-D, not resulting from its own negligence, bad faith or willful misconduct.

(b) Reports Filed on Form 10-K.

(i) On or prior to the 90th day after the end of each fiscal year of the Trust Fund or such earlier date as may be required by the Exchange Act (the “10-K Filing Deadline”) (it being understood that the fiscal year for the Trust Fund ends on December 31^st of each year), commencing in March 20__, the Securities Administrator shall prepare and file on behalf of the Trust Fund any Form 10-K required by the Exchange Act, in form and substance as required by the Exchange Act. Each such Form 10-K shall include the following items, in each case to the extent they have been delivered to the Securities Administrator within the applicable time frames set forth in this Agreement, the Custodial Agreement and the related Servicing Agreement, (i) the Item 1123 Certificate for each Servicer, each Additional Servicer, the Master Servicer and Securities Administrator as described under Section 6.22, (ii)(A) the Assessment of Compliance with servicing criteria for each Servicer, each Servicing Function Participant, the Master Servicer, Securities Administrator and any Servicing Function Participant engaged by such parties (each, a “Reporting Servicer”), as described under Section 6.23, and (B) if any Reporting Servicer’s Assessment of Compliance identifies any material instance of noncompliance, disclosure identifying such instance of noncompliance, or if any Reporting Servicer’s Assessment of Compliance is not included as an exhibit to such Form 10-K, disclosure that such report is not included and an explanation why such report is not included, (iii)(A) the Accountant’s Attestation for each Reporting Servicer, as described under Section 6.24, and (B) if any Accountant’s Attestation identifies any material instance of noncompliance, disclosure identifying such instance of noncompliance, or if any such Accountant’s Attestation is not included as an exhibit to such Form 10-K, disclosure that such report is not included and an explanation why such report is not included, and (iv) a Sarbanes-Oxley Certification as described in Section 6.21(e) (provided, however, that the Securities Administrator, at its discretion may omit from the Form 10-K any annual compliance statement, Assessment of Compliance or Accountant’s Attestation that is not required to be filed with such Form 10-K pursuant to Regulation AB). Any disclosure or information in addition to (i) through (iv) above that is required to be included on Form 10-K (“Additional Form 10-K Disclosure”) shall be reported by the parties set forth on Exhibit M hereto to the Depositor and the Securities Administrator and reviewed and approved or disapproved by the Depositor pursuant to the following paragraph and the Securities Administrator will have no duty or liability for any failure hereunder to determine or prepare any Additional Form 10-K Disclosure, except as set forth in the next paragraph..

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(ii) As set forth on Exhibit M hereto, no later than March 15 following each fiscal year that the Trust Fund is subject to the Exchange Act reporting requirements, commencing in March 20__, (i) the parties set forth on Exhibit [__] shall be required to provide to the Securities Administrator and the Depositor, to the extent known by a Responsible Officer, with respect to the Trustee, and to the extent known by a responsible officer thereof, with respect to the other parties, a notice in the form of Exhibit [__] hereto, along with, in EDGAR-compatible form, or in such other form as otherwise agreed upon by the Securities Administrator and such party, the form and substance of any Additional Form 10-K Disclosure, if applicable, together with an Additional Disclosure Notification and (ii) the Depositor will approve, as to form and substance, or disapprove, as the case may be, the inclusion of the Additional Form 10-K Disclosure on Form 10-K. The Depositor will be responsible for any reasonable fees and expenses assessed or incurred by the Securities Administrator in connection with including any Additional Form 10-K Disclosure on Form 10-K pursuant to this paragraph.

(iii) After preparing the Form 10-K, the Securities Administrator shall forward electronically a copy of the Form 10-K to the Depositor for review. Within three (3) business days of receipt, but in no event later than March 25, the Depositor shall notify the Securities Administrator in writing (which may be furnished electronically) of any changes to or approval of such Form 10-K. In the absence of any written changes or approval, the Securities Administrator shall be entitled to assume that such Form 10-K is in final form. No later than the close of business on the 4th Business Day prior to the 10-K Filing Deadline, the Depositor shall sign the Form 10-K and return an electronic or fax copy of such signed Form 10-K (with an original executed hard copy to follow by overnight mail) to the Securities Administrator. If a Form 10-K cannot be filed on time or if a previously filed Form 10-K needs to be amended, the Securities Administrator will follow the procedures set forth in Section 6.21(d). Promptly (but no later than 1 Business Day) after filing with the Commission, the Securities Administrator will make available on its internet website a final executed copy of each Form 10-K prepared and filed by the Securities Administrator. The parties to this Agreement acknowledge that the performance by the Securities Administrator of its duties under this Section 6.21(b) related to the timely preparation and filing of Form 10-K is contingent upon such parties (and the Custodian, Servicers and any Additional Servicer or Servicing Function Participant) strictly observing all applicable deadlines in the performance of their duties under Sections 6.21, 6.22, 6.23, 6.24 and 11.16. The Securities Administrator shall not have any liability for any loss, expense, damage or claim arising out of or with respect to any failure to properly prepare and/or timely file such Form 10-K, where such failure results from the Securities Administrator’s inability or failure to obtain or receive, on a timely basis, any information from any other party hereto needed to prepare, arrange for execution or file such Form 10-K, not resulting from its own negligence, bad faith or willful misconduct.

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(c) Reports Filed on Form 8-K.

(i) Within four (4) Business Days after the occurrence of an event requiring disclosure on Form 8-K (each such event, a “Reportable Event”), and if requested by the Depositor, the Securities Administrator shall prepare and file on behalf of the Trust Fund any Form 8-K, as required by the Exchange Act, provided that the Depositor shall file the initial Form 8-K in connection with the issuance of the Certificates. Any disclosure or information related to a Reportable Event or that is otherwise required to be included on Form 8-K (“Form 8-K Disclosure Information”) shall be reported by the parties set forth on Exhibit N hereto to the Depositor and the Securities Administrator and reviewed and approved or disapproved by the Depositor pursuant to the following paragraph and the Securities Administrator will have no duty or liability for any failure hereunder to determine or prepare any Form 8-K Disclosure Information or any Form 8-K, except as set forth in the next paragraph.

(ii) As set forth on Exhibit [__] hereto, for so long as the Trust Fund is subject to the Exchange Act reporting requirements, no later than the end of business (New York City time) on the 2nd Business Day after the occurrence of a Reportable Event (i) the parties to this transaction shall be required to provide to the Securities Administrator and the Depositor, to the extent known by a Responsible Officer, with respect to the Trustee, and to the extent known by a responsible officer thereof, with respect to the other parties, a notice in the form of Exhibit [__] attached hereto, along with, in EDGAR-compatible form, or in such other form as otherwise agreed upon by the Securities Administrator and such party, the form and substance of any Form 8-K Disclosure Information, if applicable, together with an Additional Disclosure Notification and (ii) the Depositor will approve, as to form and substance, or disapprove, as the case may be, the inclusion of the Form 8-K Disclosure Information. The Depositor will be responsible for any reasonable fees and expenses assessed or incurred by the Securities Administrator in connection with including any Form 8-K Disclosure Information on Form 8-K pursuant to this paragraph.

(iii) After preparing the Form 8-K, the Securities Administrator shall forward electronically a copy of the Form 8-K to the Depositor for review. Promptly, but no later than the close of business on the 3rd Business Day after the Reportable Event, the Depositor shall notify the Securities Administrator in writing (which may be furnished electronically) of any changes to or approval of such Form 8-K. In the absence of receipt of any written changes or approval, the Securities Administrator shall be entitled to assume that such Form 8-K is in final form and the Securities Administrator may proceed with the execution and filing of the Form 8-K. No later than noon New York City time on the 4th Business Day after the Reportable Event, the Depositor shall sign the Form 8-K and return an electronic or fax copy of such signed Form 8-K (with an original executed hard copy to follow by overnight mail) to the Securities Administrator. If a Form 8-K cannot be filed on time or if a previously filed Form 8-K needs to be amended, the Securities Administrator will follow the procedures set forth in Section 6.21(d). Promptly (but no later than 1 Business Day) after filing with the Commission, the Securities Administrator will make available on its internet website a final executed copy of each Form 8-K prepared and filed by the Securities Administrator. The parties to this Agreement acknowledge that the performance by the Securities Administrator of its duties under this Section 6.21(c) related to the timely preparation and filing of Form 8-K is contingent upon such parties strictly observing all applicable deadlines in the performance of their duties under this Section 6.21(c)(ii). The Securities Administrator shall not have any liability for any loss, expense, damage or claim arising out of or with respect to any failure to properly prepare and/or timely file such Form 8-K, where such failure results from the Securities Administrator’s inability or failure to obtain or receive, on a timely basis, any information from any other party hereto needed to prepare, arrange for execution or file such Form 8-K, not resulting from its own negligence, bad faith or willful misconduct.

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(d) Delisting; Amendments; Late Filings.

(i) If the Depositor determines that the requirements for suspension of  the Trust Fund’s Exchange Act reporting requirements set forth in Rule 15d-22(b) of the Exchange Act and  any other applicable regulation are satisfied, it shall so notify the Securities Administrator.  Following receipt of such notice, the Securities Administrator shall prepare and file a Form 15 Suspension Notification with respect to the Trust Fund under the Exchange Act (a “Form 15”).  Subsequent to the filing of a Form 15, if the Depositor determines that the Trust Fund has once again become subject to the Exchange Act reporting requirements, then it shall promptly notify the Securities Administrator, and the Securities Administrator shall recommence preparing and filing required Exchange Act reports.  Prior to January 30 of the following calendar year, the Securities Administrator shall, if directed to do so by the Depositor, in accordance with industry standards, prepare and file a Form 15.

In connection with any direct offering of Certificates by the Depositor, in an offering registered with the Commission, subsequent to the filing of a Form 15 pursuant to the preceding paragraph: (1) the Depositor shall notify the Securities Administrator in writing not less than 10 days prior to the date on which such offering will be made; (2) the Depositor shall cause to be prepared and filed the initial current report on Form 8-K required to be filed in connection with such offering; (3) the Securities Administrator, as directed by the Depositor, shall file a report on Form 10-D for the Distribution Date following the month in which such offering occurs and, thereafter, any reports on forms 8-K, 10-K and 10-D in respect of the Trust Fund as and to the extent required under the Exchange Act, as set forth in this Section (other than the report referred to in clause (2) above); (4) the Depositor shall be responsible for notifying the other parties to the transaction of such offering and that the obligations of such parties to provide information in connection with the Depositor’s  Exchange Act reporting requirements have been reinstated; and (5) the Depositor shall be responsible for all reasonable fees and expenses incurred by the Securities Administrator in connection with such offering, including its review and approval of any offering document and any amendment to any transaction document made in connection with such offering.

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(i) In the event that the Securities Administrator is unable to timely file with the Commission all or any required portion of any Form 8-K, 10-D or 10-K required to be filed by this Agreement because required disclosure information was either not delivered to it or delivered to it after the delivery deadlines set forth in this Agreement or for any other reason, the Securities Administrator will promptly, but no later than within one Business Day, notify electronically the Depositor. In the case of Form 10-D and 10-K, the parties to this Agreement will cooperate to prepare and file a Form 12b-25 and a 10-D/A or 10-K/A, as applicable, pursuant to Rule 12b-25 of the Exchange Act. In the case of Form 8-K, the Securities Administrator will, upon receipt of all required Form 8-K Disclosure Information and upon the approval and direction of the Depositor, include such disclosure information on the next Form 10-D. In the event that any previously filed Form 8-K, 10-D or 10-K needs to be amended to include additional disclosure in connection with any additional Form 10-D disclosure (other than for the purpose of restating any Distribution Date Statement), additional Form 10-K or Form 8-K disclosure information, the Securities Administrator will electronically notify the Depositor and the affected parties and the Securities Administrator shall prepare and file, and such parties will cooperate in the preparation and filing of any necessary Form 8-K/A, 10-D/A or 10-K/A. Any Form 15, Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K shall be signed by the Depositor. The parties to this Agreement acknowledge that the performance by the Securities Administrator of its duties under this Section 6.21(d) related to the timely preparation and filing of Form 15, a Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K is contingent upon each such party performing its duties under this Section. Neither the Securities Administrator nor the Master Servicer shall have any liability for any loss, expense, damage or claim arising out of or with respect to any failure to properly prepare and/or timely file any such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, where such failure results from the Securities Administrator’s inability or failure to obtain or receive, on a timely basis, any information from any other party hereto needed to prepare, arrange for execution or file such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, not resulting from its own negligence, bad faith or willful misconduct.

Notwithstanding anything to the contrary herein, the Securities Administrator shall not file any Form 8-K, Form 10-D or Form 10K as to which it has received from the Depositor a notice to the effect that, upon review of the proposed filing, the Depositor does not approve of such filing.

(e) Sarbanes-Oxley Certification.

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Each Form 10-K shall include a certification (the “Sarbanes-Oxley Certification”), required to be included therewith pursuant to the Sarbanes-Oxley Act. Each Servicer, the Master Servicer and the Securities Administrator shall provide, and each Servicer, the Master Servicer and the Securities Administrator shall cause any Servicing Function Participant engaged by it to provide, to the Person who signs the Sarbanes-Oxley Certification (the “Certifying Person”), by March 15 following each year in which the Trust Fund is subject to the reporting requirements of the Exchange Act and otherwise within a reasonable period of time upon request, a certification (each, a “Back-Up Certification”), in the form attached hereto as Exhibit J (or in such other form attached to the applicable Servicing Agreement), upon which the Certifying Person, the entity for which the Certifying Person acts as an officer, and such entity’s officers, directors and Affiliates (collectively with the Certifying Person, “Certification Parties”) can reasonably rely. The Depositor shall serve as the Certifying Person on behalf of the Trust Fund. In the event any such party or any Servicing Function Participant engaged by such party is terminated or resigns pursuant to the terms of this Agreement, or any applicable sub-servicing agreement, as the case may be, such party shall provide a Back-Up Certification to the Certifying Person pursuant to this Section 6.21(e) with respect to the period of time it was subject to this Agreement or any applicable sub-servicing agreement, as the case may be.

The Master Servicer shall enforce any obligation of the Servicers, to the extent set forth in the related Servicing Agreement, to deliver to the Master Servicer a certification similar to the Back-Up Certification as may be required pursuant to the related Servicing Agreement.

Section 6.22 Annual Statements of Compliance.

(a) The Master Servicer, the Securities Administrator and each Servicer shall deliver or otherwise make available (and the Master Servicer, the Securities Administrator and each Servicer shall cause any Additional Servicer engaged by it to deliver or otherwise make available) to the Depositor and the Securities Administrator on or before March 15 of each year, commencing in March 20__, an Officer’s Certificate (an “Item 1123 Certificate”) stating, as to the signer thereof, that (A) a review of such party’s activities during the preceding calendar year or portion thereof and of such party’s performance under this Agreement, or such other applicable agreement in the case of an Additional Servicer, has been made under such officer’s supervision and (B) to the best of such officer’s knowledge, based on such review, such party has fulfilled all its obligations under this Agreement, or such other applicable agreement in the case of an Additional Servicer, in all material respects throughout such year or portion thereof, or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status thereof. Promptly after receipt of each such Item 1123 Certificate, the Depositor shall review such Item 1123 Certificate and, if applicable, consult with each such party, as applicable, as to the nature of any failures by such party, in the fulfillment of any of such party’s obligations hereunder or, in the case of an Additional Servicer, under such other applicable agreement.

(b) The Master Servicer shall include all Item 1123 Certificates received by it from each Servicer with its Item 1123 Certificate to be submitted to the Securities Administrator pursuant to this Section.

(c) In the event the Master Servicer, the Securities Administrator or any Additional Servicer engaged by any such party is terminated or resigns pursuant to the terms of this Agreement, or any applicable agreement in the case of an Additional Servicer, as the case may be, such party shall provide an Item 1123 Certificate pursuant to this Section 6.22 or to such applicable agreement, as the case may be, notwithstanding any such termination, assignment or resignation.

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(d) The Master Servicer shall enforce any obligation of any Servicer, to the extent set forth in the related Servicing Agreement, to deliver to the Master Servicer an Item 1123 Certificate as may be required pursuant to the related Servicing Agreement. The Master Servicer shall include such Item 1123 Certificate with its own Item 1123 Certificate to be submitted to the Securities Administrator and the Depositor pursuant to this Section.

Section 6.23 Annual Assessments of Compliance.

(a) By March 15 of each year, commencing in March 20__, the Master Servicer and the Securities Administrator and each Servicer, each at its own expense, shall furnish or otherwise make available, and each such party shall cause any Servicing Function Participant engaged by it to furnish or otherwise make available, each at its own expense, to the Securities Administrator and the Depositor, a report on an assessment of compliance with the Relevant Servicing Criteria (an “Assessment of Compliance”) that contains (A) a statement by such party of its responsibility for assessing compliance with the Relevant Servicing Criteria, (B) a statement that such party used the Relevant Servicing Criteria to assess compliance with the Relevant Servicing Criteria, (C) such party’s Assessment of Compliance with the Relevant Servicing Criteria as of and for the fiscal year covered by the Form 10-K required to be filed pursuant to Section 6.21(b), including, if there has been any material instance of noncompliance with the Relevant Servicing Criteria, a discussion of each such failure and the nature and status thereof, and (D) a statement that a registered public accounting firm has issued an Accountant’s Attestation on such party’s Assessment of Compliance with the Relevant Servicing Criteria as of and for such period.

(b) No later than the end of each fiscal year for the Trust Fund for which a 10-K is required to be filed, each Servicer and the Master Servicer shall each forward to the Securities Administrator the name of each Servicing Function Participant engaged by it and what Relevant Servicing Criteria will be addressed in the Assessment of Compliance prepared by such Servicing Function Participant (provided, however, that the Master Servicer need not provide such information to the Securities Administrator so long as the Master Servicer and the Securities Administrator are the same person). When the Master Servicer and each Servicer (or any Servicing Function Participant engaged by them) submit their Assessments of Compliance to the Securities Administrator, such parties will also at such time include the Assessments of Compliance (and Accountant’s Attestation), pursuant to Sections 6.23 and 6.24, of each Servicing Function Participant engaged by it.

(c) Promptly after receipt of each Assessment of Compliance, (i) the Depositor shall review each such report and, if applicable, consult with the Master Servicer, the Securities Administrator, a Servicer, the Custodian and any Servicing Function Participant engaged by such parties as to the nature of any material instance of noncompliance with the Relevant Servicing Criteria by each such party, and (ii) the Securities Administrator shall confirm that the Assessments of Compliance, taken individually, address the Relevant Servicing Criteria for each party as set forth on Exhibit K and on any similar exhibit set forth in each Servicing Agreement in respect of each Servicer and notify the Depositor of any exceptions. None of such parties will be required to deliver any such assessments until March 30 in any given year so long as it has received written confirmation from the Depositor that a Form 10-K is not required to be filed in respect of the Trust Fund for the preceding calendar year.

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(d) The Master Servicer shall include all Assessments of Compliance received by it from the Servicers with its own Assessment of Compliance to be submitted to the Securities Administrator pursuant to this Section.

(e) In the event the Master Servicer, the Securities Administrator or any Servicing Function Participant engaged by any such party is terminated, assigns its rights and obligations under or resigns pursuant to, the terms of this Agreement, or any other applicable agreement, as the case may be, such party shall provide an Assessment of Compliance pursuant to this Section 6.23, or to such other applicable agreement, notwithstanding any termination, assignment or resignation.

(f) The Master Servicer shall enforce any obligation of the Servicers and the Custodian, to the extent set forth in the related Servicing Agreement or the Custodial Agreement, as applicable, to deliver to the Master Servicer an Assessment of Compliance within the time frame set forth in, and in such form and substance as may be required pursuant to, the related Servicing Agreement or the Custodial Agreement, as applicable. The Master Servicer shall include such Assessment of Compliance with its own Assessment of Compliance to be submitted to the Securities Administrator pursuant to this Section.

Section 6.24 Accountant’s Attestation.

(a) By March 15 of each year, commencing in 20__, the Master Servicer, the Securities Administrator and each Servicer, each at its own expense, shall cause, and each such party shall cause any Servicing Function Participant engaged by it to cause, each at its own expense, a registered public accounting firm (which may also render other services to the Master Servicer, the Securities Administrator or a Servicer or such other Servicing Function Participants, as the case may be) and that is a member of the American Institute of Certified Public Accountants to furnish a report (the “Accountant’s Attestation”) to the Securities Administrator and the Depositor, to the effect that (i) it has obtained a representation regarding certain matters from the management of such party, which includes an assertion that such party has complied with the Relevant Servicing Criteria, and (ii) on the basis of an examination conducted by such firm in accordance with standards for attestation engagements issued or adopted by the PCAOB, it is expressing an opinion as to whether such party’s compliance with the Relevant Servicing Criteria was fairly stated in all material respects, or it cannot express an overall opinion regarding such party’s Assessment of Compliance with the Relevant Servicing Criteria. In the event that an overall opinion cannot be expressed, such registered public accounting firm shall state in such report why it was unable to express such an opinion. Such report must be available for general use and not contain restricted use language.

(b) Promptly after receipt of such Accountant’s Attestations from the Master Servicer, each Servicer, each Custodian, the Securities Administrator or any Servicing Function Participant engaged by such parties, (i) the Depositor shall review the report and, if applicable, consult with such parties as to the nature of any defaults by such parties, in the fulfillment of any of each such party’s obligations hereunder or under any other applicable agreement, and (ii) the Securities Administrator shall confirm that each Assessment of Compliance is coupled with an Accountant’s Attestation meeting the requirements of this Section and notify the Depositor of any exceptions. None of such parties shall be required to deliver any such assessments until March 30 in any given year so long as it has received written confirmation from the Depositor that a Form 10-K is not required to be filed in respect of the Trust Fund for the preceding calendar year.

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(c) The Master Servicer shall include each Accountant’s Attestation furnished to it by the Servicers with its own Accountant’s Attestation to be submitted to the Securities Administrator pursuant to this Section.

(d) In the event the Master Servicer, the Securities Administrator, the Custodian, any Servicer or Servicing Function Participant engaged by any such party, is terminated, assigns its rights and duties under, or resigns pursuant to the terms of, this Agreement, or the Custodial Agreement, Servicing Agreement or sub-servicing agreement, as the case may be, such party shall at its own expense cause a registered public accounting firm to provide an Accountant’s Attestation pursuant to this Section 6.24, or other applicable agreement, notwithstanding any such termination, assignment or resignation.

(e) The Master Servicer shall enforce any obligation of the Servicers and the Custodian, to the extent set forth in the related Servicing Agreement and the Custodial Agreement, as applicable, to deliver to the Master Servicer an attestation as may be required pursuant to, the related Servicing Agreement or the Custodial Agreement, as applicable. The Master Servicer shall include each such attestation with its own Accountant’s Attestation to be submitted to the Securities Administrator pursuant to this Section.

ARTICLE VII

PURCHASE OF MORTGAGE LOANS AND
TERMINATION OF THE TRUST FUND

Section 7.01 Purchase of Mortgage Loans; Termination of Trust Fund Upon Purchase or Liquidation of All Mortgage Loans.

(a) The respective obligations and responsibilities of the Trustee, the Securities Administrator and the Master Servicer created hereby (other than the obligation of the Securities Administrator to make payments to the Certificateholders as set forth in Section 7.02), shall terminate on the earliest of (i) the final payment or other liquidation of the last Mortgage Loan remaining in the Trust Fund and the disposition of all REO Property, (ii) the sale of the property held by the Trust Fund in accordance with Section 7.01(b) (if the Holder of the Class LT-R Certificate chooses to sell the assets of the Trust Fund in connection with the redemption of the Certificates) and (iii) the Distribution Date immediately following the Latest Possible Maturity Date; provided, however, that in no event shall the Trust Fund created hereby continue beyond the expiration of 21 years from the death of the last survivor of the descendants of Joseph P. Kennedy, the late Ambassador of the United States to the Court of St. James’s, living on the date hereof. Any termination of the Trust Fund shall be carried out in such a manner so that the termination of each REMIC included therein shall qualify as a “qualified liquidation” under the REMIC Provisions.

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(b) The Holder of the Class LT-R Certificate shall have the option to instruct the Trustee to redeem the Certificates, in whole but not in part, on any Distribution Date on or after the date on which the Aggregate Stated Principal Balance is equal to or less than [20]% of the Aggregate Stated Principal Balance as of the Cut-off Date. If the Holder of the Class LT-R Certificate elects to cause a redemption of the Certificates, it shall, no later than 30 days prior to the Distribution Date selected for redemption (the “Redemption Date”), deliver written notice to the Trustee and the Securities Administrator and either (a) deposit in the Distribution Account the Redemption Price therefor or (b) state in such notice that the Redemption Price shall be deposited in the Distribution Account not later than 10:00 a.m., New York City time on the applicable Redemption Date. In connection with such redemption, if the Holder of the Class LT-R Certificate elects to liquidate the assets of the Trust Fund, such Holder shall cause the Trustee to cause each REMIC to adopt a plan of complete liquidation by complying with the provisions of Section 7.03. If any Restricted Holder purchases (or provides financing for) the Certificates, the purchase price to be paid by such Restricted Holder for the assets of the Trust Fund shall not be less than the fair market value of those assets, as determined by an appraiser or appraisers selected by the Depositor and agreed upon by the Trustee.

(c) [Reserved].

(d) The Depositor, the Master Servicer, each Servicer, the Securities Administrator and the Custodian shall be reimbursed from the Redemption Price, for any Advances, Servicer Advances, accrued and unpaid Servicing Fees and Master Servicing Fees or other amounts with respect to the related Mortgage Loans that are reimbursable to such parties under this Agreement, the related Servicing Agreement or the Custodial Agreement.

Section 7.02 Procedure Upon Redemption and Termination of Trust Fund.

(a) If on any Determination Date the Master Servicer determines that there are no outstanding Mortgage Loans, and no other funds or assets in the Trust Fund other than the funds in the Distribution Account, the Master Servicer shall direct the Securities Administrator promptly to send a final distribution notice to each Certificateholder. Such notice shall specify (A) the Distribution Date upon which final distribution on the Certificates of all amounts required to be distributed to Certificateholders pursuant to Section 5.02 will be made upon presentation and surrender of the Certificates at the Certificate Registrar’s Corporate Trust Office, and (B) that the Record Date otherwise applicable to such Distribution Date is not applicable, distribution being made only upon presentation and surrender of the Certificates at the office or agency of the Certificate Registrar therein specified. The Securities Administrator shall give such notice to the Trustee, the Master Servicer and the Certificate Registrar at the time such notice is given to Holders of the Certificates. Upon any such termination, the duties of the Certificate Registrar with respect to the Certificates shall terminate.

Upon termination of the Trust Fund, the Securities Administrator shall terminate, or request the Master Servicer to terminate, the Distribution Account and any other account or fund maintained with respect to the Certificates, subject to the Securities Administrator’s obligation hereunder to hold all amounts payable to Certificateholders in trust without interest pending such payment.

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(b) In the event that all of the Holders do not surrender their Certificates for cancellation within three months after the time specified in the termination notice, the Securities Administrator shall give a second written notice to the remaining Certificateholders to surrender their Certificates for cancellation and receive the final distribution with respect thereto. If within one year after the second notice any Certificates shall not have been surrendered for cancellation, the Securities Administrator may take appropriate steps to contact the remaining Certificateholders concerning surrender of such Certificates, and the cost thereof shall be paid out of the amounts distributable to such Holders. If within two years after the second notice any Certificates shall not have been surrendered for cancellation, the Securities Administrator shall, subject to applicable state law relating to escheatment, hold all amounts distributable to such Holders for the benefit of such Holders. No interest shall accrue on any amount held by the Securities Administrator and not distributed to a Certificateholder due to such Certificateholder’s failure to surrender its Certificate(s) for payment of the final distribution thereon in accordance with this Section.

(c) Any reasonable expenses incurred by the Securities Administrator or the Trustee in connection with any redemption or termination or liquidation of the Trust Fund shall be reimbursed from proceeds received from the liquidation of the Trust Fund.

Section 7.03 Additional Trust Fund Termination Requirements.

(a) Any termination of the Trust Fund shall be effected in accordance with the following additional requirements, unless the Securities Administrator and the Trustee receive an Opinion of Counsel (at the expense of the Depositor), addressed to the Securities Administrator and the Trustee to the effect that the failure of the Trust Fund to comply with the requirements of this Section 7.03 will not result in an Adverse REMIC Event:

(i) Within 89 days prior to the time of the making of the final payment on the Certificates, upon notification by the Holder of the Class LT-R Certificate that it intends to exercise its option to cause the termination of the Trust Fund, the Trustee shall adopt a plan of complete liquidation of the Trust Fund on behalf of each REMIC, meeting the requirements of a qualified liquidation under the REMIC Provisions;

(ii) Any sale of the assets of the Trust Fund pursuant to Section 7.01 shall be a sale for cash and shall occur at or after the time of adoption of such a plan of complete liquidation and prior to the time of making of the final payment on or credit to the Certificates, and upon the closing of such a sale, the Trustee shall deliver or cause the Custodian to deliver the assets to the purchaser thereof as instructed by the Holder of the Class LT-R Certificate;

(iii) On the date specified for final payment of the Certificates, the Securities Administrator shall make final distributions of principal and interest on the Certificates in accordance with Section 5.02 and, after payment of, or provision for any outstanding expenses, distribute or credit, or cause to be distributed or credited, to the Holders of the Residual Certificates all cash on hand after such final payment (other than cash retained to meet claims), and the Trust Fund (and each REMIC) shall terminate at that time; and

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(iv) In no event may the final payment on or credit to the Certificates or the final distribution or credit to the Holders of the Residual Certificates be made after the 89th day from the date on which the plan of complete liquidation is adopted.

(b) By its acceptance of a Residual Certificate, each Holder thereof hereby agrees to accept the plan of complete liquidation adopted by the Trustee under this Section and to take such other action in connection therewith as may be reasonably requested by the Securities Administrator or any Servicer.

ARTICLE VIII

RIGHTS OF CERTIFICATEHOLDERS

Section 8.01 Limitation on Rights of Holders.

(a) The death or incapacity of any Certificateholder shall not operate to terminate this Agreement or this Trust Fund, nor entitle such Certificateholder’s legal representatives or heirs to claim an accounting or take any action or proceeding in any court for a partition or winding up of this Trust Fund, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. Except as otherwise expressly provided herein, no Certificateholder, solely by virtue of its status as a Certificateholder, shall have any right to vote or in any manner otherwise control the Master Servicer or the operation and management of the Trust Fund, or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Certificates, be construed so as to constitute the Certificateholders from time to time as partners or members of an association, nor shall any Certificateholder be under any liability to any third person by reason of any action taken by the parties to this Agreement pursuant to any provision hereof.

(b) No Certificateholder, solely by virtue of its status as Certificateholder, shall have any right by virtue or by availing of any provision of this Agreement to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Agreement, unless such Holder previously shall have given to the Trustee a written notice of an Event of Default and of the continuance thereof, as hereinbefore provided, and unless also the Holders of Certificates evidencing not less than 25% of the Class Principal Amount or Class Notional Amount (or Percentage Interest) of Certificates of each Class affected thereby shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the cost, expenses and liabilities to be incurred therein or thereby, and the Trustee, for sixty days after its receipt of such notice, request and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding and no direction inconsistent with such written request has been given such Trustee during such sixty-day period by such Certificateholders; it being understood and intended, and being expressly covenanted by each Certificateholder with every other Certificateholder, the Securities Administrator and the Trustee, that no one or more Holders of Certificates shall have any right in any manner whatever by virtue or by availing of any provision of this Agreement to affect, disturb or prejudice the rights of the Holders of any other of such Certificates, or to obtain or seek to obtain priority over or preference to any other such Holder, or to enforce any right under this Agreement, except in the manner herein provided and for the benefit of all Certificateholders. For the protection and enforcement of the provisions of this Section, each and every Certificateholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

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Section 8.02 Access to List of Holders.

(a) If the Trustee is not acting as Certificate Registrar, the Certificate Registrar will furnish or cause to be furnished to the Trustee, within fifteen days after receipt by the Certificate Registrar of a request by the Trustee in writing, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Certificateholders of each Class as of the most recent Record Date.

(b) If three or more Holders or Certificate Owners (hereinafter referred to as “Applicants”) apply in writing to the Certificate Registrar, and such application states that the Applicants desire to communicate with other Holders with respect to their rights under this Agreement or under the Certificates and is accompanied by a copy of the communication which such Applicants propose to transmit, then the Certificate Registrar shall, within five Business Days after the receipt of such application, afford such Applicants reasonable access during the normal business hours of the Certificate Registrar to the most recent list of Certificateholders held by the Certificate Registrar or shall, as an alternative, send, at the Applicants’ expense, the written communication proffered by the Applicants to all Certificateholders at their addresses as they appear in the Certificate Register.

(c) Every Holder or Certificate Owner, if the Holder is a Clearing Agency, by receiving and holding a Certificate, agrees with the Depositor, the Master Servicer, the Securities Administrator, the Certificate Registrar and the Trustee that neither the Depositor, the Master Servicer, the Securities Administrator, the Certificate Registrar nor the Trustee shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Certificateholders hereunder, regardless of the source from which such information was derived.

Section 8.03 Acts of Holders of Certificates.

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Agreement to be given or taken by Holders or Certificate Owners, if the Holder is a Clearing Agency, may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and the Securities Administrator and, where expressly required herein, to the Master Servicer. Such instrument or instruments (as the action embodies therein and evidenced thereby) are herein sometimes referred to as an “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agents shall be sufficient for any purpose of this Agreement and conclusive in favor of the Trustee, the Securities Administrator and the Master Servicer, if made in the manner provided in this Section. Each of the Trustee, the Securities Administrator and the Master Servicer shall promptly notify the others of receipt of any such instrument by it, and shall promptly forward a copy of such instrument to the others.

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(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments or deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Whenever such execution is by an officer of a corporation or a member of a partnership on behalf of such corporation or partnership, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the individual executing the same, may also be proved in any other manner which the Trustee or the Securities Administrator deems sufficient.

(c) The ownership of Certificates (whether or not such Certificates shall be overdue and notwithstanding any notation of ownership or other writing thereon made by anyone other than the Trustee) shall be proved by the Certificate Register, and neither the Trustee, the Securities Administrator, the Master Servicer, nor the Depositor shall be affected by any notice to the contrary.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Certificate shall bind every future Holder of the same Certificate and the Holder of every Certificate issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Trustee, the Securities Administrator or the Master Servicer in reliance thereon, whether or not notation of such action is made upon such Certificate.

ARTICLE IX

ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER

Section 9.01 Duties of the Master Servicer; Enforcement of Servicer's and Master Servicer's Obligations.

(a) The Master Servicer, on behalf of the Trustee, the Depositor and the Certificateholders shall, from and after the Closing Date, monitor the performance of the Servicers under the Servicing Agreements, and shall use its reasonable good faith efforts to cause the Servicers duly and punctually to perform all of their duties and obligations thereunder. Upon the occurrence of a default of which an Authorized Officer of the Master Servicer has actual knowledge under a Servicing Agreement, the Master Servicer shall promptly notify the Trustee thereof, and shall specify in such notice the action, if any, the Master Servicer is taking in respect of such default. So long as any such default shall be continuing, the Master Servicer, or if such Servicer is [                 ], the Trustee, may, and shall if it determines such action to be in the best interests of Certificateholders, (i) terminate all of the rights and powers of such Servicer pursuant to the applicable provisions of the Servicing Agreement; (ii) exercise any rights it may have to enforce the Servicing Agreement against such Servicer; and/or (iii) waive any such default under the Servicing Agreement or take any other action with respect to such default as is permitted thereunder. In addition, under the Servicing Agreements, the Master Servicer shall be obligated to perform (as agent on behalf of the Depositor) with respect to the Mortgage Loans, certain of the Depositor’s default administration obligations hereunder and under the Servicing Agreements. Notwithstanding any provision of this Agreement or any Servicing Agreement to the contrary, the Master Servicer shall have no duty or obligation to supervise, monitor or oversee the activities of, or to enforce the obligations of, any Servicer under its Servicing Agreement with respect to any Additional Collateral or any Limited Purpose Surety Bond relating thereto, including, without limitation, the collection of any amounts owing to the Trust Fund in respect thereof (unless and until the Master Servicer shall have assumed the obligations of such Servicer as successor servicer under the related Servicing Agreement pursuant to this Section 9.01, in which case, as successor servicer, it shall be bound to serve and administer the Additional Collateral and any related Limited Purpose Surety Bond in accordance with the provisions of such Servicing Agreement).

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(b) Upon any termination by the Master Servicer of a Servicer’s rights and powers pursuant to its Servicing Agreement, the rights and powers of the Servicer with respect to the Mortgage Loans shall vest in the Master Servicer and the Master Servicer shall be the successor in all respects to such Servicer in its capacity as Servicer with respect to such Mortgage Loans under the related Servicing Agreement, unless or until the Master Servicer shall have appointed, with the consent of the Trustee and the Rating Agencies, such consent not to be unreasonably withheld, and in accordance with the applicable provisions of the Servicing Agreement, a new Fannie Mae- or FHLMC-approved Person that is a member in good standing of MERS to serve as successor to the Servicer; provided, however, that no Trustee consent or Rating Agency approval shall be required if the successor servicer is a Person that was a Servicer on the Closing Date; provided, further, that it is understood and agreed by the parties hereto that there will be a period of transition (not to exceed 90 days) before the actual servicing functions can be fully transferred to a successor servicer (including the Master Servicer). With such consent, the Master Servicer may elect to continue to serve as successor servicer under the Servicing Agreement. Upon appointment of a successor servicer, as authorized under this Section 9.01(b), unless the successor servicer shall have assumed the obligation of the terminated Servicer under such Servicing Agreement, the Master Servicer, the Trustee and such successor servicer shall enter into a servicing agreement in a form substantially similar to the affected Servicing Agreement. In connection with any such appointment, the Master Servicer may make such arrangements for the compensation of such successor as it and such successor shall agree, but in no event shall such compensation of any successor servicer (including the Master Servicer) be in excess of that payable to the Servicer under the affected Servicing Agreement.

The Master Servicer, or if such Servicer is [               ], the Trustee, shall pay the costs of such enforcement (including the termination of any Servicer, the appointment of a successor servicer or the transfer and assumption of the servicing by the Master Servicer) at its own expense and shall be reimbursed therefor initially (i) by the terminated Servicer, (ii) from a general recovery resulting from such enforcement only to the extent, if any, that such recovery exceeds all amounts due in respect of the related Mortgage Loans, (iii) from a specific recovery of costs, expenses or attorney’s fees against the party against whom such enforcement is directed, or (iv) to the extent that such amounts described in (i)-(iii) above are insufficient to reimburse the Master Servicer for such costs of enforcement, from the Trust Fund, as provided in Section 9.04.

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If the Master Servicer assumes the servicing with respect to any of the Mortgage Loans, it will not assume liability for the representations and warranties of any Servicer it replaces or for the errors or omissions of such Servicer.

(c) Upon any termination of a Servicer’s rights and powers pursuant to its Servicing Agreement, the Master Servicer shall promptly notify the Trustee and each Rating Agencies through the Rule 17g-5 Information Provider, specifying in such notice that the Master Servicer or any successor servicer, as the case may be, has succeeded the Servicer under the Servicing Agreement, which notice shall also specify the name and address of any such successor servicer.

(d) Unless otherwise specified herein, the provisions of Section 9.01(b) (relating to the Fannie Mae- and Freddie Mac- approval and MERS membership of any successor servicer, the form of any servicing agreement to be entered into by such successor servicer and the amount of compensation payable thereunder) and the provisions of Section 9.01(c) (relating to notices to the Trustee, the Securities Administrator and the Rating Agencies) shall apply to any proposed transfer or assignment by the Seller of its rights under any Servicing Agreement or of the servicing thereunder or delegation of its rights or duties thereunder or any portion thereof to any other Person other than the initial Servicer under such Servicing Agreement; provided that the Seller shall not be required to provide prior notice to anyone other than the Master Servicer of any transfer of servicing that occurs within four months following the Closing Date to an entity that is a Servicer on the Closing Date. In addition, neither the Depositor nor the Trustee shall consent to the assignment by any Servicer of such Servicer’s rights and obligations under the Servicing Agreement to a successor servicer other than a Person that was a Servicer on the Closing Date without the prior written consent of the Master Servicer, which consent shall not be unreasonably withheld.

In connection with any transfer of servicing (whether to another initial Servicer, or otherwise), the Seller shall, at its cost and expense, take such steps, or cause the terminated Servicer to take such steps, as may be necessary or appropriate to effectuate and evidence the transfer of the servicing of the Mortgage Loans to such successor servicer, including, but not limited to, the following: (A) to the extent required by the terms of the Mortgage Loans and by applicable federal and state laws and regulations, the Seller shall cause the prior Servicer to timely mail to each obligor under a Mortgage Loan any required notices or disclosures describing the transfer of servicing of the Mortgage Loans to the successor servicer; (B) prior to the effective date of such transfer of servicing, the Seller shall cause the prior Servicer to transmit to any related insurer notification of such transfer of servicing; (C) on or prior to the effective date of such transfer of servicing, the Seller shall cause the prior Servicer to deliver to the successor servicer all Mortgage Documents and any related records or materials; (D) on or prior to the effective date of such transfer of servicing, the Seller shall cause the prior Servicer to transfer to the successor servicer all funds held by the prior Servicer in respect of the Mortgage Loans; (E) on or prior to the effective date of such transfer of servicing, the Seller shall cause the prior Servicer to, after the effective date of the transfer of servicing to the successor servicer, continue to forward to such successor servicer, within one Business Day of receipt, the amount of any payments or other recoveries received by the prior Servicer, and to notify the successor servicer of the source and proper application of each such payment or recovery; and (F) the Seller shall cause the prior Servicer to, after the effective date of transfer of servicing to the successor servicer, continue to cooperate with the successor servicer to facilitate such transfer in such manner and to such extent as the successor servicer may reasonably request. Notwithstanding the foregoing, the prior Servicer shall be obligated to perform the items listed above to the extent provided in the Servicing Agreement.

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Section 9.02 Assumption of Master Servicing by Trustee.

(a) In the event the Master Servicer shall for any reason no longer be the Master Servicer (including by reason of any Event of Default under this Agreement), the Trustee shall thereupon, in accordance with the terms of Section 6.14 hereof, assume all of the rights and obligations of such Master Servicer hereunder and under each Servicing Agreement entered into with respect to the Mortgage Loans or shall appoint as successor master servicer a Fannie-Mae or FHLMC-approved servicer that is acceptable to the Depositor and the Rating Agencies. The Trustee, its designee or any successor master servicer appointed by the Trustee shall be deemed to have assumed all of the Master Servicer’s interest herein and therein to the same extent as if such Servicing Agreement had been assigned to the assuming party, except that the Master Servicer shall not thereby be relieved of any liability or obligations of the Master Servicer under such Servicing Agreement accruing prior to its replacement as Master Servicer, and shall be liable to the Trustee, and hereby agrees to indemnify and hold harmless the Trustee from and against all costs, damages, expenses and liabilities (including reasonable attorneys’ fees) incurred by the Trustee as a result of such liability or obligations of the Master Servicer and in connection with the Trustee’s assumption (but not its performance, except to the extent that costs or liability of the Trustee are created or increased as a result of negligent or wrongful acts or omissions of the Master Servicer prior to its replacement as Master Servicer) of the Master Servicer’s obligations, duties or responsibilities thereunder.

(b) The Master Servicer that has been terminated shall, upon request of the Trustee but at the expense of such Master Servicer, deliver to the assuming party all documents and records relating to each Servicing Agreement and the related Mortgage Loans and an accounting of amounts collected and held by it and otherwise use its best efforts to effect the orderly and efficient transfer of each Servicing Agreement to the assuming party.

Section 9.03 Representations and Warranties of the Master Servicer.

(a) The Master Servicer hereby represents and warrants to the Depositor, the Securities Administrator and the Trustee, for the benefit of the Certificateholders, as of the Closing Date that:

(i) it is validly existing and in good standing under the laws of the United States of America as a national banking association, and as Master Servicer has full power and authority to transact any and all business contemplated by this Agreement and to execute, deliver and comply with its obligations under the terms of this Agreement, the execution, delivery and performance of which have been duly authorized by all necessary corporate action on the part of the Master Servicer;

(ii) the execution and delivery of this Agreement by the Master Servicer and its performance and compliance with the terms of this Agreement will not (A) violate the Master Servicer’s charter or bylaws, (B) violate any law or regulation or any administrative decree or order to which it is subject or (C) constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the breach of, any material contract, agreement or other instrument to which the Master Servicer is a party or by which it is bound or to which any of its assets are subject, which violation, default or breach would materially and adversely affect the Master Servicer’s ability to perform its obligations under this Agreement;

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(iii) this Agreement constitutes, assuming due authorization, execution and delivery hereof by the other respective parties hereto, a legal, valid and binding obligation of the Master Servicer, enforceable against it in accordance with the terms hereof, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights in general, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law);

(iv) the Master Servicer is not in default with respect to any order or decree of any court or any order or regulation of any federal, state, municipal or governmental agency to the extent that any such default would materially and adversely affect its performance hereunder;

(v) the Master Servicer is not a party to or bound by any agreement or instrument or subject to any charter provision, bylaw or any other corporate restriction or any judgment, order, writ, injunction, decree, law or regulation that may materially and adversely affect its ability as Master Servicer to perform its obligations under this Agreement or that requires the consent of any third person to the execution of this Agreement or the performance by the Master Servicer of its obligations under this Agreement;

(vi) no litigation is pending or, to the best of the Master Servicer’s knowledge, threatened against the Master Servicer which would prohibit its entering into this Agreement or performing its obligations under this Agreement;

(vii) the Master Servicer, or an affiliate thereof the primary business of which is the servicing of conventional residential mortgage loans, is a Fannie Mae- or FHLMC-approved seller/servicer;

(viii) no consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Master Servicer of or compliance by the Master Servicer with this Agreement or the consummation of the transactions contemplated by this Agreement, except for such consents, approvals, authorizations and orders (if any) as have been obtained; and

(ix) the consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Master Servicer;

(b) It is understood and agreed that the representations and warranties set forth in this Section shall survive the execution and delivery of this Agreement. In addition to any indemnity required pursuant to Section 11.16 hereof, the Master Servicer shall indemnify the Depositor, the Securities Administrator and the Trustee and hold them harmless against any loss, damages, penalties, fines, forfeitures, legal fees and related costs, judgments, and other costs and expenses resulting from any claim, demand, defense or assertion based on or grounded upon, or resulting from, a material breach of the Master Servicer’s representations and warranties contained in Section 9.03(a) or any failure by the Master Servicer to deliver any information, report, certification, accountants’ letter or other material when and as required under this Agreement. It is understood and agreed that the enforcement of the obligation of the Master Servicer set forth in this Section to indemnify the Depositor, the Securities Administrator and the Trustee as provided in this Section constitutes the sole remedy (other than as set forth in Section 6.14) of the Depositor, the Securities Administrator and the Trustee, respecting a breach of the foregoing representations and warranties. Such indemnification shall survive any termination of the Master Servicer as Master Servicer hereunder, and any termination of this Agreement.

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Any cause of action against the Master Servicer relating to or arising out of the breach of any representations and warranties made in this Section shall accrue upon discovery of such breach by either the Depositor, the Master Servicer or the Trustee or notice thereof by any one of such parties to the other parties.

Section 9.04 Compensation to the Master Servicer.

The Master Servicer shall be entitled to be paid by the Trust Fund, and either retain or withdraw from the Distribution Account, (i) its Master Servicing Fee with respect to each Distribution Date, (ii) amounts necessary to reimburse itself for any previously unreimbursed Advances, Servicer Advances and Nonrecoverable Advances in accordance with the definition of “Available Distribution Amount” and (iii) amounts representing assumption fees, late payment charges or other ancillary income not included in the definition of “Available Distribution Amount” and which are not required to be remitted by the Servicers to the Securities Administrator or deposited by the Securities Administrator into the Distribution Account. The Master Servicer shall be required to pay all expenses incurred by it in connection with its activities hereunder and shall not be entitled to reimbursement therefor except as provided in this Agreement.

In addition, Depositor agrees, except as otherwise expressly provided herein, to reimburse the Master Servicer, upon its request, for all reasonable expenses, disbursements and advances incurred or made by the Master Servicer in connection with the performance of its duties hereunder (including the reasonable compensation and the expenses and disbursements of its agents and counsel), to the extent not otherwise reimbursed pursuant to this Agreement, except any such expense, disbursement or advance as may be attributable to its willful misfeasance, bad faith or negligence.

Section 9.05 Merger or Consolidation.

Any Person into which the Master Servicer may be merged or consolidated, or any Person resulting from any merger, conversion, other change in form or consolidation to which the Master Servicer shall be a party, or any Person succeeding to the business of the Master Servicer, shall be the successor to the Master Servicer hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that the successor or resulting Person to the Master Servicer or its Affiliate whose primary business is the servicing of conventional residential mortgage loans shall be a Person that shall be qualified and approved to service mortgage loans for Fannie Mae or FHLMC and shall have a net worth of not less than $15,000,000.

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Section 9.06 Resignation of Master Servicer.

Except as otherwise provided in Sections 9.05 and 9.07 hereof, the Master Servicer shall not resign from the obligations and duties hereby imposed on it unless the Master Servicer’s duties hereunder are no longer permissible under applicable law or are in material conflict by reason of applicable law with any other activities carried on by it and cannot be cured. Any such determination permitting the resignation of the Master Servicer shall be evidenced by an Opinion of Counsel that shall be Independent to such effect delivered to the Trustee. No such resignation shall become effective until the Trustee shall have assumed, or a successor master servicer shall have been appointed by the Trustee and until such successor shall have assumed, the Master Servicer’s responsibilities and obligations under this Agreement. Notice of such resignation shall be given promptly by the Master Servicer and the Depositor to the Trustee.

If, at any time, the Master Servicer resigns under this Section 9.06, or transfers or assigns its rights and obligations under Section 9.07, or is removed as Master Servicer pursuant to Section 6.14, then at such time as [               ] also shall resign (and shall be entitled to resign) as Securities Administrator, Paying Agent, Authenticating Agent and Certificate Registrar under this Agreement. In such event, the obligations of each such party shall be assumed by the Trustee or such successor master servicer appointed by the Trustee (subject to the provisions of Section 9.02(a)).

Section 9.07 Assignment or Delegation of Duties by the Master Servicer.

Except as expressly provided herein, the Master Servicer shall not assign or transfer any of its rights, benefits or privileges hereunder to any other Person, or delegate to or subcontract with, or authorize or appoint any other Person to perform any of the duties, covenants or obligations to be performed by the Master Servicer hereunder; provided, however, that the Master Servicer shall have the right with the prior written consent of the Trustee and the Depositor (which consent shall not be unreasonably withheld), and upon delivery to the Trustee and the Depositor of a letter from each Rating Agency to the effect that such action shall not result in a downgrading of the Certificates, to delegate or assign to or subcontract with or authorize or appoint any qualified Person to perform and carry out any duties, covenants or obligations to be performed and carried out by the Master Servicer hereunder. Notice of such permitted assignment shall be given promptly by the Master Servicer to the Depositor and the Trustee. If, pursuant to any provision hereof, the duties of the Master Servicer are transferred to a successor master servicer, the entire amount of the Master Servicing Fees and other compensation payable to the Master Servicer pursuant hereto shall thereafter be payable to such successor master servicer. Such successor master servicer shall also pay the fees of the Trustee and the Securities Administrator, as provided herein.

Section 9.08 Limitation on Liability of the Master Servicer and Others.

Neither the Master Servicer nor any of the directors, officers, employees or agents of the Master Servicer shall be under any liability to the Trustee or the Certificateholders for any action taken or for refraining from the taking of any action in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Master Servicer or any such person against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in its performance of its duties or by reason of reckless disregard for its obligations and duties under this Agreement. The Master Servicer and any director, officer, employee or agent of the Master Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising hereunder. The Master Servicer shall be under no obligation to appear in, prosecute or defend any legal action that is not incidental to its duties to master service the Mortgage Loans in accordance with this Agreement and that in its opinion may involve it in any expenses or liability; provided, however, that the Master Servicer may in its sole discretion undertake any such action that it may deem necessary or desirable in respect to this Agreement and the rights and duties of the parties hereto and the interests of the Certificateholders hereunder. In such event, the legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities of the Trust Fund and the Master Servicer shall be entitled to be reimbursed therefor out of the Distribution Account.

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The Master Servicer shall not be liable for any acts or omissions of any Servicer except to the extent that damages or expenses are incurred as a result of such act or omissions and such damages and expenses would not have been incurred but for the negligence, willful misfeasance, bad faith or recklessness of the Master Servicer in supervising, monitoring and overseeing the obligations of the Servicers in this Agreement.

Section 9.09 Indemnification; Third-Party Claims.

In addition to any indemnity required pursuant to Section 11.16 hereof, the Master Servicer agrees to indemnify the Depositor, the Securities Administrator and the Trustee, and hold them harmless against any and all claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, liability, fees and expenses that the Depositor, the Securities Administrator or the Trustee may sustain as a result of the Master Servicer’s willful misfeasance, bad faith or negligence in the performance of its duties hereunder or by reason of its reckless disregard for its obligations and duties under this Agreement. The Depositor, the Securities Administrator and the Trustee shall immediately notify the Master Servicer if a claim is made by a third party with respect to this Agreement or the Mortgage Loans that such party believes entitles it to indemnification under this Section 9.09, and immediately upon discharge and satisfaction of any such judgment or decree which may be entered against it or them in respect of such claim, the Master Servicer shall indemnify such party for such claim, losses, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, liability, fees and expenses in connection therewith. This indemnification shall survive the termination of this Agreement and the resignation or removal of the Master Servicer.

Section 9.10 Master Servicer Fidelity Bond and Master Servicer Errors and Omissions Insurance Policy.

The Master Servicer, at its expense, shall maintain in effect a blanket fidelity bond and an errors and omissions insurance policy, affording coverage with respect to all directors, officers, employees and other Persons acting on such Master Servicer’s behalf, and covering errors and omissions in the performance of the Master Servicer’s obligations hereunder. The errors and omissions insurance policy and the fidelity bond shall be in such form and amount generally acceptable for entities serving as master servicers or trustees.

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ARTICLE X

REMIC ADMINISTRATION

Section 10.01 REMIC Administration.

(a) REMIC elections as set forth in the Preliminary Statement to this Agreement shall be made on Forms 1066 or other appropriate federal tax or information return for the taxable year ending on the last day of the calendar year in which the Certificates are issued. The regular interests and residual interest in each REMIC shall be as designated in the Preliminary Statement to this Agreement.

(b) The Closing Date is hereby designated as the “Startup Day” of each REMIC within the meaning of section 86OG(a)(9) of the Code. The “latest possible maturity date” for purposes of Treasury Regulation 1.86OG-1(a)(4) will be the Latest Possible Maturity Date.

(c) The Securities Administrator shall represent the Trust Fund in any administrative or judicial proceeding relating to an examination or audit by any governmental taxing authority with respect thereto. The Securities Administrator shall pay any and all tax related expenses (not including taxes) of each REMIC, including but not limited to any professional fees or expenses related to audits or any administrative or judicial proceedings with respect to such REMIC that involve the Internal Revenue Service or state tax authorities, but only to the extent that (i) such expenses are ordinary or routine expenses, including expenses of a routine audit but not expenses of litigation (except as described in (ii)); or (ii) such expenses or liabilities (including taxes and penalties) are attributable to the negligence or willful misconduct of the Securities Administrator in fulfilling its duties hereunder (including its duties as tax return preparer). The Securities Administrator shall be entitled to reimbursement of expenses to the extent provided in clause (i) above from the Distribution Account, provided, however, the Securities Administrator shall not be entitled to reimbursement for expenses incurred in connection with the preparation of tax returns and other reports as required by Section 6.20 and this Section.

(d) The Securities Administrator shall prepare, and the Trustee shall sign and file, as instructed by the Securities Administrator, all of each REMIC’s federal and appropriate state tax and information returns as such REMIC’s direct representative. The expenses of preparing and filing such returns shall be borne by the Securities Administrator. In preparing such returns, the Securities Administrator shall, with respect to each REMIC created hereunder other than the Upper-Tier REMIC (each such REMIC, a “Non-Upper-Tier REMIC”): (i) treat the accrual period for interests in such Non-Upper-Tier REMIC as the calendar month; (ii) account for distributions made from such Non-Upper-Tier REMIC as made on the first day of each succeeding calendar month; (iii) account for income under the all-OID method at the Pool 1 Net WAC, Pool 2 Net WAC, Pool 3 Net WAC, Pool 4 Net WAC or Pool 5 Net WAC, as applicable; (iv) use the aggregation method provided in Treasury Regulation section 1.1275-2(c); and (v) account for income and expenses related to such Non-Upper-Tier REMIC in the manner resulting in the lowest amount of excess inclusion income possible accruing to the Holder of the residual interest in such Non-Upper-Tier REMIC.

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(e) The Securities Administrator or its designee shall perform on behalf of each REMIC all reporting and other tax compliance duties that are the responsibility of such REMIC under the Code, the REMIC Provisions, or other compliance guidance issued by the Internal Revenue Service or any state or local taxing authority. Among its other duties, if required by the Code, the REMIC Provisions, or other such guidance, the Securities Administrator shall provide, upon receipt of additional reasonable compensation, (i) to the Treasury or other governmental authority such information as is necessary for the application of any tax relating to the transfer of a Residual Certificate to any disqualified person or organization pursuant to Treasury Regulation 1.860E-2(a)(5) and any person designated in Section 860E(e)(3) of the Code and (ii) to the Trustee such information as is necessary for the Trustee to provide to the Certificateholders such information or reports as are required by the Code or REMIC Provisions.

(f) The Trustee, the Securities Administrator, the Master Servicer and the Holders of Certificates shall take any action or cause any REMIC to take any action necessary to create or maintain the status of any REMIC as a REMIC under the REMIC Provisions and shall assist each other as necessary to create or maintain such status. Neither the Trustee, the Securities Administrator, the Master Servicer nor the Holder of any Residual Certificate shall knowingly take any action, cause any REMIC to take any action or fail to take (or fail to cause to be taken) any action that, under the REMIC Provisions, if taken or not taken, as the case may be, could result in an Adverse REMIC Event unless the Trustee, the Securities Administrator and the Master Servicer have received an Opinion of Counsel (at the expense of the party seeking to take such action or failing to take such action) to the effect that the contemplated action (or inaction, as the case may be) will not endanger such status or result in the imposition of such a tax. In addition, prior to taking any action with respect to any REMIC or the assets therein, or causing any REMIC to take any action, which is not expressly permitted under the terms of this Agreement, any Holder of a Residual Certificate will consult with the Trustee, the Securities Administrator, the Master Servicer or their respective designees, in writing, with respect to whether such action could cause an Adverse REMIC Event to occur with respect to any REMIC, and no such Person shall take any such action or cause any REMIC to take any such action as to which the Trustee, the Securities Administrator or the Master Servicer has advised it in writing that an Adverse REMIC Event could occur; provided, however, that if no Adverse REMIC Event would occur but such action could result in the imposition of additional taxes on the Residual Certificateholders, no such Person shall take any such action, or cause any REMIC to take any such action without the written consent of the Residual Certificateholders. The Trustee may consult with counsel (and conclusively rely upon the advice of such counsel) to make such written advice, and the cost of the same shall be borne by the party seeking to take the action not expressly permitted by this Agreement, but in no event shall such cost be an expense of the Trustee.

(g) Each Holder of a Residual Certificate shall pay when due any and all taxes imposed on the related REMIC by federal or state governmental authorities. To the extent that such taxes are not paid by a Residual Certificateholder or the Paying Agent shall pay any remaining REMIC taxes out of current or future amounts otherwise distributable to the Holder of the Residual Certificate in any such REMIC or, if no such amounts are available, out of other amounts held in the Distribution Account, and shall reduce amounts otherwise payable to holders of regular interests in any such REMIC, as the case may be.

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(h) The Securities Administrator shall, for federal income tax purposes, maintain books and records with respect to each REMIC on a calendar year and on an accrual basis.

(i) No additional contributions of assets shall be made to any REMIC, except as expressly provided in this Agreement.

(j) Neither the Securities Administrator nor the Master Servicer shall enter into any arrangement by which any REMIC will receive a fee or other compensation for services.

(k) The Trustee and the Securities Administrator shall treat the Reserve Fund as an “outside reserve fund” within the meaning of Treasury Regulation Section 1.860G-2(h) that is owned by the holders of the Interest-Only Certificates and that is not an asset of any REMIC. The Trustee and the Securities Administrator shall treat the rights of the Holders of the LIBOR Certificates to receive distributions from the Reserve Fund to cover Net WAC Shortfalls as payments under an interest rate cap contract written by the Holders of the Class 1-XA Certificates in favor of the Holders of the LIBOR Certificates. Thus, each Class of LIBOR Certificates shall be treated as representing not only ownership of regular interests in a REMIC, but also ownership of an interest in an interest rate cap contract. For purposes of determining the issue prices of the Certificates, the interest rate cap contracts shall be assumed to have a zero value unless and until required otherwise by an applicable taxing authority.

(l) The Holder of the Class LT-R Certificate shall act as “tax matters person” with respect to the Lower-Tier REMIC and shall act as agent for the Holder of the Class 1-AR Certificate as “tax matters person” with respect to the Upper-Tier REMIC and the Middle-Tier REMIC and the Securities Administrator shall act as agent for the Holder of the Class LT-R Certificate in such roles, unless and until another party is so designated by the Holder of the Class LT-R Certificate.

Section 10.02 Prohibited Transactions and Activities.

Neither the Depositor, the Master Servicer nor the Trustee shall sell, dispose of, or substitute for any of the Mortgage Loans, except in a disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the Trust Fund, (iii) the termination of each REMIC pursuant to Article VII of this Agreement, (iv) a substitution pursuant to Article II of this Agreement or (v) a repurchase of Mortgage Loans pursuant to Article II of this Agreement, nor acquire any assets for any REMIC, nor sell or dispose of any investments in the Distribution Account for gain, nor accept any contributions to any REMIC after the Closing Date, unless it has received an Opinion of Counsel (at the expense of the party causing such sale, disposition, or substitution) that such disposition, acquisition, substitution, or acceptance will not result in an Adverse REMIC Event, (b) affect the distribution of interest or principal on the Certificates or (c) result in the encumbrance of the assets transferred or assigned to the Trust Fund (except pursuant to the provisions of this Agreement).

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Section 10.03 Indemnification with Respect to Prohibited Transactions or Loss of REMIC Status.

Upon the occurrence of an Adverse REMIC Event due to the negligent performance by the Securities Administrator of its duties and obligations set forth herein, the Securities Administrator shall indemnify the Certificateholders of the related Residual Certificate against any and all losses, claims, damages, liabilities or expenses (“Losses”) resulting from such negligence; provided, however, that the Securities Administrator shall not be liable for any such Losses attributable to the action or inaction of the Depositor, the Trustee or the Holder of the Residual Certificate, nor for any such Losses resulting from misinformation provided by any of the foregoing parties on which the Securities Administrator has relied. Notwithstanding the foregoing, however, in no event shall the Securities Administrator have any liability (1) for any action or omission that is taken in accordance with and in compliance with the express terms of, or which is expressly permitted by the terms of, this Agreement or under any Servicing Agreement or under any Acknowledgement, (2) for any Losses other than arising out of malfeasance, willful misconduct or negligent performance by the Securities Administrator of its duties and obligations set forth herein, and (3) for any special or consequential damages to Certificateholders of the related Residual Certificate (in addition to payment of principal and interest on the Certificates).

Section 10.04 REO Property.

(a) Notwithstanding any other provision of this Agreement, the Master Servicer, acting on behalf of the Trustee hereunder, shall not, except to the extent provided in the applicable Servicing Agreement, knowingly permit any Servicer to, rent, lease, or otherwise earn income on behalf of any REMIC with respect to any REO Property which might cause an Adverse REMIC Event unless the applicable Servicer has provided to the Trustee and the Securities Administrator an Opinion of Counsel concluding that, under the REMIC Provisions, such action would not adversely affect the status of any REMIC as a REMIC and any income generated for any REMIC by the REO Property would not result in an Adverse REMIC Event.

(b) The Depositor shall cause the applicable Servicer (to the extent provided in its Servicing Agreement) to make reasonable efforts to sell any REO Property for its fair market value. In any event, however, the Depositor shall, or shall cause the applicable Servicer (to the extent provided in its Servicing Agreement) to, dispose of any REO Property within three years of its acquisition by the Trust Fund unless the Depositor or the applicable Servicer (on behalf of the Trust Fund) has received a grant of extension from the Internal Revenue Service to the effect that, under the REMIC Provisions and any relevant proposed legislation and under applicable state law, the REMIC may hold REO Property for a longer period without causing an Adverse REMIC Event. If such an extension has been received, then the Depositor, acting on behalf of the Trustee hereunder, shall, or shall cause the applicable Servicer to, continue to attempt to sell the REO Property for its fair market value for such period longer than three years as such extension permits (the “Extended Period”). If such an extension has not been received and the Depositor or the applicable Servicer, acting on behalf of the Trust Fund hereunder, is unable to sell the REO Property within 33 months after its acquisition by the Trust Fund or if such an extension, has been received and the Depositor or the applicable Servicer is unable to sell the REO Property within the period ending three months before the close of the Extended Period, the Depositor shall cause the applicable Servicer, before the end of the three year period or the Extended Period, as applicable, to (i) purchase such REO Property at a price equal to the REO Property’s fair market value or (ii) auction the REO Property to the highest bidder (which may be the applicable Servicer) in an auction reasonably designed to produce a fair price prior to the expiration of the three-year period or the Extended Period, as the case may be.

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ARTICLE XI

MISCELLANEOUS PROVISIONS

Section 11.01 Binding Nature of Agreement; Assignment.

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

Section 11.02 Entire Agreement.

This Agreement contains the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof.

Section 11.03 Amendment.

(a) This Agreement may be amended from time to time by the Depositor, the Master Servicer, the Securities Administrator, and the Trustee, without notice to or the consent of any of the Holders, (i) to cure any ambiguity or mistake, (ii) to cause the provisions herein to conform to or be consistent with or in furtherance of the statements made with respect to the Certificates, the Trust Fund or this Agreement in the Prospectus, or to correct or supplement any provision herein which may be inconsistent with any other provisions herein or with the provisions of any Servicing Agreement, (iii) to make any other provisions with respect to matters or questions arising under this Agreement or (iv) to add, delete, or amend any provisions to the extent necessary or desirable to comply with any requirements imposed by the Code and the REMIC Provisions. No such amendment effected pursuant to the preceding sentence shall, as evidenced by an Opinion of Counsel, result in an Adverse REMIC Event, nor shall such amendment effected pursuant to clause (iii) of such sentence adversely affect in any material respect the interests of any Holder. Prior to entering into any amendment without the consent of Holders pursuant to this paragraph, the Trustee shall be provided with an Opinion of Counsel (at the expense of the party requesting such amendment) to the effect that such amendment is permitted under this Section. Any such amendment shall be deemed not to adversely affect in any material respect any Holder, if the Trustee and the Securities Administrator receive written confirmation from each Rating Agency that such amendment will not cause such Rating Agency to reduce the then current rating assigned to the Certificates.

(b) This Agreement may also be amended from time to time by the Depositor, the Master Servicer, the Securities Administrator and the Trustee, with the consent of the Holders of not less than 66-2/3% of the Class Principal Amount (or Percentage Interest) of each Class of Certificates affected thereby for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Holders; provided, however, that no such amendment shall be made unless the Trustee and the Securities Administrator receive an Opinion of Counsel, at the expense of the party requesting the change, that such change will not cause an Adverse REMIC Event; and provided further, that no such amendment may (i) reduce in any manner the amount of, or delay the timing of, payments received on Mortgage Loans which are required to be distributed on any Certificate, without the consent of the Holder of such Certificate or (ii) reduce the aforesaid percentages of Class Principal Amount or Class Notional Amount (or Percentage Interest) of Certificates of each Class, the Holders of which are required to consent to any such amendment without the consent of the Holders of 100% of the Class Principal Amount or Class Notional Amount (or Percentage Interest) of each Class of Certificates affected thereby. For purposes of this paragraph, references to “Holder” or “Holders” shall be deemed to include, in the case of any Class of Book-Entry Certificates, the related Certificate Owners.

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(c) Promptly after the execution of any such amendment, the Trustee shall furnish written notification of the substance of such amendment to each Holder, the Depositor and each Rating Agency through the Rule 17g-5 Information Provider. The Securities Administrator and the Certificate Registrar shall cooperate with the Trustee in connection with the Trustee’s obligations under this Section 11.03.

(d) It shall not be necessary for the consent of Holders under this Section 11.03 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such consents and of evidencing the authorization of the execution thereof by Holders shall be subject to such reasonable regulations as the Trustee may prescribe.

(e) Notwithstanding anything to the contrary in any Servicing Agreement, the Trustee shall not consent to any amendment of any Servicing Agreement except pursuant to the standards provided in this Section with respect to amendment of this Agreement. In addition, none of the Trustee, the Master Servicer, the Securities Administrator or the Depositor shall consent to any amendment to any Servicing Agreement unless prior written notice of the substance of such amendment has been delivered to each Rating Agency through the Rule 17g-5 Information Provider.

(f) Prior to the execution of any amendment to this Agreement, each of the Trustee and the Securities Administrator shall be entitled to receive and conclusively rely on an Opinion of Counsel (at the expense of the Person seeking such amendment) stating that the execution of such amendment is authorized and permitted by this Agreement. The Trustee and the Securities Administrator may, but shall not be obligated to, enter into any such amendment which affects the Trustee’s or the Securities Administrator’s own rights, duties or immunities under this Agreement.

Section 11.04 Voting Rights.

Except to the extent that the consent of all affected Certificateholders is required pursuant to this Agreement, with respect to any provision of this Agreement requiring the consent of Certificateholders representing specified percentages of aggregate outstanding Certificate Principal Amount or Class Notional Amount (or Percentage Interest), Certificates owned by the Depositor, the Master Servicer, the Securities Administrator, the Trustee, any Servicer or any Affiliates thereof are not to be counted so long as such Certificates are owned by the Depositor, the Master Servicer, the Securities Administrator, the Trustee, any Servicer or any Affiliate thereof.

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Section 11.05 Provision of Information.

(a) For so long as any of the Certificates of any Series or Class are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, each of the Depositor, the Master Servicer, the Securities Administrator and the Trustee agree to cooperate with each other to provide to any Certificateholders and to any prospective purchaser of Certificates designated by such holder, upon the request of such holder or prospective purchaser, any information required to be provided to such holder or prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4) under the Securities Act. Any reasonable, out-of-pocket expenses incurred by the Trustee, the Master Servicer or the Securities Administrator in providing such information shall be reimbursed by the Depositor.

(b) The Securities Administrator shall provide to any person to whom a Prospectus was delivered, upon the request of such person specifying the document or documents requested, (i) a copy (excluding exhibits) of any report on Form 8-K, Form 10-D or Form 10-K (or other prescribed form) filed with the Securities and Exchange Commission pursuant to Section 6.21 and (ii) a copy of any other document incorporated by reference in the Prospectus. Any reasonable out-of-pocket expenses incurred by the Securities Administrator in providing copies of such documents shall be reimbursed by the Depositor.

(c) On each Distribution Date, the Securities Administrator shall deliver or cause to be delivered by first class mail or make available on its website to the Depositor, Attention: Contract Finance, a copy of the report delivered to Certificateholders pursuant to Section 4.02.

Section 11.06 Governing Law.

THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 11.07 Notices.

All requests, demands, notices, authorizations, directions, consents, waivers and communications hereunder shall be in writing and shall be deemed to have been duly given when received by (a) for posting by the Rule 17g-5 Information Provider: __________@___.com, (b) in the case of the Depositor, Sequoia Residential Funding, Inc., One Belvedere Place, Suite 330, Mill Valley, CA 94941, telecopy number (415) 381-1773, Attention: Sequoia Mortgage Trust 20__-_, or in the case of notification required to be delivered by the Securities Administrator to the Depositor pursuant to Section 6.21, to Sequoia Residential Funding, Inc. via facsimile or via email at such facsimile number or email address furnished separately by the Depositor to the Securities Administrator from time to time, (c) in the case of the Seller, RWT Holdings, Inc., One Belvedere Place, Suite 330, Mill Valley, CA 94941 telecopy number (415) 381-1773, Attention: Sequoia Mortgage Trust 20__-_, (d) in the case of the Master Servicer or the Securities Administrator, [ (or, for overnight deliveries, ), telecopy number ( ) , Attention: Client Manager – Sequoia Mortgage Trust 20__-_], and (e) with respect to the Trustee or the Certificate Registrar, its respective Corporate Trust Office, or as to each party such other address as may hereafter be furnished by such party to the other parties in writing. All demands, notices and communications to a party hereunder shall be in writing and shall be deemed to have been duly given when delivered to such party at the relevant address, facsimile number or electronic mail address set forth above or at such other address, facsimile number or electronic mail address as such party may designate from time to time by written notice in accordance with this Section 11.07.

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Section 11.08 Severability of Provisions.

If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the Certificates or the rights of the Holders thereof.

Section 11.09 Indulgences; No Waivers.

Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

Section 11.10 Headings Not To Affect Interpretation.

The headings contained in this Agreement are for convenience of reference only, and they shall not be used in the interpretation hereof.

Section 11.11 Benefits of Agreement.

Nothing in this Agreement or in the Certificates, express or implied, shall give to any Person, other than the parties to this Agreement and their successors hereunder and the Holders of the Certificates, any benefit or any legal or equitable right, power, remedy or claim under this Agreement, except to the extent specified in Section 11.15.

Section 11.12 Special Notices to the Rating Agencies.

(a) The Depositor shall give prompt notice to each Rating Agency through the Rule 17g-5 Information Provider of the occurrence of any of the following events of which it has notice:

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(i) any amendment to this Agreement pursuant to Section 11.03;

(ii) any assignment by the Master Servicer of its rights hereunder or delegation of its duties hereunder;

(iii) the occurrence of any Event of Default described in Section 6.14;

(iv) any notice of termination given to the Master Servicer pursuant to Section 6.14 and any resignation of the Master Servicer hereunder;

(v) the appointment of any successor to any Master Servicer pursuant to Section 6.14;

(vi) the making of a final payment pursuant to Section 7.02; and

(vii) any termination of the rights and obligations of any Servicer under the applicable Servicing Agreement.

(b) All notices to the Rating Agencies provided for this Section shall be in writing and sent first to the Rule 17g-5 Information Provider and then by first class mail, telecopy or overnight courier, as follows:

If to Moody’s, to:

Moody’s Investors Service
99 Church Street
New York, New York 10007
Attn: Residential Mortgages

If to S&P, to:

Standard & Poor’s Ratings Services,

a division of The McGraw-Hill Companies, Inc.
55 Water Street
New York, New York 10041
Attn: Residential Mortgages

(c) The Securities Administrator shall provide or make available to each Rating Agency through the Information Provider reports prepared pursuant to Section 4.02 and the reports filed on Form 10-K pursuant to Section 6.12(b)(i)(1) through (4). In addition, the Securities Administrator shall, at the expense of the Trust Fund, make available to each Rating Agency through the Rule 17g-5 Information Provider such information as such Rating Agency may reasonably request regarding the Certificates or the Trust Fund, to the extent that such information is reasonably available to the Securities Administrator; provided, the Securities Administrator shall not be required to post to the Rule 17g-5 Website any information previously posted to and available on the Securities Administrator’s website.

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(d) The Depositor hereby represents to S&P that, to the Depositor’s knowledge, the information provided to such Rating Agency, including the loan level detail, is true and correct according to such Rating Agency’s requirements.

Section 11.13 Conflicts.

To the extent that the terms of this Agreement conflict with the terms of any Servicing Agreement, the related Servicing Agreement shall govern.

Section 11.14 Counterparts.

This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same instrument.

Section 11.15 No Petitions.

The Trustee and the Master Servicer, by entering into this Agreement, hereby covenant and agree that they shall not at any time institute against the Depositor, or join in any institution against the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to this Agreement or any of the documents entered into by the Depositor in connection with the transactions contemplated by this Agreement.

Section 11.16 Intention of the Parties and Interpretation; Indemnification.

Each of the parties acknowledges and agrees that the purpose of Sections 6.21, 6.22, 6.23 and 6.24 of this Agreement is to facilitate compliance by the Securities Administrator and the Depositor with the provisions of Regulation AB promulgated by the Commission under the Exchange Act (17 C.F.R. §§ 229.1100 229.1123), as such may be amended from time to time and subject to such clarification and interpretive advice as may be issued by the staff of the Commission from time to time. Therefore, each of the parties agrees that (a) the obligations of the parties hereunder shall be interpreted in such a manner as to accomplish that purpose, (b) the parties’ obligations hereunder will be supplemented and modified as necessary to be consistent with any such amendments, interpretive advice or guidance, convention or consensus among active participants in the asset-backed securities markets, advice of counsel, or otherwise in respect of the requirements of Regulation AB, (c) the parties shall comply with the reasonable requests made by the Securities Administrator or the Depositor for delivery of such additional or different information as the Securities Administrator or the Depositor may determine in good faith is necessary to comply with the provisions of Regulation AB, which information is available to such party without unreasonable effort or expense and within such timeframe as may be reasonably requested, and (d) no amendment of this Agreement shall be required to effect any such changes in the parties’ obligations as are necessary to accommodate evolving interpretations of the provisions of Regulation AB.

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Each of the Depositor, the Master Servicer, each Servicer, the Securities Administrator and any Servicing Function Participant engaged by such party shall indemnify and hold harmless the Securities Administrator, the Master Servicer, the Depositor and the Seller and each of their directors, officers, employees, agents, and affiliates from and against any and all claims, losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs, judgments and other costs and expenses arising out of or based upon (a) any breach by such party of any of its obligations hereunder, including particularly its obligations to provide any Item 1123 Certificate, Assessment of Compliance or Accountant’s Attestation required under Sections 6.22, 6.23 and 6.24, respectively, or any information, data or materials required to be included in any Exchange Act report, (b) any misstatement or omission in any information, data or materials provided by such party, (or in the case of the Securities Administrator or the Master Servicer, any material misstatement or material omission in (i) any Item 1123 Certificate, Assessment of Compliance, Accountant’s Attestation delivered by it or by any Servicing Function Participation engaged by it pursuant to this Agreement or (any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure or Form 8-K Disclosure concerning the Master Servicer or the Securities Administrator), or (c) the negligence, bad faith or willful misconduct of such party in connection with its performance hereunder. If the indemnification provided for herein is unavailable or insufficient to hold harmless the Master Servicer, the Securities Administrator, the Depositor or the Seller, as the case may be, then each such party agrees that it shall contribute to the amount paid or payable by the Securities Administrator, the Master Servicer, the Depositor and the Seller, as applicable, as a result of any claims, losses, damages or liabilities incurred by such party, in such proportion as is appropriate to reflect the relative fault of the indemnified party on the one hand and the indemnifying party on the other. This indemnification shall survive the termination of this Agreement or the termination of any party to this Agreement.

121

IN WITNESS WHEREOF, the parties hereto have caused their names to be signed hereto by their respective officers hereunto duly authorized as of the day and year first above written.

SEQUOIA RESIDENTIAL FUNDING, INC.,

as Depositor

By: _________________________________

Name:
Title:

[                       ],

as Trustee

By: _________________________________

Name:

Title:

[                            ],

as Master Servicer

By: _________________________________

Name:

Title:

[                            ],
as Securities Administrator

By: _________________________________

Name:

Title:

Solely for purposes of Section 2.04, 7.01(b) and 9.01(d)
accepted and agreed to by:

RWT HOLDINGS, INC.

By: ____________________________

[Name]

Authorized Signatory

EXHIBIT A

FORMS OF CERTIFICATES

A-1

EXHIBIT B

FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)

STATE OF                )

                                 )      ss.:

COUNTY OF             )

[NAME OF OFFICER], _________________ being first duly sworn, deposes and says:

1. That he [she] is [title of officer] ________________________ of [name of Purchaser] _________________________________________ (the “Purchaser”), a _______________________ [description of type of entity] duly organized and existing under the laws of the [State of __________] [United States], on behalf of which he [she] makes this affidavit.

2. That the Purchaser’s Taxpayer Identification Number is [           ].

3. That the Purchaser is not a “disqualified organization” within the meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended (the “Code”) and will not be a “disqualified organization” as of [date of transfer], and that the Purchaser is not acquiring a Residual Certificate (as defined in the Agreement) for the account of, or as agent (including a broker, nominee, or other middleman) for, any person or entity from which it has not received an affidavit substantially in the form of this affidavit. For these purposes, a “disqualified organization” means the United States, any state or political subdivision thereof, any foreign government, any international organization, any agency or instrumentality of any of the foregoing (other than an instrumentality if all of its activities are subject to tax and a majority of its board of directors is not selected by such governmental entity), any cooperative organization furnishing electric energy or providing telephone service to persons in rural areas as described in Code Section 1381(a)(2)(C), any “electing large partnership” within the meaning of Section 775 of the Code, or any organization (other than a farmers’ cooperative described in Code Section 521) that is exempt from federal income tax unless such organization is subject to the tax on unrelated business income imposed by Code Section 511.

4. That the Purchaser either (x) is not, and on __________________ [date of transfer] will not be, an employee benefit plan or other retirement arrangement subject to Section 406 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or Section 4975 of the Code (“Code”), (collectively, a “Plan”) or a person acting on behalf of any such Plan or investing the assets of any such Plan to acquire a Residual Certificate; (y) if the Residual Certificate has been subject to an ERISA-Qualifying Underwriting, is an insurance company that is purchasing the Certificate with funds contained in an “insurance company general account” as defined in Section V(e) of Prohibited Transaction Class Exemption (“PTCE”) 95-60 and the purchase and holding of the Certificate are covered under Sections I and III of PTCE 95-60; or (z) herewith delivers to the Certificate Registrar an opinion of counsel (a “Benefit Plan Opinion”) satisfactory to the Certificate Registrar, and upon which the Certificate Registrar, the Trustee, the Master Servicer, the Depositor and Securities Administrator shall be entitled to rely, to the effect that the purchase or holding of such Residual Certificate by the Investor will not result in any non-exempt prohibited transactions under Title I of ERISA or Section 4975 of the Code and will not subject the Certificate Registrar, the Trustee, the Depositor, the Master Servicer or the Securities Administrator to any obligation in addition to those undertaken by such entities in the Agreement, which opinion of counsel shall not be an expense of the Trust Fund or any of the above parties.

B-1

5. That the Purchaser hereby acknowledges that under the terms of the Pooling and Servicing Agreement, dated as of ____________ __, 20__ (the “Agreement”), by and among Sequoia Residential Funding, Inc., as Depositor, [                  ], as Master Servicer and as Securities Administrator, and [                  ], as Trustee with respect to Sequoia Mortgage Trust 20__-_ Mortgage Pass-Through Certificates, no transfer of the Residual Certificates shall be permitted to be made to any person unless the Certificate Registrar has received a certificate from such transferee containing the representations in paragraphs 3 and 4 hereof.

6. That the Purchaser does not hold REMIC residual securities as nominee to facilitate the clearance and settlement of such securities through electronic book-entry changes in accounts of participating organizations (such entity, a “Book-Entry Nominee”).

7. That the Purchaser does not have the intention to impede the assessment or collection of any federal, state or local taxes legally required to be paid with respect to such Residual Certificate.

8. That the Purchaser will not transfer a Residual Certificate to any person or entity (i) as to which the Purchaser has actual knowledge that the requirements set forth in paragraph 3, paragraph 6 or paragraph 10 hereof are not satisfied or that the Purchaser has reason to believe does not satisfy the requirements set forth in paragraph 7 hereof, and (ii) without obtaining from the prospective Purchaser an affidavit substantially in this form and providing to the Certificate Registrar a written statement substantially in the form of Exhibit C to the Agreement.

9. That the Purchaser understands that, as the holder of a Residual Certificate, the Purchaser may incur tax liabilities in excess of any cash flows generated by the interest and that the Purchaser has and expects to have sufficient net worth and/or liquidity to pay in full any tax liabilities attributable to ownership of a Residual Certificate and intends to pay taxes associated with holding such Residual Certificate as they become due.

B-2

10. That the Purchaser (i) is not a Non-U.S. Person or (ii) is a Non-U.S. Person that holds a Residual Certificate in connection with the conduct of a trade or business within the United States and has furnished the transferor and the Certificate Registrar with an effective Internal Revenue Service 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) or successor form at the time and in the manner required by the Code or (iii) is a Non-U.S. Person that has delivered to the transferor and the Certificate Registrar an opinion of a nationally recognized tax counsel to the effect that the transfer of such Residual Certificate to it is in accordance with the requirements of the Code and the regulations promulgated thereunder and that such transfer of a Residual Certificate will not be disregarded for federal income tax purposes. “Non-U.S. Person” means an individual, corporation, partnership or other person other than (i) a citizen or resident of the United States; (ii) a corporation, partnership or other entity created or organized in or under the laws of the United States or any state thereof, including for this purpose, the District of Columbia; (iii) an estate that is subject to U.S. federal income tax regardless of the source of its income; (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 trustees have authority to control all substantial decisions of the trust; and, (v) to the extent provided in Treasury regulations, certain trusts in existence on August 20, 1996 that are treated as United States persons prior to such date and elect to continue to be treated as United States persons.

11. The Purchaser will not cause income from the Residual Certificate to be attributable to a foreign permanent establishment or fixed base of the Purchaser or another U.S. taxpayer.

12. That the Purchaser agrees to such amendments of the Agreement as may be required to further effectuate the restrictions on transfer of any Residual Certificate to such a “disqualified organization,” an agent thereof, a Book-Entry Nominee, or a person that does not satisfy the requirements of paragraph 7 and paragraph 10 hereof.

13. That the Purchaser consents to the designation of the Securities Administrator to act as agent for the “tax matters person” of each REMIC created by the Trust Fund pursuant to the Agreement.

B-3

IN WITNESS WHEREOF, the Purchaser has caused this instrument to be executed on its behalf, pursuant to authority of its Board of Directors, by its [title of officer] this _____ day of __________ 20__.

_________________________________

[name of Purchaser]

By:______________________________

Name:

Title:

Personally appeared before me the above-named [name of officer] ________________, known or proved to me to be the same person who executed the foregoing instrument and to be the [title of officer] _________________ of the Purchaser, and acknowledged to me that he [she] executed the same as his [her] free act and deed and the free act and deed of the Purchaser.

Subscribed and sworn before me this _____ day of __________ 20__.

NOTARY PUBLIC

______________________________

COUNTY OF_____________________

STATE OF______________________

My commission expires the _____ day of __________ 20__.

B-4

EXHIBIT C

RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)

____________________________

Date

Re: Sequoia Mortgage Trust 20__-_
Mortgage Pass-Through Certificates

_______________________ (the “Transferor”) has reviewed the attached affidavit of _____________________________ (the “Transferee”), and has no actual knowledge that such affidavit is not true and has no reason to believe that the information contained in paragraph 7 thereof is not true, and has no reason to believe that the Transferee has the intention to impede the assessment or collection of any federal, state or local taxes legally required to be paid with respect to a Residual Certificate. In addition, the Transferor has conducted a reasonable investigation at the time of the transfer and found that the Transferee had historically paid its debts as they came due and found no significant evidence to indicate that the Transferee will not continue to pay its debts as they become due.

Very truly yours,

_______________________________

Name:

Title:

C-1

EXHIBIT D

FORM OF CUSTODIAL AGREEMENT

D-1

EXHIBIT E-1

FORM OF RULE 144A TRANSFER CERTIFICATE

Re: Sequoia Mortgage Trust 20__-_
Mortgage Pass-Through Certificates

Reference is hereby made to the Pooling and Servicing Agreement, dated as of ____________ __, 20__ (the “Pooling and Servicing Agreement”), by and among Sequoia Residential Funding, Inc., as Depositor, [                    ], as Master Servicer and as Securities Administrator, and [                       ], as Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Pooling and Servicing Agreement.

This letter relates to $__________ initial Certificate Principal Amount of Class _____ Certificates which are held in the form of Definitive Certificates registered in the name of ______________ (the “Transferor”). The Transferor has requested a transfer of such Definitive Certificates for Definitive Certificates of such Class registered in the name of [insert name of transferee].

In connection with such request, and in respect of such Certificates, the Transferor hereby certifies that such Certificates are being transferred in accordance with (i) the transfer restrictions set forth in the Pooling and Servicing Agreement and the Certificates and (ii) Rule 144A under the Securities Act to a purchaser that the Transferor reasonably believes is a “qualified institutional buyer” within the meaning of Rule 144A purchasing for its own account or for the account of a “qualified institutional buyer,” which purchaser is aware that the sale to it is being made in reliance upon Rule 144A, in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other applicable jurisdiction.

This certificate and the statements contained herein are made for your benefit and the benefit of the Underwriter(s) and the Depositor.

_____________________________________

[Name of Transferor]

By:__________________________________

Name:

Title:

Dated: ___________, ____

H-1

EXHIBIT E-2

FORM OF PURCHASER’S LETTER FOR

INSTITUTIONAL ACCREDITED INVESTOR

Date

Dear Sirs:

In connection with our proposed purchase of $______________ principal amount of Sequoia Mortgage Trust 20__-_ Mortgage Pass-Through Certificates (the “Privately Offered Certificates”) of Sequoia Residential Funding, Inc. (the “Depositor”), we confirm that:

(1) We understand that the Privately Offered Certificates have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell any Privately Offered Certificates within two years of the later of the date of original issuance of the Privately Offered Certificates or the last day on which such Privately Offered Certificates are owned by the Depositor or any affiliate of the Depositor we will do so only (A) to the Depositor, (B) to “qualified institutional buyers” (within the meaning of Rule 144A under the Securities Act) in accordance with Rule 144A under the Securities Act (“QIBs”), (C) pursuant to the exemption from registration provided by Rule 144 under the Securities Act, or (D) to an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act that is not a QIB (an “Institutional Accredited Investor”) which, prior to such transfer, delivers to the Certificate Registrar under the Pooling and Servicing Agreement, dated as of ____________ __, 20__ (the “Agreement”), by and among Sequoia Residential Funding, Inc., as Depositor, [                         ], as Master Servicer and as Securities Administrator, and [                  ], as Trustee, a signed letter in the form of this letter; and we further agree, in the capacities stated above, to provide to any person purchasing any of the Privately Offered Certificates from us a notice advising such purchaser that resales of the Privately Offered Certificates are restricted as stated herein.

(2) We understand that, in connection with any proposed resale of any Privately Offered Certificates to an Institutional Accredited Investor, we will be required to furnish to the Certificate Registrar a certification from such transferee in the form hereof to confirm that the proposed sale is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. We further understand that the Privately Offered Certificates purchased by us will bear a legend to the foregoing effect.

I-1

(3) We are acquiring the Privately Offered Certificates for investment purposes and not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Privately Offered Certificates, and we and any account for which we are acting are each able to bear the economic risk of such investment.

(4) We are an Institutional Accredited Investor and we are acquiring the Privately Offered Certificates purchased by us for our own account or for one or more accounts (each of which is an Institutional Accredited Investor) as to each of which we exercise sole investment discretion.

(5) We have received such information as we deem necessary in order to make our investment decision.

(6) If we are acquiring ERISA-Restricted Certificates, we understand that in accordance with ERISA, the Code and the Exemption, no Plan and no person acting on behalf of such a Plan may acquire such Certificate except in accordance with Section 3.03(e) of the Agreement.

Terms used in this letter which are not otherwise defined herein have the respective meanings assigned thereto in the Agreement.

I-2

You are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

Very truly yours,

__________________________________

[Purchaser]

By: ________________________________

Name:

Title:

I-3

EXHIBIT G

FORM OF ERISA TRANSFER AFFIDAVIT

STATE OF NEW YORK         )

                                                    )        ss.:

COUNTY OF NEW YORK     )

The undersigned, being first duly sworn, deposes and says as follows:

1. The undersigned is the ______________________ of ______________ (the “Investor”), a [corporation duly organized] and existing under the laws of __________, on behalf of which he makes this affidavit.

2. The Investor either (x) is not, and on ___________ [date of transfer] will not be, an employee benefit plan or other retirement arrangement subject to Section 406 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), (collectively, a “Plan”) or a person acting on behalf of any such Plan or investing the assets of any such Plan; (y) if the Certificate has been the subject of an ERISA-Qualifying Underwriting, is an insurance company that is purchasing the Certificate with funds contained in an “insurance company general account” as defined in Section V(e) of Prohibited Transaction Class Exemption (“PTCE”) 95-60 and the purchase and holding of the Certificate are covered under Sections I and III of PTCE 95-60; or (z) herewith delivers to the Certificate Registrar an opinion of counsel (a “Benefit Plan Opinion”) satisfactory to the Certificate Registrar, and upon which the Certificate Registrar, the Trustee, the Master Servicer, the Depositor and the Securities Administrator shall be entitled to rely, to the effect that the purchase or holding of such Certificate by the Investor will not constitute or result in any non-exempt prohibited transactions under Title I of ERISA or Section 4975 of the Code and will not subject the Certificate Registrar, the Trustee, the Master Servicer, the Depositor or the Securities Administrator to any obligation in addition to those undertaken by such entities in the Pooling and Servicing Agreement, dated as of ____________ __, 20__ (the “Agreement”), by and among Sequoia Residential Funding, Inc., as Depositor, [                       ], as Master Servicer and as Securities Administrator, and [                     ], as Trustee, by which opinion of counsel shall not be an expense of the Trust Fund or the above parties.

3. In the case of an ERISA-Restricted Purchase Option Certificate, either (i) the Investor is neither a Plan nor a person acting on behalf of any such Plan or using the assets of any such Plan to effect such transfer or (ii) the acquisition and holding of the ERISA-Restricted Purchase Option Certificate are eligible for exemptive relief under the statutory exemption for nonfiduciary service providers under Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code, PTCE 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60 or PTCE 96-23 or some other applicable exemption.

J-1

4. The Investor hereby acknowledges that under the terms of the Agreement, no transfer of the ERISA-Restricted Certificates shall be permitted to be made to any person unless the Certificate Registrar has received a certificate from such transferee in the form hereof.
IN WITNESS WHEREOF, the Investor has caused this instrument to be executed on its behalf, pursuant to proper authority, by its duly authorized officer, duly attested, this ____ day of _______________ 20___.

J-2

_________________________________

[Investor]

By:______________________________

Name:

Title:

ATTEST:

_____________________________

STATE OF                    )

                                        )       ss.:

COUNTY OF                 )

Personally appeared before me the above-named ________________, known or proved to me to be the same person who executed the foregoing instrument and to be the ____________________ of the Investor, and acknowledged that he executed the same as his free act and deed and the free act and deed of the Investor.

Subscribed and sworn before me this _____ day of _________ 20___.

______________________________

NOTARY PUBLIC

My commission expires the

_____ day of __________ 20___.

J-3

EXHIBIT H-1

LIST OF PURCHASE AGREEMENTS

1.

E-1

EXHIBIT H-2

LIST OF SERVICING AGREEMENTS

2.

E-1

[[EXHIBIT G

LIST OF LIMITED PURPOSE SURETY BONDS]]

K-1

EXHIBIT I

ADDITIONAL DISCLOSURE NOTIFICATION

Additional Disclosure Notification

[                            ]

Fax: (     )
Email:

Attn: Corporate Trust Services- Sequoia Mortgage Trust 20__-_, Mortgage Pass-Through Certificates, Series 20__-_—SEC REPORT PROCESSING

RE: **Additional Form [10-D][10-K][8-K] Disclosure** Required

Ladies and Gentlemen:

In accordance with Section 6.21[(a)][(b)][(c)] of the Pooling and Servicing Agreement, Pooling and Servicing Agreement, dated as of ____________ __, 20__ (the “Agreement”), by and among Sequoia Residential Funding, Inc., as Depositor, [                   ], as Master Servicer and as Securities Administrator, and [            ], as Trustee with respect to Sequoia Mortgage Trust 20__-_ Mortgage Pass-Through Certificate, the undersigned, as [          ], hereby notifies you that certain events have come to our attention that [will] [may] need to be disclosed on Form [10-D][10-K][8-K].

Description of Additional Form [10-D][10-K][8-K] Disclosure:

List of any Attachments hereto to be included in the Additional Form [10-D][10-K][8-K] Disclosure:

Any inquiries related to this notification should be directed to [                       ], phone number: [         ]; email address: [                   ].

[NAME OF PARTY],

as [role]

By:    _________________________

Name:
Title:

L-1

EXHIBIT J

[[BACK-UP CERTIFICATE TO FORM 10-K CERTIFICATE]]

Sequoia Mortgage Trust 20__-_ (the “Trust”)

Mortgage Pass-Through Certificates

Re: The Pooling and Servicing Agreement, dated as of ____________ __, 20__ (the “Agreement”), by and among Sequoia Residential Funding, Inc., as Depositor, [                  ], as Master Servicer and as Securities Administrator, and [                           ], as Trustee with respect to Sequoia Mortgage Trust 20__-_ Mortgage Pass-Through Certificate. I, ________________________________, the _______________________ of [NAME OF COMPANY] (the “Company”), certify to the Depositor and its officers, directors and affiliates, with the knowledge and intent that they will rely upon this certification, that:

I, __________________________, the _________________________ of [NAME OF COMPANY] (the “Company”) certify to the Depositor and its officers, directors and affiliates, and with the knowledge and intent that they will rely upon this certification, that:

(1) I have reviewed the annual report on Form 10-K for the fiscal year [____] (the “Annual Report”), and all reports on Form 10-D required to be filed in respect of period covered by the Annual Report (collectively with the Annual Report, the “Reports”), of the Trust Fund;

(2) To my knowledge, (a) the Reports, taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the Annual Report, and (b) the Company’s assessment of compliance and related attestation report referred to below, taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by such assessment of compliance and attestation report;

(3) To my knowledge, the distribution information required to be provided by the Company under the Pooling and Servicing Agreement has been provided to the Securities Administrator for inclusion in the Reports is included in the Reports;

(4) I am responsible for reviewing the activities performed by the Company under the Pooling and Servicing Agreement, and based on my knowledge and the compliance review conducted in preparing the assessment of compliance of the Company required by the Pooling and Servicing Agreement, and except as disclosed in the Reports, the Company has fulfilled its obligations under the Pooling and Servicing Agreement in all material respects; and

(5) The report on assessment of compliance with servicing criteria applicable to the Company for asset-backed securities of the Company and each Subcontractor utilized by the Company and the related attestation report on assessment of compliance with servicing criteria applicable to it required to be included in the Annual Report in accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to the Annual Report. Any material instances of non-compliance are described in such report and have been disclosed in the Annual Report.

M-1

In giving the certifications above, the Company has reasonably relied on information provided to it by the following unaffiliated parties: [names of servicer(s), subservicer(s), custodian(s)]

By: ________________________________
Name:
Title

Date:

M-2

EXHIBIT K

SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE

The Assessment of Compliance to be delivered by the parties listed in the table below shall address, at a minimum, the criteria identified below as “Applicable Servicing Criteria” for each such party:

Regulation AB Reference
Servicing Criteria
Master Servicer Securities Admini-
strator

Servicers

Custodian

General Servicing Considerations

1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.	X	X	X
1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.	X		X
1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for the pool assets are maintained.	N/A	N/A	N/A
1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.	X		X
	Cash Collection and Administration
1122(d)(2)(i)	Payments on pool assets are deposited into the appropriate bank collection accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements.	X	X	X
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	X	X	X
1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.	X		X
1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of over collateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.	X	X	X
1122(d)(2)(v)	Each collection account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.	X	X	X
1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.			X
1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including collection accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.	X	X	X

N-1

	Investor Remittances and Reporting
1122(d)(3)(i)	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of pool assets serviced by the Servicer.	X	X	X
1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	X	X	X
1122(d)(3)(iii)	Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.	X	X	X
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	X	X	X
	Pool Asset Administration
1122(d)(4)(i)	Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents.			X	X
1122(d)(4)(ii)	Pool assets  and related documents are safeguarded as required by the transaction agreements			X	X
1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.			X
1122(d)(4)(iv)	Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents.			X
1122(d)(4)(v)	The Servicer’s records regarding the pool assets agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.			X
1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor's pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.			X
1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.			X
1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period a pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).			X

N-2

1122(d)(4)(ix)	Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents.			X
1122(d)(4)(x)	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related pool assets, or such other number of days specified in the transaction agreements.			X
1122(d)(4)(xi)	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.			X
1122(d)(4)(xii)	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the Servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.			X
1122(d)(4)(xiii)	Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements.			X
1122(d)(4)(xiv)	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.	X		X
1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.	N/A	N/A	N/A	N/A

[NAME OF PARTY]

Date: _________________________

By:
Name: ________________________________
Title: ________________________________

N-3

EXHIBIT L

ADDITIONAL FORM 10-D DISCLOSURE

ADDITIONAL FORM 10-D DISCLOSURE
Item on Form 10-D	Party Responsible
Item 1: Distribution and Pool Performance Information
Information included in the [Distribution Date Statement]	Master Servicer Securities Administrator
Any information required by 1121 which is NOT included on the [Distribution Date Statement]	Depositor
Item 2: Legal Proceedings Any legal proceeding pending against the following entities or their respective property, that is material to Certificateholders, including any proceedings known to be contemplated by governmental authorities:
▪ Issuing Entity (Trust Fund)	Trustee, Master Servicer, Securities Administrator and Depositor
▪ Sponsor (Seller)	Seller (if a party to the Pooling and Servicing Agreement) or Depositor
▪ Depositor	Depositor
▪ Trustee	Trustee
▪ Securities Administrator	Securities Administrator
▪ Master Servicer	Master Servicer
▪ Custodian	Custodian
▪ 1110(b) Originator	Depositor
▪ Any 1108(a)(2) Servicer (other than the Master Servicer or Securities Administrator)	Servicer (as to itself)
▪ Any other party contemplated by 1100(d)(1)	Depositor
Item 3: Sale of Securities and Use of Proceeds Information from Item 2(a) of Part II of Form 10-Q: With respect to any sale of securities by the sponsor, depositor or issuing entity, that are backed by the same asset pool or are otherwise issued by the issuing entity, whether or not registered, provide the sales and use of proceeds information in Item 701 of Regulation S-K. Pricing information can be omitted if securities were not registered.	Depositor

O-1

ADDITIONAL FORM 10-D DISCLOSURE
Item on Form 10-D	Party Responsible

Item 4: Defaults Upon Senior Securities Information from Item 3 of Part II of Form 10-Q: Report the occurrence of any Event of Default (after expiration of any grace period and provision of any required notice)	Securities Administrator Trustee
Item 5: Submission of Matters to a Vote of Security Holders Information from Item 4 of Part II of Form 10-Q	Securities Administrator Trustee
Item 6: Significant Obligors of Pool Assets Item 1112(b) – Significant Obligor Financial Information*	Depositor
*This information need only be reported on the Form 10-D for the distribution period in which updated information is required pursuant to the Item.
Item 7: Significant Enhancement Provider Information Item 1114(b)(2) – Credit Enhancement Provider Financial Information*
▪ Determining applicable disclosure threshold	Depositor
▪ Requesting required financial information (including any required accountants’ consent to the use thereof) or effecting incorporation by reference	Depositor
Item 1115(b) – Derivative Counterparty Financial Information*
▪ Determining current maximum probable exposure	Depositor
▪ Determining current significance percentage	Depositor
▪ Requesting required financial information (including any required accountants’ consent to the use thereof) or effecting incorporation by reference	Depositor

O-2

ADDITIONAL FORM 10-D DISCLOSURE
Item on Form 10-D	Party Responsible

*This information need only be reported on the Form 10-D for the distribution period in which updated information is required pursuant to the Items.
Item 8: Other Information Disclose any information required to be reported on Form 8-K during the period covered by the Form 10-D but not reported	Any party responsible for the applicable Form 8-K Disclosure item
Item 9:  Exhibits
Distribution Date Statement to Certificateholders	Securities Administrator
Exhibits required by Item 601 of Regulation S-K, such as material agreements	Depositor

O-3

EXHIBIT M

ADDITIONAL FORM 10-K DISCLOSURE

ADDITIONAL FORM 10-K DISCLOSURE
Item on Form 10-K	Party Responsible
Item 1B: Unresolved Staff Comments	Depositor
Item 9B: Other Information Disclose any information required to be reported on Form 8-K during the fourth quarter covered by the Form 10-K but not reported	Any party responsible for disclosure items on Form 8-K
Item 15:  Exhibits, Financial Statement Schedules	Securities Administrator Depositor
Reg AB Item 1112(b):  Significant Obligors of Pool Assets
Significant Obligor Financial Information*	Depositor
*This information need only be reported on the Form 10-D for the distribution period in which updated information is required pursuant to the Item.
Reg AB Item 1114(b)(2):  Credit Enhancement Provider Financial Information
▪ Determining applicable disclosure threshold	Depositor
▪ Requesting required financial information (including any required accountants’ consent to the use thereof) or effecting incorporation by reference	Depositor
*This information need only be reported on the Form 10-D for the distribution period in which updated information is required pursuant to the Items.
Reg AB Item 1115(b):  Derivative Counterparty Financial Information
▪ Determining current maximum probable exposure	Depositor
▪ Determining current significance percentage	Depositor
▪ Requesting required financial information (including any required accountants’ consent to the use thereof) or effecting incorporation by reference	Depositor
*This information need only be reported on the Form 10-D for the distribution period in which updated information is required pursuant to the Items.

P-1

ADDITIONAL FORM 10-K DISCLOSURE
Item on Form 10-K	Party Responsible

Reg AB Item 1117: Legal Proceedings Any legal proceeding pending against the following entities or their respective property, that is material to Certificateholders, including any proceedings known to be contemplated by governmental authorities:
▪ Issuing Entity (Trust Fund)	Trustee, Master Servicer, Securities Administrator and Depositor
▪ Sponsor (Seller)	Seller (if a party to the Pooling and Servicing Agreement) or Depositor
▪ Depositor	Depositor
▪ Trustee	Trustee
▪ Securities Administrator	Securities Administrator
▪ Master Servicer	Master Servicer
▪ Custodian	Custodian
▪ 1110(b) Originator	Depositor
▪ Any 1108(a)(2) Servicer (other than the Master Servicer or Securities Administrator)	Servicer (as to itself)
▪ Any other party contemplated by 1100(d)(1)	Depositor
Reg AB Item 1119:  Affiliations and Relationships
Whether (a) the Sponsor (Seller), Depositor or Issuing Entity is an affiliate of the following parties, and (b) to the extent known and material, any of the following parties are affiliated with one another:	Depositor as to (a) Sponsor/Seller as to (b)
▪ Master Servicer	Master Servicer
▪ Securities Administrator	Securities Administrator
▪ Trustee	Depositor as to (a) Trustee as to (b)
▪ Any other 1108(a)(3) servicer	Servicer (as to itself)
▪ Any 1110 Originator	Depositor/Sponsor
▪ Any 1112(b) Significant Obligor	Depositor/Sponsor
▪ Any 1114 Credit Enhancement Provider	Depositor/Sponsor
▪ Any 1115 Derivative Counterparty Provider	Depositor/Sponsor
▪ Any other 1101(d)(1) material party	Depositor/Sponsor
Whether there are any “outside the ordinary course business arrangements” other than would be obtained in an arm’s length transaction between (a) the Sponsor (Seller), Depositor or Issuing Entity on the one hand, and (b) any of the following parties (or their affiliates) on the other hand, that exist currently or within the past two years and that are material to a Certificateholder’s understanding of the Certificates:	Depositor as to (a) Sponsor/Seller as to (b)

P-2

ADDITIONAL FORM 10-K DISCLOSURE
Item on Form 10-K	Party Responsible

▪ Master Servicer	Master Servicer
▪ Securities Administrator	Securities Administrator
▪ Trustee	Depositor/Sponsor
▪ Any other 1108(a)(3) servicer	Servicer (as to itself)
▪ Any 1110 Originator	Depositor/Sponsor
▪ Any 1112(b) Significant Obligor	Depositor/Sponsor
▪ Any 1114 Credit Enhancement Provider	Depositor/Sponsor
▪ Any 1115 Derivative Counterparty Provider	Depositor/Sponsor
▪ Any other 1101(d)(1) material party	Depositor/Sponsor
Whether there are any specific relationships involving the transaction or the pool assets between (a) the Sponsor (Seller), Depositor or Issuing Entity on the one hand, and (b) any of the following parties (or their affiliates) on the other hand, that exist currently or within the past two years and that are material:	Depositor as to (a) Sponsor/Seller as to (b)
▪ Master Servicer	Master Servicer
▪ Securities Administrator	Securities Administrator
▪ Trustee	Depositor/Sponsor
▪ Any other 1108(a)(3) servicer	Servicer (as to itself)
▪ Any 1110 Originator	Depositor/Sponsor
▪ Any 1112(b) Significant Obligor	Depositor/Sponsor
▪ Any 1114 Credit Enhancement Provider	Depositor/Sponsor
▪ Any 1115 Derivative Counterparty Provider	Depositor/Sponsor
▪ Any other 1101(d)(1) material party	Depositor/Sponsor

P-3

EXHIBIT N

ADDITIONAL FORM 8-K DISCLOSURE

FORM 8-K DISCLOSURE INFORMATION
Item on Form 8-K	Party Responsible
Item 1.01- Entry into a Material Definitive Agreement Disclosure is required regarding entry into or amendment of any definitive agreement that is material to the securitization, even if depositor is not a party. Examples: servicing agreement, custodial agreement. Note: disclosure not required as to definitive agreements that are fully disclosed in the prospectus	All parties (as to themselves)
Item 1.02- Termination of a Material Definitive Agreement Disclosure is required regarding termination of any definitive agreement that is material to the securitization (other than expiration in accordance with its terms), even if depositor is not a party. Examples: servicing agreement, custodial agreement.	All parties (as to themselves)
Item 1.03- Bankruptcy or Receivership Disclosure is required regarding the bankruptcy or receivership, with respect to any of the following:	Depositor
▪ Sponsor (Seller)	Depositor/Sponsor (Seller)
▪ Depositor	Depositor
▪ Master Servicer	Master Servicer
▪ Affiliated Servicer	Servicer (as to itself)
▪ Other Servicer servicing 20% or more of the pool assets at the time of the report	Servicer (as to itself)
▪ Other material servicers	Servicer (as to itself)
▪ Trustee	Trustee
▪ Securities Administrator	Securities Administrator
▪ Significant Obligor	Depositor

Q-1

FORM 8-K DISCLOSURE INFORMATION
Item on Form 8-K	Party Responsible

▪ Credit Enhancer (10% or more)	Depositor
▪ Derivative Counterparty	Depositor
▪ Custodian	Custodian
Item 2.04- Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement Includes an early amortization, performance trigger or other event, including event of default, that would materially alter the payment priority/distribution of cash flows/amortization schedule. Disclosure will be made of events other than waterfall triggers which are disclosed in the Distribution Date Statements to the certificateholders.	Depositor Master Servicer Securities Administrator
Item 3.03- Material Modification to Rights of Security Holders Disclosure is required of any material modification to documents defining the rights of Certificateholders, including the Pooling and Servicing Agreement.	Securities Administrator Depositor
Item 5.03- Amendments of Articles of Incorporation or Bylaws; Change of Fiscal Year Disclosure is required of any amendment “to the governing documents of the issuing entity”.	Depositor
Item 6.01- ABS Informational and Computational Material	Depositor
Item 6.02- Change of Servicer or Securities Administrator Requires disclosure of any removal, replacement, substitution or addition of any master servicer, affiliated servicer, other servicer servicing 10% or more of pool assets at time of report, other material servicers or trustee.	Master Servicer/Securities Administrator/Depositor/ Servicer (as to itself)/Trustee
Reg AB disclosure about any new servicer or master servicer is also required.	Servicer (as to itself)/Master Servicer/Depositor
Reg AB disclosure about any new Trustee is also required.	Depositor/Securities Administrator
Item 6.03- Change in Credit Enhancement or External Support Covers termination of any enhancement in manner other than by its terms, the addition of an enhancement, or a material change in the enhancement provided. Applies to external credit enhancements as well as derivatives.	Depositor/Securities Administrator

Q-2

FORM 8-K DISCLOSURE INFORMATION
Item on Form 8-K	Party Responsible

Reg AB disclosure about any new enhancement provider is also required.	Depositor
Item 6.04- Failure to Make a Required Distribution	Trustee/Securities Administrator
Item 6.05- Securities Act Updating Disclosure If any material pool characteristic differs by 5% or more at the time of issuance of the securities from the description in the final prospectus, provide updated Reg AB disclosure about the actual asset pool.	Depositor
If there are any new servicers or originators required to be disclosed under Regulation AB as a result of the foregoing, provide the information called for in Items 1108 and 1110 respectively.	Depositor
Item 7.01- Reg FD Disclosure	All parties (as to themselves)
Item 8.01- Other Events Any event, with respect to which information is not otherwise called for in Form 8-K, that the registrant deems of importance to certificateholders.	Depositor
Item 9.01- Financial Statements and Exhibits	Responsible party for reporting/disclosing the financial statement or exhibit

Q-3

[                        ],
as [Securities Administrator] [Master Servicer]

By:_____________________________________
Name:

Title:

EXHIBIT O

FORM OF CERTIFICATION FOR NRSROs AND DEPOSITOR

[Date]

[Master Servicer

Address]

Attention: RMBS – SEMT 201__-__

Attention: Sequoia Mortgage Trust 201__-__,

Mortgage Pass-Through Certificates, Series 201__-__

In accordance with the requirements for obtaining certain information pursuant to the Pooling and Servicing Agreement, dated as of [__________ __, 201__] (the “Pooling and Servicing Agreement”), by and among Sequoia Residential Funding, Inc., as Depositor, Wells Fargo Bank, N.A., as Master Servicer and Securities Administrator, and U.S. Bank National Association, as Trustee with respect to the above-referenced certificates (the “Certificates”), the undersigned hereby certifies and agrees as follows:

With respect to any Nationally Recognized Statistical Rating Organization (“NRSRO”):

1. The undersigned, an NRSRO, has provided the Depositor with the appropriate certifications under Exchange Act Rule 17g-5(e).

2. The undersigned has access to the Depositor's 17g-5 website, and any confidentiality agreement applicable to the undersigned with respect to information obtained from the Depositor's 17g-5 website shall also be applicable to information obtained from the Rule 17g-5 Website.

3. The undersigned shall be deemed to have recertified to the provisions herein each time it accesses any information on the Rule 17g-5 Website maintained by the Securities Administrator.

With respect to the Depositor:

1. The undersigned is the Depositor under the Pooling and Servicing Agreement.

Capitalized terms used but not defined herein shall have the respective meanings assigned thereto in the Pooling and Servicing Agreement.

BY ITS CERTIFICATION HEREOF, the undersigned has made the representations above and shall be deemed to have caused its name to be signed hereto by its duly authorized signatory, as of the date certified.

SCHEDULE A

MORTGAGE LOAN SCHEDULE

EX-4.5

Exhibit 4.5

SEQUOIA MORTGAGE TRUST [___]

COLLATERALIZED MORTGAGE BONDS

MORTGAGE LOAN PURCHASE AND SALE AGREEMENT

Among

[SELLER],

[DEPOSITOR]

and

[ISSUER]

dated as of [______ __, 201_]

TABLE OF CONTENTS

		PAGE
Section 1	Representations and Warranties of all Parties	1
Section 2	Additional Representations, Warranties and
	Agreements of Seller and Depositor	1
Section 3	Conveyance of Mortgage Loans	3
Section 4	Intention of Parties	5
Section 5	Termination	6
Section 6	Miscellaneous	7

i

MORTGAGE LOAN PURCHASE AND SALE AGREEMENT

This Mortgage Loan Purchase and Sale Agreement (the “Agreement”) is made as of [____________ __, 201_], by and among [SELLER], a Delaware corporation (“Seller”), [DEPOSITOR], a Delaware corporation (“Depositor”), and [ISSUER] (the “Issuer”), a Delaware statutory business trust/common law New York trust.

WHEREAS, the parties hereto desire to provide for the purchase and sale of the Initial Mortgage Loans on the Closing Date and the Subsequent Mortgage Loans from time to time on each Subsequent Transfer Date (each as defined in the Indenture, dated as of [__________ __, 201_] (the “Indenture”), between the Issuer, [TRUSTEE], as trustee (the “Trustee”) and [MASTER SERVICER] as master servicer, and together the “Mortgage Loans”) in accordance with the terms and conditions set forth in this Agreement.

NOW, THEREFORE, the parties in consideration of good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, hereby agree as follows:

Section 1. Representations and Warranties of all Parties. Depositor, Seller and the Issuer, each as to itself and not the others, hereby represents, warrants and agrees for the benefit of each of the other parties that:

(a) Authorization. The execution, delivery and performance of this Agreement by it are within its respective powers and have been duly authorized by all necessary action on its part.

(b) No Conflict. The execution, delivery and performance of this Agreement will not violate or conflict with (i) as to each of Seller and Depositor, its charter or bylaws, and as to the Issuer, its certificate of trust or the Deposit Trust Agreement, (ii) any resolution or other corporate action by it, (iii) any decisions, statutes, ordinances, rulings, directions, rules, regulations, orders, writs, decrees, injunctions, permits, certificates or other requirements of any court or other governmental or public authority in any way applicable to or binding upon it, and (iv) will not result in or require the creation, except as provided in or contemplated by this Agreement, of any lien, mortgage, pledge, security interest, charge or encumbrance of any kind upon the Mortgage Loans.

(c) Binding Obligation. This Agreement has been duly executed by it and is its legally valid and binding obligation, enforceable against it in accordance with this Agreement’s terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, and by general principles of equity.

Section 2. Additional Representations, Warranties and Agreements of Seller and Depositor.

(a) Seller represents and warrants to, and agrees with, Depositor and the Issuer that (i) on the Closing Date or the applicable Subsequent Transfer Date, as the case may be, Seller will have good, valid and marketable title to the Mortgage Loans that are identified in Schedule A to the Indenture and the contractual rights with respect to the Mortgage Loans under each of (A) the Mortgage Loan Flow Purchase, Sale & Servicing Agreement among Seller, [____________________________] dated [_________] (the “__________ Purchase Agreement”), (B) the Master Mortgage Loan Purchase Agreement between Seller and [____________________________] dated [_________] (the “__________ Purchase Agreement”), (C) the Master Mortgage Loan Purchase and Interim Servicing Agreement between [____________________________] and [___________________] dated [_________] (the “__________ Purchase Agreement”), and (D) the Mortgage Loan Flow Purchase, Sale and Servicing Agreement, dated as of [___________ __, 201_], between Seller and [_______________] (the “_______ Agreement”) (the [______] Agreement, the [______] Agreement, the [______] Agreement and the [______] Agreement, as modified by the related Acknowledgements, collectively referred to herein as the “Servicing Agreement” or “Servicing Agreements”) in each case free and clear of all liens, mortgages, deeds of trust, pledges, security interests, charges, encumbrances or other claims; and (ii) upon transfer to Depositor, Depositor will receive good, valid and marketable title to all of the Mortgage Loans and will receive all of Seller’s contractual rights and obligations under each such Servicing Agreement, in each case free and clear of any liens, mortgages, deeds of trust, pledges, security interests, charges, encumbrances or other claims.

(b) Depositor represents and warrants to, and agrees with, the Issuer that upon transfer of the Mortgage Loans from Seller to Depositor, Depositor will have good, valid and marketable title to the Mortgage Loans and the related contractual rights and obligations under each Servicing Agreement, in each case free and clear of all liens, mortgages, deeds of trust, pledges, security interests, charges, encumbrances or other claims, and, upon transfer to the Issuer, the Issuer will receive good, valid and marketable title to all of the Mortgage Loans and related contractual rights and obligations under each such Servicing Agreement, in each case free and clear of any liens, mortgages, deeds of trust, pledges, security interests, charges, encumbrances or other claims.

(c) Seller hereby makes the representations and warranties as to the Mortgage Loans set forth in [____________], for the benefit of Depositor, the Issuer, and the Trustee.

(d) Seller hereby agrees that it will comply with the provisions of Section 8.04 of the Indenture in respect of a breach of any of the representations and warranties set forth in this Section 2.

(e) Seller and Depositor hereby represent and warrant for the benefit of the Issuer and the Trustee: (i) this Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Mortgage Loans in favor of the Issuer, which security interest is prior to all other Liens, and is enforceable as such as against creditors of and purchasers from Seller or Depositor; (ii) the Mortgage Loans constitute “instruments” within the meaning of the applicable UCC; (iii) Seller and Depositor, immediately prior to their respective transfers of Mortgage Loans under this Agreement, will own and have good, valid and marketable title to the Mortgage Loans free and clear of any Lien, claim or encumbrance of any Person; (iv) Seller and Depositor have received all consents and approvals required by the terms of the Mortgage Loans to the sale of the Mortgage Loans hereunder to the Issuer; (v) all original executed copies of each Mortgage Note that constitute or evidence the Mortgage Loans have been delivered to the Custodian; (vi) Seller and Depositor have received a written acknowledgment from the Custodian that the Custodian is holding the Mortgage Notes that constitute or evidence the Mortgage Loans solely on behalf and for the benefit of the Issuer; (vii) other than the security interest granted to the Issuer pursuant to this Agreement and security interests granted to lenders which will be automatically released at the Closing, Seller and Depositor have not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Mortgage Loans. Seller and Depositor have not authorized the filing of and are not aware of any financing statements against either of them that include a description of collateral covering the Mortgage Loans other than any financing statement relating to the security interest granted to the Issuer hereunder or that will be automatically released upon the sales to the Issuer; (viii) Seller and Depositor are not aware of any judgment or tax lien filing against either of them; and (ix) none of the Mortgage Notes that constitute or evidence the Mortgage Loans has any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Issuer.

2

Section 3. Conveyance of Mortgage Loans.

(a) Initial Mortgage Loans. Seller, concurrently with the execution and delivery hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to Depositor, without recourse, all of Seller’s right, title and interest in and to (i) the Initial Mortgage Loans, including the related Mortgage Documents and all interest and principal received or receivable by Seller on or with respect to the Initial Mortgage Loans after the Cut-off Date and all interest and principal payments on the Initial Mortgage Loans received prior to the Cut-off Date in respect of installments of interest and principal due thereafter, but not including payments of interest and principal due and payable on the Initial Mortgage Loans on or before the Cut-off Date, and all other proceeds received in respect of such Initial Mortgage Loans, (ii) Seller’s rights and obligations under the Purchase Agreements and the Servicing Agreements with respect to the Initial Mortgage Loans, as modified by the related Acknowledgements, (iii) the pledge, control and guaranty agreements and the Limited Purpose Surety Bonds relating to the Additional Collateral Mortgage Loans, (iv) the Insurance Policies with respect to the Initial Mortgage Loans, (v) all cash, instruments or other property held or required to be deposited in the Custodial Accounts and the Pledged Accounts with respect to the Initial Mortgage Loans, and (vi) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other liquid assets, including, without limitation, all Insurance Proceeds, Liquidation Proceeds and condemnation awards.

On or prior to the Closing Date, Seller shall deliver to Depositor or, at Depositor’s direction, to the Custodian, the Trustee’s Mortgage File for each Initial Mortgage Loan in the manner set forth in Section 2 of the Custody Agreement. Release of the Trustee’s Mortgage Files on the Closing Date shall be made against payment by Depositor of the purchase price for the Initial Mortgage Loans and related assets, which shall be a combination of credit for an additional capital contribution and cash wired to Seller’s account. The amount of the purchase price payable by Depositor shall be set forth in writing in a separate letter.

Depositor, concurrently with the execution and delivery hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the Issuer, without recourse, all of Depositor’s right, title and interest in and to (i) the Initial Mortgage Loans, including the related Mortgage Documents and all interest and principal received or receivable by Depositor on or with respect to the Initial Mortgage Loans after the Cut-Off Date and all interest and principal payments on the Initial Mortgage Loans received prior to the Cut-off Date in respect of installments of interest and principal due thereafter, but not including payments of interest and principal due and payable on the Initial Mortgage Loans on or before the Cut-off Date, and all other proceeds received in respect of such Initial Mortgage Loans, (ii) Depositor’s rights and obligations under this Agreement and the Purchase Agreements and the Servicing Agreements with respect to the Initial Mortgage Loans, as modified by the related Acknowledgements, (iii) the pledge, control and guaranty agreements and the Limited Purpose Surety Bonds relating to the Additional Collateral Mortgage Loans, (iv) the Insurance Policies with respect to the Initial Mortgage Loans, (v) all cash, instruments or other property held or required to be deposited in the Custodial Accounts and the Pledged Accounts with respect to the Initial Mortgage Loans, and (vi) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other liquid assets, including, without limitation, all Insurance Proceeds, Liquidation Proceeds and condemnation awards.

3

On or prior to the Closing Date, Depositor shall deliver, or cause to be delivered, to the Custodian the Trustee’s Mortgage File for each Initial Mortgage Loan in the manner set forth in Section 2 of the Custody Agreement. Release of the Trustee’s Mortgage Files on the Closing Date shall be made against payment by the Issuer of the purchase price for the Initial Mortgage Loans and related assets, which shall be a combination of credit for an additional capital contribution, the Class B-[__] and Class B-[__] Bonds and cash wired to the order of Depositor. The amount of the purchase price payable by the Issuer shall be set forth in writing in a separate letter.

(b) [Subsequent Mortgage Loans. Seller, effective as of the applicable Subsequent Transfer Date, hereby sells, transfers, assigns, sets over and otherwise conveys to Depositor, without recourse, all of Seller’s right, title and interest in and to (i) the Subsequent Mortgage Loans, including the related Mortgage Documents and all interest and principal received or receivable by Seller on or with respect to the Subsequent Mortgage Loans after the Subsequent Cut-off Date and all interest and principal payments on the Subsequent Mortgage Loans received prior to the related Subsequent Cut-off Date in respect of installments of interest and principal due thereafter, but not including payments of interest and principal due and payable on the Subsequent Mortgage Loans on or before the related Subsequent Cut-off Date, and all other proceeds received in respect of such Subsequent Mortgage Loans, (ii) Seller’s rights and obligations under the [_______] Agreements and the [________] Agreement with respect to the Subsequent Mortgage Loans, as modified by the related Acknowledgements, (iii) the pledge, control and guaranty agreements and the Limited Purpose Surety Bonds relating to the Additional Collateral Mortgage Loans, (iv) the Insurance Policies with respect to the Subsequent Mortgage Loans, (v) all cash, instruments or other property held or required to be deposited in the Custodial Accounts and the Pledged Accounts with respect to the Subsequent Mortgage Loans, and (vi) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other liquid assets, including without limitation, all Insurance Proceeds, Liquidation Proceeds and condemnation awards.

Each purchase and sale of Subsequent Mortgage Loans shall be completed pursuant to a Notice of Subsequent Transfer Date substantially in the form of Exhibit A hereto, which notice shall be prepared by Seller and delivered by it to Depositor, the Issuer and the Trustee no later than two Business Days prior to the related Subsequent Transfer Date. For each Subsequent Transfer Date, Seller, Depositor and the Issuer agree to furnish such documents and certificates and to take such additional actions as may be required under the Indenture to make the related Subsequent Mortgage Loans subject to the Lien of Indenture and to permit the Trustee to release funds from the Pre-funding Account as provided in the Indenture.

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On or prior to the applicable Subsequent Transfer Date, Seller shall deliver to Depositor or, at Depositor’s direction, to the Custodian, the Trustee’s Mortgage File for each Subsequent Mortgage Loan in the manner set forth in Section 2 of the Custody Agreement. Release of the Trustee’s Mortgage Files on each Subsequent Transfer Date shall be made against payment by Depositor of the purchase price for the related Subsequent Mortgage Loans and related assets, which shall be a combination of credit for an additional capital contribution and cash wired to Seller’s account. The amount of the purchase price payable by Depositor shall be set forth in writing in a separate letter.

Depositor, effective as of the applicable Subsequent Transfer Date, hereby sells, transfers, assigns, sets over and otherwise conveys to the Issuer, without recourse, all of Depositor’s right, title and interest in and to (i) the Subsequent Mortgage Loans, including the related Mortgage Documents and all interest and principal received or receivable by Depositor on or with respect to the Subsequent Mortgage Loans after the related Subsequent Cut-Off Date and all interest and principal payments on the Subsequent Mortgage Loans received prior to the Subsequent Cut-off Date in respect of installments of interest and principal due thereafter, but not including payments of interest and principal due and payable on the Subsequent Mortgage Loans on or before the related Subsequent Cut-off Date, and all other proceeds received in respect of such Subsequent Mortgage Loans, (ii) Depositor’s rights and obligations under the [________] Agreements and the [_________] Agreement with respect to the Subsequent Mortgage Loans, as modified by the related Acknowledgements, (iii) the pledge, control and guaranty agreements and the Limited Purpose Surety Bonds relating to the Additional Collateral Mortgage Loans, (iv) the Insurance Policies with respect to the Subsequent Mortgage Loans, (v) all cash, instruments or other property held or required to be deposited in the Custodial Accounts and the Pledged Accounts with respect to the Subsequent Mortgage Loans, and (vi) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other liquid assets, including, without limitation, all Insurance Proceeds, Liquidation Proceeds and condemnation awards.

On or prior to the applicable Subsequent Transfer Date, Depositor shall deliver, or cause to be delivered, to the Custodian the Trustee’s Mortgage File for each Subsequent Mortgage Loan in the manner set forth in Section 2 of the Custody Agreement. Release of the Trustee’s Mortgage Files on each Subsequent Transfer Date shall be made against payment by the Issuer of the purchase price for the related Subsequent Mortgage Loans and related assets, which shall be a combination of credit for an additional capital contribution and cash wired to the order of Depositor. The amount of the purchase price payable by the Issuer shall be set forth in writing in a separate letter.

(c)] Defective Mortgage Loans. If any Mortgage Loan is required to be repurchased due to defective or missing documentation pursuant to Section 8.04 of the Indenture, Seller shall, at its option, either (a) repurchase or cause the applicable seller of such Mortgage Loan to Seller to repurchase such Mortgage Loan at the Purchase Price, or (b) provide or cause the applicable seller of such Mortgage Loan to Seller to provide a Replacement Mortgage Loan, subject to the terms and conditions of the Indenture.

Section 4. Intention of Parties. It is the express intent of the parties hereto that (without addressing characterization for GAAP purposes) the conveyance (i) of the Mortgage Loans by Seller to Depositor and (ii) of the Mortgage Loans by Depositor to the Issuer each be, and be construed as, an absolute sale thereof. It is, further, not the intention of the parties that such conveyances be deemed a pledge thereof. However, in the event that, notwithstanding the intent of the parties, such assets are held to be the property of the assigning party, or if for any other reason this Agreement is held or deemed to create a security interest in the Mortgage Loans, then (i) this Agreement shall be deemed to be a security agreement within the meaning of the Uniform Commercial Code of the State of New York and (ii) the conveyances provided for in this Agreement shall be deemed to be an assignment and a grant (i) by Seller to Depositor or (ii) by Depositor to the Issuer, of a security interest in all of the assets described in such conveyances, whether now owned or hereafter acquired.

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Seller, Depositor and the Issuer shall, to the extent consistent with this Agreement, take such actions as may be necessary to ensure that, if this Agreement were deemed to create a security interest in the Mortgage Loans, such security interest would be deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of this Agreement. Seller and Depositor shall arrange for filing any Uniform Commercial Code continuation statements in connection with any security interest granted or assigned hereunder.

Section 5. Termination.

(a) Depositor may terminate this Agreement, by notice to Seller, at any time at or prior to the Closing Date:

(i) if the Underwriting Agreement is terminated by the Underwriters pursuant to the terms of the Underwriting Agreement or if the Underwriters do not complete the transactions contemplated by the Underwriting Agreement as the result of the failure of any condition set forth therein or if there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the Prospectus or Prospectus Supplement, any material adverse change in the financial condition, earnings, business affairs or business prospects of Seller, whether or not arising in the ordinary course of business, or

(ii) if there has occurred any material adverse change in the financial markets in the United States, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Underwriters, impracticable to market the Bonds or to enforce contracts for the sale of the Bonds, or

(iii) if trading in any securities of Seller has been suspended or limited by the Commission or the New York Stock Exchange, or if trading generally on the American Stock Exchange or the New York Stock Exchange or in the NASDAQ National Market System has been suspended or limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the Commission, the National Association of Securities Dealers, Inc. or any other governmental authority, or

(iv) if a banking moratorium has been declared by either Federal or New York authorities.

(b) This Agreement shall terminate automatically without any required notice or other action by any party hereto if the Closing Date for the issuance of the Bonds has not occurred by [____________ __, 201_].

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(c) Notwithstanding any termination of this Agreement or the completion of all sales contemplated hereby, the representations, warranties and agreements in Sections 1 and 2 hereof shall survive and remain in full force and effect.

Section 6. Miscellaneous.

(a) Amendments, Etc. No rescission, modification, amendment, supplement or change of this Agreement shall be valid or effective unless in writing and signed by all of the parties to this Agreement. No amendment of this Agreement may modify or waive the representations, warranties and agreements set forth in Sections 1 and 2 hereof.

(b) Binding Upon Successors, Etc. This Agreement shall bind and inure to the benefit of and be enforceable by Seller, Depositor, the Issuer, and the respective successors and assigns thereof. The parties hereto acknowledge that the Issuer is acquiring the Mortgage Loans for the purpose of pledging, transferring, assigning, setting over and otherwise conveying them to the Trustee, pursuant to the Indenture for inclusion in the Trust Estate. As an inducement to the Issuer to purchase the Mortgage Loans, Seller and Depositor acknowledge and consent to the assignment to the Trustee by the Issuer of all of the Issuer’s rights against Seller and Depositor hereunder in respect of the Mortgage Loans sold to the Issuer and that the enforcement or exercise of any right or remedy against Seller and Depositor hereunder by the Trustee or to the extent permitted under the Indenture shall have the same force and effect as if enforced and exercised by the Issuer directly.

(c) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(d) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

(e) Headings. The headings of the several parts of this Agreement are inserted for convenience of reference and are not intended to be a part of or affect the meaning or interpretation of this Agreement.

(f) Definitions. Capitalized terms not otherwise defined herein have the meanings ascribed to such terms in the Indenture.

(g) Nonpetition Covenant. Until one year plus one day shall have elapsed since the termination of the Indenture in accordance with its terms, neither Seller nor any assignee of Seller or Depositor or the Issuer shall petition or otherwise invoke the process of any court or government authority for the purpose of commencing or sustaining a case against Depositor or the Issuer under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of Depositor or the Issuer or any substantial part of its property, or ordering the winding up or liquidation of the affairs of Depositor or the Issuer.

(h) Limitation of Liability of Owner Trustee. It is expressly understood and agreed by the parties hereto that (a) this Agreement is executed and delivered in the name and on behalf of the Issuer by Owner Trustee, not individually or personally but solely as owner trustee of Depositor Mortgage Trust 7, in the exercise of the powers and authority conferred and vested in it under the Deposit Trust Agreement, (b) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as a personal representation, undertaking and agreement by Owner Trustee but is made solely in the name and on behalf of the Issuer and intended for the purpose of binding only the Issuer, and (c) under no circumstances shall Owner Trustee be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Agreement or the other Basic Documents or otherwise.

[remainder of page intentionally left blank]

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IN WITNESS WHEREOF, each party has caused this Mortgage Loan Purchase and Sale Agreement to be executed by its duly authorized officer or officers as of the day and year first above written.

[SELLER]
By:
Name:
Title:
[DEPOSITOR]
By:
Name:
Title:
[ISSUER]
By:	[Owner Trustee]
By:
Name:
Title:

EXHIBIT A

Mortgage Loan Purchase and Sale Agreement

[Form of Notice of Subsequent Transfer Date]

[ADDRESSEES]

Pursuant to Section 3(b) of the Mortgage Loan Purchase and Sale Agreement (the “Purchase and Sale Agreement”) dated as of [___________ __, 201_], among the undersigned and you, you are hereby notified that the Subsequent Transfer Date for the Subsequent Mortgage Loans identified in the attached schedule is [______________]. On such Subsequent Transfer Date, the Subsequent Mortgage Loans shall be added to Schedule A of the Indenture referred to in the Purchase and Sale Agreement, against release of an aggregate of [$________] of funds from the Pre-Funding Account.

Payment of the purchase price for such Subsequent Mortgage Loans will be due on such date in accordance with the terms of the Purchase and Sale Agreement.

Very truly yours,
[SELLER]
By:
	Name:
	Title:

EX-4.6

Exhibit 4.6

SEQUOIA MORTGAGE TRUST 201_ - _

MORTGAGE PASS-THROUGH CERTIFICATES

MORTGAGE LOAN PURCHASE AND SALE AGREEMENT

Between

[                                                                 ],

Seller

and

[                                                                 ] 

Depositor

dated as of __________ __, 201_

TABLE OF CONTENTS

	PAGE
Section 1.	Representations and Warranties of [Seller] and [Depositor]	1
Section 2.	Additional Representations, Warranties and Agreements of [Seller]	1
Section 3.	Arbitration and Representations and Warranties of [Seller] With Respect to the Period of Time that [Seller] Owned Mortgage Loans	6
Section 4.	Conveyance of Mortgage Loans	8
Section 5	Intention of Parties	9
Section 6.	Termination	10
Section 7.	Miscellaneous	10
Schedule A.	Mortgage Loan Schedule

MORTGAGE LOAN PURCHASE AND SALE AGREEMENT

This Mortgage Loan Purchase and Sale Agreement (the “Agreement”) is made as of __________ __, 201_, by and between [__________________], a Delaware corporation (“______”)[Seller], and [__________________], a Delaware corporation (“_____”)[Depositor].

WHEREAS, the parties hereto desire to provide for the purchase and sale of the Mortgage Loans on the date hereof (the “Closing Date”) in accordance with the terms and conditions set forth in this Agreement.

NOW, THEREFORE, the parties in consideration of good and valuable and fair consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, hereby agree as follows:

Section 1.Representations and Warranties of Seller and Depositor. Seller and Depositor, each as to itself and not the other, hereby represents, warrants and agrees for the benefit of the other party that:

(a) Authorization. The execution, delivery and performance of this Agreement by it are within its respective powers and have been duly authorized by all necessary action on its part.

(b) No Conflict. The execution, delivery and performance of this Agreement will not violate or conflict with (i) its charter or bylaws, (ii) any resolution or other corporate action by it, or (iii) any decisions, statutes, ordinances, rulings, directions, rules, regulations, orders, writs, decrees, injunctions, permits, certificates or other requirements of any court or other governmental or public authority in any way applicable to or binding upon it, and will not result in or require the creation, except as provided in or contemplated by this Agreement, of any lien, mortgage, pledge, security interest, charge or encumbrance of any kind upon the Mortgage Loans.

(c) Binding Obligation. This Agreement has been duly executed by it and is its legally valid and binding obligation, enforceable against it in accordance with this Agreement’s terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, and by general principles of equity.

Section 2.Additional Representations, Warranties and Agreements of Seller.

(a) Title and Mortgage Loan Schedule. Seller represents and warrants to, and agrees with, Depositor that (i) on the Closing Date, Seller will have good, valid and marketable title to the mortgage loans identified on Schedule A hereto (the “Mortgage Loans”), in each case free and clear of all liens, mortgages, deeds of trust, pledges, security interests, charges, encumbrances or other claims; (ii) upon transfer to Depositor, Depositor will receive good, valid and marketable title to all of the Mortgage Loans, in each case free and clear of any liens, mortgages, deeds of trust, pledges, security interests, charges, encumbrances or other claims; and (iii) (1) as to each Mortgage Loan that is not a Mortgage Loan originated by _____________ (“_____________”) and purchased by Seller from _____________ (a “_____________Loan”), as of the date on which Seller purchased such Mortgage Loan from _____________ (“_____________”), _____________ (“_____________”), _____________ (“_____________”), or _____________ (“_____________”), as applicable (each, an “Originator”), and (2) as to each _______ Loan, as of the date on which ___________ purchased such Mortgage Loan from ______, the information set forth in the Mortgage Loan Schedule in the fields identified as “Document Type,” “Monthly Income” and “Assets Verified” is complete, true and correct in all material respects.

(b) Additional Representations. Seller represents and warrants to, and agrees with, Depositor that, as of the Closing Date:

(i) As to each Mortgage Loan, the lien of the Mortgage is free and clear of all adverse claims, liens and encumbrances having priority over the first lien of the Mortgage subject only to (1) the lien of non-delinquent current real property taxes and assessments not yet due and payable, (2) covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording which are acceptable to mortgage lending institutions generally and which do not adversely affect the appraised value of the Mortgaged Property as set forth in such appraisal and (3) other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property.

(ii) As to each Mortgage Loan transferred to Seller pursuant to the [________] Agreement, the related Mortgaged Property is located in the U.S. or a territory of the U.S. and consists of a one- to four-unit residential property, which may include, but is not limited to, a single-family dwelling, townhouse, condominium unit, or unit in a planned unit development or, in the case of a Cooperative Loan (as defined in the [________] Agreement), one or more leases or occupancy agreements.

(iii) To the actual knowledge of Seller, each Mortgage Loan constitutes a “qualified mortgage” under Section 860G(a)(3)(A) of the Code and Treasury Regulation Section 1.860-2(a)(1).

(iv) As of the Closing Date, the most recent FICO score listed on the Mortgage Loan Schedule was no more than four months old.

(v) As to each Mortgage Loan transferred to Seller pursuant to the [________] Agreement, the [________] Agreement or the [________] Agreement, no Mortgage Loan is subject to a lost note affidavit.

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(vi) As to each Mortgage Loan transferred to Seller pursuant to the [________] Agreement, the [________] Agreement, the [________] Agreement, the [________] Agreement, the [________] Agreement, the [________] Agreement, the [________] Agreement or the [________] Agreement, with respect to any hazard or mortgage insurance covering such a Mortgage Loan and the related Mortgaged Property, the Originator has not engaged in, and Seller has no knowledge of the Mortgagor’s having engaged in any act or omission that would impair the coverage of any such policy, the benefits of the endorsement, or the validity and binding effect of either, including without limitation, no unlawful fee, commission, kickback, or other unlawful compensation or value of any kind as has been or will be received, retained or realized by any attorney, firm or other person or entity, and no such unlawful items have been received, retained or realized by the Originator.

(vii) As to each Mortgage Loan transferred to Seller pursuant to the [________] Agreement, no fraud or material error, omission, misrepresentation, negligence or similar occurrence with respect to a Mortgage Loan has taken place on the part of the Originator, any correspondent or mortgage broker involved in the origination of such Mortgage Loan, the Mortgagor, or any appraiser or other party involved in the origination of the Mortgage Loan or in the application of any insurance in relation to such Mortgage Loan.

(viii) As to each Mortgage Loan transferred to Seller pursuant to the [________] Agreement, the servicing of such Mortgage Loan prior to the Closing Date complied in all material respects with all then-applicable federal, state and local laws.

(ix) As to each Mortgage Loan transferred to Seller pursuant to the [________] Agreement, the [________] Agreement, the [________] Agreement, the [________] Agreement, the [________] Agreement, the [________] Agreement, the [________] Agreement or the [________] Agreement that is secured by a long-term residential lease (a “Lease”):

(A) The terms of the Lease expressly permit the mortgaging of the leasehold estate, the assignment of the Lease without the lessor’s consent (or the lessor’s consent has been obtained and is in the Mortgage File), and the acquisition by the holder of the Mortgage of the rights of the lessee upon foreclosure or assignment in lieu of foreclosure or provide the holder of the Mortgage with substantially similar protection.

(B) The terms of the Lease do not allow the termination thereof upon the lessee’s default without the holder of the Mortgage being entitled to receive written notice, and opportunity to cure, such default or prohibit the holder of the Mortgage from being insured under the hazard insurance policy related to the Mortgaged Property.

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(C) The original term of the Lease is not less than 15 years and the Lease does not terminate by its terms prior to at least five years from the maturity date of the Mortgage Loan.

(D) The Mortgaged Property is located in a jurisdiction in which the use of leasehold estates for residential properties is an accepted practice.

(c) Security Interest Matters. Seller hereby represents and warrants for the benefit of Depositor and the Trustee (as defined in the Pooling and Servicing Agreement, dated as of _________ __, 201_ (as in effect on the date of execution hereof, the “Pooling and Servicing Agreement”) among Depositor, as depositor, [_____________], as master servicer and securities administrator, and [_____________], as trustee) (as assignee of Depositor): (i) this Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Mortgage Loans in favor of Depositor, which security interest is prior to all other Liens, and is enforceable as such as against creditors of and purchasers from Seller; (ii) the Mortgage Notes constitute “instruments” within the meaning of the applicable UCC; (iii) Seller, immediately prior to its transfer of Mortgage Loans under this Agreement, will own and have good, valid and marketable title to the Mortgage Loans free and clear of any Lien, claim or encumbrance of any Person; (iv) Seller has received all consents and approvals required by the terms of the Mortgage Loans to the sale of the Mortgage Loans hereunder to Depositor; (v) all original executed copies of each Mortgage Note that constitute or evidence the Mortgage Loans have been delivered to the Custodian (as assignee of Depositor); (vi) Seller has received a written acknowledgment from the Custodian that such Custodian is holding the Mortgage Notes that constitute or evidence the Mortgage Loans solely on behalf and for the benefit of Depositor or its assignee; (vii) other than the security interest granted to Depositor pursuant to this Agreement and security interests granted to lenders which will be automatically released on the Closing Date, Seller has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Mortgage Loans; Seller has not authorized the filing of and is not aware of any financing statements against it that include a description of collateral covering the Mortgage Loans other than any financing statement relating to the security interest granted to Depositor hereunder or that will be automatically released upon the sale to Depositor; (viii) Seller is not aware of any judgment or tax lien filing against itself; and (ix) none of the Mortgage Notes that constitute or evidence the Mortgage Loans have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than Depositor.

(d) Cure, Repurchase or Substitution Obligation. In the event of a breach of any of the representations and warranties of Seller specified in this Section 2 that materially adversely affects the value of a Mortgage Loan or the interest therein of the Certificateholders (as assignees of Depositor), Seller will cure the breach, or repurchase or substitute for such Mortgage Loan pursuant to Section 2.04 of the Pooling and Servicing Agreement and Section 3 below.

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In the event of a breach of any of the representations and warranties of [________] under the Flow Mortgage Loan Purchase and Sale Agreement dated as of [________], between Seller, and [________], as amended by the Assignment of Representations and Warranties Agreement, dated __________ __, 201_, by and among Seller, Depositor, the Trustee, and [________](the “[________] Agreement”) that materially and adversely affects the value of a Mortgage Loan or the interest therein of the Certificateholders (as assignees of Depositor), if [________] is unable to cure, repurchase or substitute the related Mortgage Loan pursuant to the terms of the [________] Agreement because [________] is the subject of a Bankruptcy or insolvency proceeding or no longer in existence, then Seller will cure the breach or repurchase or substitute such Mortgage Loan pursuant to Section 2.04 of the Pooling and Servicing Agreement and Section 3 below.

In the event of a breach of any of the representations and warranties of [________] under the Flow Mortgage Loan Purchase and Sale Agreement dated as of [________], between Seller, and [________], as amended by the Assignment of Representations and Warranties Agreement, dated __________ __, 201_, by and among Seller, Depositor, the Trustee, and [________] (the “[________] Agreement”) that materially and adversely affects the value of a Mortgage Loan or the interest therein of the Certificateholders (as assignees of Depositor), if [________] is unable to cure, repurchase or substitute the related Mortgage Loan pursuant to the terms of the [________] Agreement because [________] is the subject of a Bankruptcy or insolvency proceeding or no longer in existence, then Seller will cure the breach or repurchase or substitute such Mortgage Loan pursuant to Section 2.04 of the Pooling and Servicing Agreement and Section 3 below.

In the event of a breach of any of the representations and warranties of [________] under the Flow Mortgage Loan Purchase and Sale Agreement dated as of [________], between Seller, and [________], as amended by the Assignment of Representations and Warranties Agreement, dated __________ __, 201_, by and among Seller, Depositor, the Trustee, and [________](the “[________]Agreement”) that materially and adversely affects the value of a Mortgage Loan or the interest therein of the Certificateholders (as assignees of Depositor), if [________] is unable to cure, repurchase or substitute the related Mortgage Loan pursuant to the terms of the [________] Agreement because [________] is the subject of a Bankruptcy or insolvency proceeding or no longer in existence, then Seller will cure the breach or repurchase or substitute such Mortgage Loan pursuant to Section 2.04 of the Pooling and Servicing Agreement and Section 3 below.

In the event of a breach of any of the representations and warranties of [________] under the Mortgage Loan Flow Purchase, Sale & Servicing Agreement, dated as of [________], between Seller and [________], as amended by the Assignment, Assumption and Recognition Agreement, dated __________ __, 201_, by and among Seller, Depositor, the Trustee, and [________](the “[________]Agreement”) that materially and adversely affects the value of a Mortgage Loan or the interest therein of the Certificateholders (as assignees of Depositor), if [________] is unable to cure, repurchase or substitute the related Mortgage Loan pursuant to the terms of the [________] Agreement because [________] is the subject of a Bankruptcy or insolvency proceeding or no longer in existence, then Seller will cure the breach or repurchase or substitute such Mortgage Loan pursuant to Section 2.04 of the Pooling and Servicing Agreement and Section 3 below.

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In the event of a breach of any of the representations and warranties of [________] under the Flow Mortgage Loan Purchase and Sale Agreement, dated as of [________], between Seller and [________], as amended by the Assignment of Representations and Warranties Agreement, dated __________ __, 201_, by and among Seller, Depositor, the Trustee, and [________](the “[________]Agreement”) that materially and adversely affects the value of a Mortgage Loan or the interest therein of the Certificateholders (as assignees of Depositor), if [________] is unable to cure, repurchase or substitute the related Mortgage Loan pursuant to the terms of the [________] Agreement because [________] is the subject of a Bankruptcy or insolvency proceeding or no longer in existence, then Seller will cure the breach or repurchase or substitute such Mortgage Loan pursuant to Section 2.04 of the Pooling and Servicing Agreement and Section 3 below.

In the event of a breach of any of the representations and warranties of [________] under the Flow Mortgage Loan Purchase and Sale Agreement, dated as of [________], between Seller and [________], as amended by the Assignment of Representations and Warranties Agreement, dated __________ __, 201_, by and among Seller, Depositor, the Trustee, and [________](the “[________]Agreement”) that materially and adversely affects the value of a Mortgage Loan or the interest therein of the Certificateholders (as assignees of Depositor), if [________] is unable to cure, repurchase or substitute the related Mortgage Loan pursuant to the terms of the [________] Agreement because [________] is the subject of a Bankruptcy or insolvency proceeding or no longer in existence, then Seller will cure the breach or repurchase or substitute such Mortgage Loan pursuant to Section 2.04 of the Pooling and Servicing Agreement and Section 3 below.

In the event of a breach of any of the representations and warranties of [________] under the Flow Mortgage Loan Purchase and Sale Agreement dated as of [________], between Seller, and [________], as amended by the Assignment of Representations and Warranties Agreement, dated __________ __, 201_, by and among Seller, Depositor, the Trustee, and [________](the “[________] Agreement”) that materially and adversely affects the value of a Mortgage Loan or the interest therein of the Certificateholders (as assignees of Depositor), if [________] is unable to cure, repurchase or substitute the related Mortgage Loan pursuant to the terms of the [________] Agreement because [________] is the subject of a Bankruptcy or insolvency proceeding or no longer in existence, then Seller will cure the breach or repurchase or substitute such Mortgage Loan pursuant to Section 2.04 of the Pooling and Servicing Agreement and Section 3 below.

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Section 3.Arbitration and Representations and Warranties of Seller with respect to the Period of Time that Seller Owned Mortgage Loans.

(a) Seller hereby covenants and agrees that, if a breach of any representation and warranty set forth in Purchase Agreements with respect to the characteristics of a Mortgage Loan exists on the date hereof that materially and adversely affects the value of any Mortgage Loan or the interest of Depositor in any Mortgage Loan and such breach did not exist as of the date that Seller purchased such Mortgage Loan, Seller shall have a period of 60 days from the earlier of either discovery or receipt of written notice from Depositor to Seller of such breach within which to correct or cure such breach. Seller hereby covenants and agrees that if any breach cannot be corrected or cured within such 60 day period, then Seller shall repurchase the related Mortgage Loan at the Repurchase Price not later than 90 days after its discovery or receipt of notice of such breach by wire transfer of immediately available funds to such account as Depositor shall specify to Seller.

(b) Seller and Depositor agree that the resolution of any controversy or claim arising out of or relating to an obligation or alleged obligation of Seller to repurchase a Mortgage Loan or Mortgage Loans pursuant to Section 2(d) or Section 3(a) above shall be by Arbitration administered by the American Arbitration Association. If any such controversy or claim has not been resolved to the satisfaction of both Seller and Depositor, either party may commence Arbitration to resolve the dispute; provided that a party may commence Arbitration with respect to one or more unresolved allegations only during the months of January, April, July and October, and all matters with respect to which Arbitration has been commenced in any such month shall be heard in a single Arbitration in the immediately following month or as soon as practicable thereafter; and provided further that if any Arbitration arising out of or relating to an obligation or alleged obligation of an Originator to repurchase a Mortgage Loan relating to the same representation and warranty has commenced and is continuing, then such Arbitration shall be joined with the Arbitration commenced hereunder.

(c) To commence Arbitration, the moving party shall deliver written notice to the other party that it has elected to pursue Arbitration in accordance with this Section 3, provided that if Seller has not responded to Depositor's notification of a breach of a representation and warranty, Depositor shall not commence Arbitration with respect to that breach before 60 days following such notification in order to provide Seller with an opportunity to respond to such notification. Within 10 Business Days after a party has provided notice that it has elected to pursue Arbitration, each party may submit the names of one or more proposed Arbitrators to the other party in writing. If the parties have not agreed on the selection of an Arbitrator within five Business Days after the first such submission, then the party commencing Arbitration shall, within the next 5 Business Days, notify the American Arbitration Association in New York, New York and request that it appoint a single Arbitrator with experience in arbitrating disputes arising in the financial services industry.

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(d) It is the intention of the parties that Arbitration shall be conducted in as efficient and cost-effective a manner as is reasonably practicable, without the burden of discovery. Accordingly, the Arbitrator will resolve the dispute on the basis of a review of the written correspondence between the parties (including any supporting materials attached to such correspondence) conveyed by the parties to each other in connection with the dispute prior to the delivery of notice to commence Arbitration; however, upon a showing of good cause, a party may request the Arbitrator to direct the production of such additional information, evidence and/or documentation from the parties that the Arbitrator deems appropriate. If requested by the Arbitrator or any party, any hearing with respect to an Arbitration shall be conducted by video conference or teleconference, except upon the agreement of both parties or the request of the Arbitrator.

(e) The finding of the Arbitrator shall be final and binding upon the parties. Judgment upon any arbitration award rendered may be entered and enforced in any court of competent jurisdiction. The costs of the Arbitrator shall be shared equally between both parties. Each party, however, shall bear its own attorneys fees and costs in connection with the Arbitration.

(f) The following capitalized terms shall have the meaning specified below:

Arbitration: Arbitration in accordance with the then governing Commercial Arbitration Rules of the American Arbitration Association (“AAA”) and administered by the AAA, which shall be conducted in New York, New York or other place mutually acceptable to the parties to the arbitration.

Arbitrator: A person who is not affiliated with Seller, Depositor or any Originator, who is a member of the American Arbitration Association.

Repurchase Price: With respect to any Mortgage Loan, a price equal to (i) the unpaid principal balance of such Mortgage Loan plus (ii) interest on such unpaid principal balance at the mortgage interest rate from and including the last Due Date through which interest has been paid by or on behalf of the Mortgagor up to the Due Date following the date of repurchase, minus (iii) amounts received in respect of such repurchased Mortgage Loan which are being held in the Collection Account for distribution in connection with such Mortgage Loan.

Section 4. Conveyance of Mortgage Loans.

(a) Mortgage Loans. In return for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller, concurrently with the execution and delivery hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to Depositor, without recourse, all of Seller’s right, title and interest in and to the Mortgage Loans, including the related Mortgage Documents and all principal and interest received by Seller on or with respect to the Mortgage Loans after _________ __, 201_ (the “Cut-off Date”) (other than Scheduled Payments due on or before such date), and all such payments due after such date but received on or prior to such date and intended by the related Mortgagors to be applied after such date, all insurance policies with respect to the Mortgage Loans, and all proceeds of the foregoing.

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Depositor shall pay the purchase price for the Mortgage Loans by delivering to Seller on the Closing Date cash in an amount mutually agreed upon by Seller and Depositor.

On or prior to the Closing Date, Seller shall deliver or cause to be delivered to Depositor or, at Depositor’s direction, to the Custodian, the Trustee Mortgage File for each Mortgage Loan in the manner set forth in Article 3 of the Custodial Agreement as in effect on the date of execution hereof, by and among [____________], as custodian and master servicer, Seller, as seller, Depositor, as depositor, and [___________], as trustee.

(b) Limited Remedies. Depositor acknowledges and agrees that it shall have no recourse to Seller with respect to any Defective Mortgage Loan except as provided in Section 2(d) and Section 3 and that Depositor’s remedies with respect to any other Defective Mortgage Loans shall be exercised with respect to the Originator of such Defective Mortgage Loan as set forth in the (i) the [________] Agreement, (ii) either of the Assignment, Assumption and Recognition Agreements, dated as of __________ __, 201_, among Seller, Depositor, the Trustee, and ________ (together, the “______Agreement”), as applicable, (iii) the _______ Agreement, (iv) the _______ Agreement, (v) the _______ Agreement, (vi) the _______ Agreement, (vii) the _______ Agreement, or (viii) the _______ Agreement, as applicable.

Section 5.Intention of Parties. The conveyance of the Mortgage Loans and all other property hereunder by Seller as contemplated hereby is absolute and is intended by the parties to constitute a sale of the Mortgage Loans and such other property by Seller to Depositor. It is, further, not intended that such conveyance be the grant of a security interest to secure a loan or other obligation. However, in the event that, notwithstanding the intent of the parties, the Mortgage Loans and the other property described in Section 3(a) are held to be the property of Seller, or if for any other reason this Agreement is held or deemed to create a security interest in the Mortgage Loans and such other property, then this Agreement shall constitute a security agreement, and the conveyance provided for in Section 3(a) shall be deemed to be a grant by Seller to Depositor of, and Seller hereby grants to Depositor, to secure all of Seller’s obligations hereunder, a security interest in all of Seller’s right, title and interest, whether now owned or hereafter acquired, in and to (i) the Mortgage Loans, including the Mortgage Notes, the Mortgages, and the right to all payments of principal and interest received on or with respect to the Mortgage Loans after the Cut-off Date (other than Scheduled Payments due on or before such date), and all such payments due after such date but received on or prior to such date and intended by the related Mortgagors to be applied after such date, (ii) all of Seller’s right, title and interest, if any, in and to all amounts from time to time credited to and the proceeds of any Custodial Accounts or any Escrow Account established with respect to the Mortgage Loans, (iii) with respect to the Mortgage Loans, to the extent set forth in the [________] Agreement, the [________] Agreement, the [________] Agreement, the [________] Agreement, the [________] Agreement, the [________] Agreement, the [________] Agreement, the [________] Agreement, the Assignment, Assumption and Recognition Agreement, dated __________ __, 201_, by and among Seller, Depositor, the Trustee, ________________, and ____________ or the Assignment, Assumption and Recognition Agreement, dated __________ __, 201_, by and among Seller, Depositor, the Trustee and ____________, Seller’s rights and obligations under the applicable Servicing Agreement and all of Seller’s rights under the Mortgage Loan Purchase and Sale Agreement, (iv) all of Seller’s right, title and interest, if any, in REO Property and the proceeds thereof, (v) all of Seller’s rights under any Insurance Policies related to the Mortgage Loans, (vi) Seller’s security interest in any collateral pledged to secure the Mortgage Loans, including the Mortgaged Properties, and (vii) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other liquid assets, including, without limitation, all Insurance Proceeds, Liquidation Proceeds and condemnation awards.

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Seller and Depositor shall, to the extent consistent with this Agreement, take such actions as may be necessary to ensure that, if this Agreement were deemed to create a security interest in the Mortgage Loans, such security interest would be deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of this Agreement. Seller shall arrange for filing any Uniform Commercial Code financing statements and continuation statements in connection with such security interest.

Section 6.Termination.

Notwithstanding any termination of this Agreement or the completion of all sales contemplated hereby, the representations, warranties and agreements in Sections 1 and 2 hereof shall survive and remain in full force and effect.

Section 7.Miscellaneous.

(a) Amendments, Etc. No rescission, modification, amendment, supplement or change of this Agreement shall be valid or effective unless in writing and signed by all of the parties to this Agreement. No amendment of this Agreement may modify or waive the representations, warranties and agreements set forth in Sections 1 and 2 hereof.

(b) Binding Upon Successors, Etc. This Agreement shall bind and inure to the benefit of and be enforceable by Seller and Depositor, and the respective successors and assigns thereof. The parties hereto acknowledge that Depositor is acquiring the Mortgage Loans for the purpose of selling, transferring, assigning, setting over and otherwise conveying them to the Trustee, pursuant to the Pooling and Servicing Agreement. Seller acknowledges and consents to the assignment to the Trustee by Depositor of all of Depositor's rights against Seller hereunder in respect of the Mortgage Loans sold to Depositor and that the enforcement or exercise of any right or remedy against Seller hereunder by the Trustee or to the extent permitted under Section 2.04 of the Pooling and Servicing Agreement shall have the same force and effect as if enforced and exercised by Depositor directly.

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(c) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(d) Governing Law. This Agreement and all questions relating to its validity, interpretation, performance and enforcement shall be governed by and construed, interpreted and enforced in accordance with the laws of the State of New York notwithstanding any law, rule, regulation, or other conflict-of-law provisions to the contrary.

(e) Headings. The headings of the several parts of this Agreement are inserted for convenience of reference and are not intended to be a part of or affect the meaning or interpretation of this Agreement.

(f) Definitions. Capitalized terms not otherwise defined herein have the meanings ascribed to such terms in the Pooling and Servicing Agreement as in effect on the date of execution hereof.

(g) Nonpetition Covenant. Until one year plus one day shall have elapsed since the termination of the Pooling and Servicing Agreement in accordance with its terms, Seller shall not petition or otherwise invoke the process of any court or government authority for the purpose of commencing or sustaining a case against Depositor under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of Depositor.

[remainder of page intentionally left blank]

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IN WITNESS WHEREOF, each party has caused this Mortgage Loan Purchase and Sale Agreement to be executed by its duly authorized officer or officers as of the day and year first above written.

[SELLER]

By:

Name:

Title:

[DEPOSITOR]

By:

Name:

Title:

SCHEDULE A

MORTGAGE LOAN SCHEDULE

CORRESP

March 1, 2012       Phillip R. Pollock 415.772.9679 direct ppollock@weintraub.com

Jay Knight, Esq.

Special Counsel

Division of Corporation Finance

Office of Structured Finance

Securities and Exchange Commission

Washington, DC 20549

Re:	Sequoia Mortgage Funding Corporation/Sequoia Residential Funding, Inc.
	Registration Statement on Form S-3
	Filed February 1, 2012
	File Nos.  333-179292 and 333-179292-01

Dear Mr. Knight:

On behalf of Sequoia Mortgage Funding Corporation and Sequoia Residential Funding, Inc. (the “Registrants” or the “Depositors”), we are filing pursuant to the Securities Act of 1933, as amended, with the Securities and Exchange Commission via EDGAR Amendment No. 1 to the above-referenced Registration Statement on Form S-3 filed February 1, 2012.

Set forth below are our responses to the Staff’s comment letter dated February 22, 2012. For your convenience, each response is preceded by a boldface recitation of the comment letter’s numbered paragraph.

Prospectus Supplement, page S-i

1. We note your statement that “[you] do not claim that the information in this prospectus supplement and prospectus is accurate as of any date other than the dates stated on their respective covers.” This statement is inappropriate given your Item 512(a) undertakings. Revise to delete the noted language throughout your prospectuses or advise as appropriate.

Response: We have revised the registration statement by deleting the above-referenced statement from page S-i and the back cover of each of the two Forms of Prospectus Supplement.

Jay Knight, Esq.

Securities and Exchange Commission

March 1, 2012

Page 2

Base Prospectus

Derivatives, page 53

2. We note that you might have mandatory auctions of your securities. Please confirm that such auctions will not be controlled by affiliates of the registrant, as such involvement could be viewed as a primary offering by or on behalf of the issuer. Also, include language setting forth more specifically how such auctions might work.

Response: Registrants will not be conducting mandatory auctions of the securities. We have revised the registration statement to delete the paragraph on page 53 that refers to such mandatory auctions of securities.

Available Information, page 119

3. In the first line of this section, please revise to update the registration statement file number.

Response: We have revised the registration statement to update it with the assigned registration statement file number. 

If you have any questions or would like further information, please do not hesitate to contact me at (415) 772-9679 or my colleague Stacy K. Stecher at (415) 772-9642.

Very truly yours,

weintraub genshlea chediak

tobin & tobin

LAW CORPORATION

/s/ Phillip R. Pollock

Phillip R. Pollock

PRP/sks

cc:	Rolaine S. Bancroft, Esq.
		Senior Special Counsel – Office of Structured Finance
	Mr. Andrew Stone, Sequoia Residential Funding, Inc.