MORTGAGE LOAN PURCHASE AGREEMENT

This is a Mortgage Loan Purchase Agreement (this “Agreement”), dated October 30, 2006, between DB Structured Products, Inc., a Delaware corporation (the “Seller”) and ACE Securities Corp., a Delaware corporation (the “Purchaser”).

Preliminary Statement

The Seller intends to sell the Mortgage Loans (as hereinafter identified) and the Cap Agreements (as defined herein) to the Purchaser on the terms and subject to the conditions set forth in this Agreement. The Purchaser intends to deposit the Mortgage Loans into a mortgage pool comprising the Trust Fund. The Trust Fund will be evidenced by a single series of mortgage pass-through certificates designated as ACE Securities Corp. Home Equity Loan Trust, Series 2006-FM2, Asset Backed Pass-Through Certificates (the “Certificates”). The Certificates will consist of eighteen classes of certificates. The Certificates will be issued pursuant to a Pooling and Servicing Agreement for ACE Securities Corp. Home Equity Loan Trust, Series 2006-FM2 Asset Backed Pass-Through Certificates, dated as of October 1, 2006 (the “Pooling and Servicing Agreement”), among the Purchaser as depositor, Wells Fargo Bank, National Association as master servicer (the “Master Servicer”) and securities administrator (the “Securities Administrator”), HSBC Bank USA, National Association as trustee (the “Trustee”) and Countrywide Home Loans Servicing LP (the “Servicer”). The Purchaser will sell the Class A-1 Certificates (the “Class A-1 Certificates”), Class A-2A, Class A-2B, Class A-2C and Class A-2D Certificates (collectively, the “Class A-2 Certificates”; together with the Class A-1 Certificates, the “Class A Certificates”), the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9 Certificates (collectively, the “Public Mezzanine Certificates”) to Deutsche Bank Securities Inc. (“DBSI”), pursuant to the Second Amended and Restated Underwriting Agreement, dated as of June 24, 1999, as amended and restated to and including January 25, 2006, between the Purchaser and DBSI, and the Terms Agreement, dated October 26, 2006 (collectively, the “Underwriting Agreement”), between the Purchaser and DBSI. The Purchaser will sell the Class M-10 Certificates (the “Class M-10 Certificates’; together with the Public Mezzanine Certificates, the “Mezzanine Certificates”) to DBSI pursuant to the Purchase Agreement dated as of October 26, 2006 between the Purchaser and DBSI. Capitalized terms used but not defined herein shall have the meanings set forth in the Pooling and Servicing Agreement.

The parties hereto agree as follows:

SECTION 1. Agreement to Purchase. The Seller hereby sells, and the Purchaser hereby purchases, on October 30, 2006 (the “Closing Date”), certain conventional, one- to four-family, fixed-rate and adjustable-rate, residential, first and second lien, residential mortgage loans (the “Mortgage Loans”), having an aggregate principal balance as of the close of business on October 1, 2006 (the “Cut-off Date”) of approximately $877,568,720 (the “Closing Balance”), after giving effect to all payments due on the Mortgage Loans on or before the Cut-off Date, whether or not received, including the right to any Prepayment Charges payable by the related Mortgagors in connection with any Principal Prepayments on the Mortgage Loans, but excluding the rights to the servicing of the Mortgage Loans, which are owned by Countrywide Home Loans Servicing LP (the “Servicing Rights”) and (b) all of the Seller’s right, title and interest in and to (i) the Cap Agreement between The Royal Bank of Scotland plc and the Trustee, as trustee of ACE Securities Corp. Home Equity Loan Trust, Series 2006-FM2 Asset Backed Pass-Through Certificates dated as of October 30, 2006 (the “Group I Cap Agreement”), relating to the Class A-1 Certificates and the Mezzanine Certificates and (ii) the Cap Agreement between The Royal Bank of Scotland plc and the Trustee, as trustee of ACE Securities Corp. Home Equity Loan Trust, Series 2006-FM2 Asset Backed Pass-Through Certificates, dated as of October 30, 2006 (the “Group II Cap Agreement”; together with the Group I Cap Agreement, the “Cap Agreements”) relating to the Class A-2 Certificates and the Mezzanine Certificates.

SECTION 2. Mortgage Loan Schedule. The Purchaser and the Seller have agreed upon which of the mortgage loans owned by the Seller are to be purchased by the Purchaser pursuant to this Agreement and the Seller will prepare or cause to be prepared on or prior to the Closing Date a final schedule (the “Closing Schedule”) that shall describe such Mortgage Loans and set forth all of the Mortgage Loans to be purchased under this Agreement, including the Prepayment Charges. The Closing Schedule will conform to the requirements set forth in this Agreement and to the definition of “Mortgage Loan Schedule” under the Pooling and Servicing Agreement.

SECTION 3. Consideration.

(a) In consideration for the Mortgage Loans and the Cap Agreements to be purchased hereunder, the Purchaser shall, as described in Section 8, (i) pay to or upon the order of the Seller in immediately available funds an amount (the “Purchase Price”) equal to (i) $________*¹ and (ii) a 100% interest in the Class CE, Class P and Class R Certificates (collectively the “DB Certificates”). The DB Certificates shall be registered in the name of “Deutsche Bank Securities Inc.”

(b) The Purchaser or any assignee, transferee or designee of the Purchaser shall be entitled to all scheduled payments of principal due after the Cut-off Date, all other payments of principal due and collected after the Cut-off Date, and all payments of interest on the Mortgage Loans allocable to the period after the Cut-off Date. All scheduled payments of principal and interest due on or before the Cut-off Date and collected after the Cut-off Date shall belong to the Seller.

(c) Pursuant to the Pooling and Servicing Agreement, the Purchaser will assign all of its right, title and interest in and to the Mortgage Loans and the Cap Agreements, together with its rights under this Agreement, to the Trustee for the benefit of the Certificateholders.

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* Please contact the Mortgage Loan Seller for this information.

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SECTION 4. Transfer of the Mortgage Loans.

(a) Possession of Mortgage Files. The Seller does hereby sell to the Purchaser, without recourse but subject to the terms of this Agreement, all of its right, title and interest in, to and under the Mortgage Loans, including the related Prepayment Charges and the Cap Agreements, but excluding the Servicing Rights. The contents of each Mortgage File not delivered to the Purchaser or to any assignee, transferee or designee of the Purchaser on or prior to the Closing Date are and shall be held in trust by the Seller for the benefit of the Purchaser or any assignee, transferee or designee of the Purchaser. Upon the sale of the Mortgage Loans, the ownership of each Mortgage Note, the related Mortgage and the other contents of the related Mortgage File is vested in the Purchaser and the ownership of all records and documents with respect to the related Mortgage Loan prepared by or that come into the possession of the Seller on or after the Closing Date shall immediately vest in the Purchaser and shall be delivered immediately to the Purchaser or as otherwise directed by the Purchaser.

(b) Delivery of Mortgage Loan Documents. The Seller will, on or prior to the Closing Date, deliver or cause to be delivered to the Purchaser or any assignee, transferee or designee of the Purchaser each of the following documents for each Mortgage Loan:

(i) the original Mortgage Note, including any riders thereto, endorsed in blank, with all prior and intervening endorsements showing a complete chain of endorsement from the originator to the Person so endorsing to the Trustee;

(ii) the original Mortgage or a certified copy thereof, including any riders thereto, with evidence of recording thereon, and the original recorded power of attorney, if the Mortgage was executed pursuant to a power of attorney, with evidence of recording thereon, and in the case of each MOM Loan, the original Mortgage, noting the presence of the MIN of the Loan and either language indicating that the Mortgage Loan is a MOM Loan or if the Mortgage Loan was not a MOM Loan at origination, the original Mortgage and the assignment thereof to MERS®, with evidence of recording indicated thereon;

(iii) unless such Mortgage Loan is registered on the MERS System, an original Assignment of Mortgage executed in blank;

(iv) unless such Mortgage Loan is a MOM Loan, the original recorded Assignment or Assignments of the Mortgage, or a certified copy or copies thereof, showing a complete chain of assignment from the originator to the last Person assigning the Mortgage;

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

(vi) the original lender’s title insurance policy, together with all endorsements or riders that were issued with or subsequent to the issuance of such policy, insuring the priority of the Mortgage as a first lien or second lien on the Mortgaged Property represented therein as a fee interest vested in the Mortgagor;

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(vii) the original of any guarantee executed in connection with the Mortgage Note, if any; and

(viii) the original of any security agreement, chattel mortgage or equivalent document executed in connection with the Mortgage, if any.

Notwithstanding anything to the contrary contained in this Section 4, with respect to a maximum of approximately 1.00% of the Mortgage Loans, by aggregate principal balance of the Mortgage Loans as of the Cut-off Date, if any original Mortgage Note referred to in Section 4(b)(i) above cannot be located, the obligations of the Seller to deliver such documents shall be deemed to be satisfied upon delivery to the Purchaser or any assignee, transferee or designee of the Purchaser of a photocopy of such Mortgage Note, if available, with a lost note affidavit substantially in the form of Exhibit 1 attached hereto. If any of the original Mortgage Notes for which a lost note affidavit was delivered to the Purchaser or any assignee, transferee or designee of the Purchaser is subsequently located, such original Mortgage Note shall be delivered to the Purchaser or any assignee, transferee or designee of the Purchaser within three (3) Business Days; and if any document referred to in Section 4(b)(ii) or 4(b)(iv) above has been submitted for recording but either (x) has not been returned from the applicable public recording office or (y) has been lost or such public recording office has retained the original of such document, the obligations of the Seller hereunder shall be deemed to have been satisfied upon delivery to the Purchaser or any assignee, transferee or designee of the Purchaser promptly upon receipt thereof by or on behalf of the Seller of either the original or a copy of such document certified by the applicable public recording office to be a true and complete copy of the original.

In the event that the original lender’s title insurance policy has not yet been issued, the Seller shall deliver to the Purchaser or any assignee, transferee or designee of the Purchaser a written commitment or interim binder or preliminary report of title issued by the title insurance or escrow company. The Seller shall deliver such original title insurance policy to the Purchaser or any assignee, transferee or designee of the Purchaser promptly upon receipt by the Seller, if any.

Each original document relating to a Mortgage Loan which is not delivered to the Purchaser or its assignee, transferee or designee, if held by the Seller, shall be so held for the benefit of the Purchaser, its assignee, transferee or designee.

In connection with the assignment of any Mortgage Loan registered on the MERS® System, the Seller further agrees that it will cause, at the Seller’s own expense, within 30 days after the Closing Date, the MERS® System to indicate that such Mortgage Loans have been assigned by the Seller to the Purchaser and by the Purchaser to the Trustee in accordance with this Agreement for the benefit of the Certificateholders by including (or deleting, in the case of Mortgage Loans which are repurchased in accordance with this Agreement) in such computer files (a) the code in the field which identifies the specific Trustee and (b) the code in the field “Pool Field” which identifies the series of the Certificates issued in connection with such Mortgage Loans. The Seller further agrees that it will not, and will not permit the Servicer or the Master Servicer to alter the codes referenced in this paragraph with respect to any Mortgage Loan during the term of this Agreement unless and until such Mortgage Loan is repurchased in accordance with the terms of this Agreement or the Pooling and Servicing Agreement.

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(c) Acceptance of Mortgage Loans. The documents delivered pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or any assignee, transferee or designee of the Purchaser at any time before or after the Closing Date (and with respect to each document permitted to be delivered after the Closing Date, within seven days of its delivery) to ascertain that all required documents have been executed and received and that such documents relate to the Mortgage Loans identified on the Closing Schedule.

(d) Transfer of Interest in Agreements. The Purchaser has the right to assign its interest under this Agreement, in whole or in part, to the Trustee, as may be required to effect the purposes of the Pooling and Servicing Agreement, without the consent of the Seller, and the assignee shall succeed to the rights and obligations hereunder of the Purchaser. Any expense reasonably incurred by or on behalf of the Purchaser or the Trustee in connection with enforcing any obligations of the Seller under this Agreement will be promptly reimbursed by the Seller.

(e) Examination of Mortgage Files. Prior to the Closing Date, the Seller shall either (i) deliver in escrow to the Purchaser or to any assignee, transferee or designee of the Purchaser for examination the Mortgage File pertaining to each Mortgage Loan, or (ii) make such Mortgage Files available to the Purchaser or to any assignee, transferee or designee of the Purchaser for examination. Such examination may be made by the Purchaser or the Trustee, and their respective designees, upon reasonable notice to the Seller during normal business hours before the Closing Date and within sixty (60) days after the Closing Date. If any such person makes such examination prior to the Closing Date and identifies any Mortgage Loans that do not conform to the requirements of the Purchaser as described in this Agreement, such Mortgage Loans shall be deleted from the Closing Schedule. The Purchaser may, at its option and without notice to the Seller, purchase all or part of the Mortgage Loans without conducting any partial or complete examination. The fact that the Purchaser or any person has conducted or has failed to conduct any partial or complete examination of the Mortgage Files shall not affect the rights of the Purchaser or any assignee, transferee or designee of the Purchaser to demand repurchase or other relief as provided herein or under the Pooling and Servicing Agreement.

SECTION 5. Representations, Warranties and Covenants of the Seller.

The Seller hereby represents and warrants to the Purchaser, as of the date hereof and as of the Closing Date, and covenants, that:

(i) The Seller is a Delaware corporation with full corporate power and authority to conduct its business as presently conducted by it to the extent material to the consummation of the transactions contemplated herein. The Agreement has been duly authorized, executed and delivered by the Seller. The Seller had the full corporate power and authority to own the Mortgage Loans and to transfer and convey the Mortgage Loans to the Purchaser and has the full corporate power and authority to execute and deliver, engage in the transactions contemplated by, and perform and observe the terms and conditions of this Agreement;

(ii) The Seller has duly authorized the execution, delivery and performance of this Agreement, has duly executed and delivered this Agreement, and this Agreement, assuming due authorization, execution and delivery by the Purchaser, constitutes a legal, valid and binding obligation of the Seller, enforceable against it in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency or reorganization or by general principles of equity;

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(iii) The execution, delivery and performance of this Agreement by the Seller (x) does not conflict and will not conflict with, does not breach and will not result in a breach of and does not constitute and will not constitute a default (or an event, which with notice or lapse of time or both, would constitute a default) under (A) any terms or provisions of the organizational documents of the Seller, (B) any term or provision of any material agreement, contract, instrument or indenture, to which the Seller is a party or by which the Seller or any of its property is bound, or (C) any law, rule, regulation, order, judgment, writ, injunction or decree of any court or governmental authority having jurisdiction over the Seller or any of its property and (y) does not create or impose and will not result in the creation or imposition of any lien, charge or encumbrance (other than any created hereby in favor of the Purchaser and its assignees) which would have a material adverse effect upon the Mortgage Loans or any documents or instruments evidencing or securing the Mortgage Loans;

(iv) No consent, approval, authorization or order of, registration or filing with, or notice on behalf of the Seller to any governmental authority or court is required, under federal laws or the laws of the State of New York, for the execution, delivery and performance by the Seller of, or compliance by the Seller with, this Agreement or the consummation by the Seller of any other transaction contemplated hereby and by the Pooling and Servicing Agreement; provided, however, that the Seller makes no representation or warranty regarding federal or state securities laws in connection with the sale or distribution of the Certificates;

(v) The Seller is not in violation of, and the execution and delivery of this Agreement by the Seller and its performance and compliance with the terms of this Agreement will not constitute a violation with respect to, any order or decree of any court or any order or regulation of any federal, state, municipal or governmental agency having jurisdiction over the Seller or its assets, which violation might have consequences that would materially and adversely affect the condition (financial or otherwise) or the operation of the Seller or its assets or might have consequences that would materially and adversely affect the performance of its obligations and duties hereunder;

(vi) The Seller does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement;

(vii) Immediately prior to the sale of the Mortgage Loans to the Purchaser as herein contemplated, the Seller was the owner of the related Mortgage and the indebtedness evidenced by the related Mortgage Note, and, upon the payment to the Seller of the Purchase Price, in the event that the Seller retains or has retained record title, the Seller shall retain such record title to each Mortgage, each related Mortgage Note and the related Mortgage Files with respect thereto in trust for the Purchaser as the owner thereof from and after the date hereof;

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(viii) There are no actions or proceedings against, or investigations known to it of, the Seller before any court, administrative or other tribunal (A) that might prohibit its entering into this Agreement, (B) seeking to prevent the sale of the Mortgage Loans by the Seller or the consummation of the transactions contemplated by this Agreement or (C) that might prohibit or materially and adversely affect the performance by the Seller of its obligations under, or validity or enforceability of, this Agreement;

(ix) The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Seller, and the transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are not subject to the bulk transfer or any similar statutory provisions in effect in any relevant jurisdiction, except any as may have been complied with;

(x) The Seller has not dealt with any broker, investment banker, agent or other person, except for the Purchaser or any of its affiliates, that may be entitled to any commission or compensation in connection with the sale of the Mortgage Loans (except that an entity that previously financed the Seller’s ownership of the Mortgage Loans may be entitled to a fee to release its security interest in the Mortgage Loans, which fee shall have been paid and which security interest shall have been released on or prior to the Closing Date);

(xi) There is no litigation currently pending or, to the best of the Seller’s knowledge without independent investigation, threatened against the Seller that would reasonably be expected to adversely affect the transfer of the Mortgage Loans, the issuance of the Certificates or the execution, delivery, performance or enforceability of this Agreement, or that would result in a material adverse change in the financial condition of the Seller; and

(xii) The information set forth in the applicable part of the Closing Schedule relating to the existence of a Prepayment Charge is complete, true and correct in all material respects at the date or dates respecting which such information is furnished and each Prepayment Charge is permissible and enforceable in accordance with its terms upon the mortgagor’s full and voluntary principal prepayment under applicable law, except to the extent that: (1) the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights; (2) the collectability thereof may be limited due to acceleration in connection with a foreclosure or other involuntary prepayment; or (3) subsequent changes in applicable law may limit or prohibit enforceability thereof under applicable law.

SECTION 6. Representations and Warranties of the Seller Relating to the Mortgage Loans.

The Seller hereby represents and warrants to the Purchaser that as to each Mortgage Loan as of the Closing Date:

(i) Information provided to the Rating Agencies, including the loan level detail, is true and correct according to the Rating Agency requirements;

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(ii) No error, omission, misrepresentation, fraud or similar occurrence with respect to a Mortgage Loan has taken place on the part of any person involved in the origination of the Mortgage Loan, including without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Mortgage Loan or in the application of any insurance in relation to such Mortgage Loan;

(iii) Except as set forth on the Closing Schedule, all payments required to be made prior to the Cut-off Date with respect to each Mortgage Loan have been made;

(iv) [Reserved];

(v) There are no delinquent taxes, assessment liens or insurance premiums affecting the related Mortgaged Property;

(vi) The terms of the Mortgage Note and the Mortgage have not been materially impaired, waived, altered or modified in any respect, except by written instruments, recorded in the applicable public recording office if necessary to maintain the lien priority of the Mortgage. The substance of any such waiver, alteration or modification has been approved by the title insurer, to the extent required by the related policy. No Mortgagor has been released, in whole or in part, except in connection with an assumption agreement (approved by the title insurer to the extent required by the policy) and which assumption agreement has been delivered to the Trustee;

(vii) The Mortgaged Property is insured against loss by fire and hazards of extended coverage (excluding earthquake insurance) in an amount which is at least equal to the lesser of (i) the amount necessary to compensate for any damage or loss to the improvements which are a part of such property on a replacement cost basis or (ii) the outstanding principal balance of the Mortgage Loan. If the Mortgaged Property is in an area identified on a flood hazard map or flood insurance rate map issued by the Federal Emergency Management Agency as having special flood hazards (and such flood insurance has been made available), a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration is in effect. All such insurance policies contain a standard mortgagee clause naming the originator of the Mortgage Loan, its successors and assigns as mortgagee and the Seller has not engaged in any act or omission which would impair the coverage of any such insurance policies. Except as may be limited by applicable law, the Mortgage obligates the Mortgagor thereunder to maintain all such insurance at the Mortgagor’s cost and expense, and on the Mortgagor’s failure to do so, authorizes the holder of the Mortgage to maintain such insurance at Mortgagor’s cost and expense and to seek reimbursement therefor from the Mortgagor;

(viii) Each Mortgage Loan and the related Prepayment Charge, if any, complied in all material respects with any and all requirements of any federal, state or local law including, without limitation, usury, truth in lending, anti-predatory lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, fair housing or disclosure laws applicable to the origination and servicing of the Mortgage Loans and the consummation of the transactions contemplated hereby will not involve the violation of any such laws;

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(ix) The Mortgage has not been satisfied, cancelled, subordinated (other than with respect to second lien Mortgage Loans, the subordination to the first lien) or rescinded, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such satisfaction, cancellation, subordination, rescission or release;

(x) The Mortgage Note and the related Mortgage are genuine and each is the legal, valid and binding obligation of the maker thereof, insured under the related title policy, and enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by a bankruptcy, insolvency or reorganization;

(xi) 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, subject to bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally;

(xii) The Seller is the sole legal, beneficial and equitable owner of the Mortgage Note and the Mortgage and has the full right to convey, transfer and sell the Mortgage Loan to the Purchaser free and clear of any encumbrance, equity, lien (other than with respect to second lien Mortgage Loans, the subordination to the related first lien), pledge, charge, claim or security interest and immediately upon the sale, assignment and endorsement of the Mortgage Loans from the Seller to the Purchaser, the Purchaser shall have good and indefeasible title to and be the sole legal owner of the Mortgage Loans subject only to any encumbrance, equity, lien, pledge, charge, claim or security interest arising out of the Purchaser’s actions;

(xiii) Unless the Mortgaged Property is located in the State of Iowa and an attorney’s certificate and/or a certificate of title guaranty has been obtained, each Mortgage Loan is covered by a valid and binding American Land Title Association lender’s title insurance policy issued by a title insurer qualified to do business in the jurisdiction where the Mortgaged Property is located. No claims have been filed under such lender’s title insurance policy, and the Seller has not done, by act or omission, anything that would impair the coverage of the lender’s title insurance policy;

(xiv) There is no material default, breach, violation event 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 material default, breach, violation or event of acceleration, and the Seller has not, nor has its predecessors, waived any material default, breach, violation or event of acceleration;

(xv) There are no mechanics’ or similar liens or claims which have been filed for work, labor or material provided to the related Mortgaged Property prior to the origination of the Mortgage Loan which are or may be liens prior to, or equal or coordinate with, the lien of the related Mortgage, except as may be disclosed in the related title policy;

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(xvi) Except with respect to approximately 8.30% of the Group I Mortgage Loans and 17.48% of the Group II Mortgage Loans by aggregate principal balance as of the Cut-off Date, which are interest-only loans and approximately 34.93% of the Group I Mortgage Loans and 40.03% of the Group II Mortgage Loans by aggregate principal balance as of the Cut-off Date, which are balloon loans, each Mortgage Note is payable on the first day of each month in equal monthly installments of principal and interest (subject to adjustment in the case of the adjustable rate Mortgage Loans), with interest calculated on a 30/360 basis and payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity date over an original term from commencement of amortization to not more than 30 years and no Mortgage Loan permits negative amortization;

(xvii) The servicing practices used in connection with the servicing of the Mortgage Loans have been in all respects reasonable and customary in the mortgage servicing industry of like mortgage loan servicers, servicing similar subprime mortgage loans originated in the same jurisdiction as the Mortgaged Property;

(xviii) At the time of origination of the Mortgage Loan there was no proceeding pending for the total or partial condemnation of the Mortgaged Property and, as of the date such Mortgage Loan was purchased by the Purchaser, to the best of the Purchaser’s knowledge there is no proceeding pending for the total or partial condemnation of the Mortgaged Property;

(xix) The Mortgage and related Mortgage Note contain customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including, (a) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (b) otherwise by judicial foreclosure;

(xx) The Mortgage Note is not and has not been secured by any collateral except the lien of the related Mortgage referred to in subsection (x) above;

(xxi) In the event the Mortgage constitutes a deed of trust, a trustee, duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by the Seller to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor;

(xxii) The Mortgage Note and the Mortgage are not subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, nor will the operation of any of the terms of the Mortgage Note and/or the Mortgage, or the exercise of any right thereunder, render the Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto, subject to bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally;

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(xxiii) The Mortgage Loans were underwritten in accordance with the originator’s underwriting guidelines in effect at the time the Mortgage Loans were originated (the “Applicable Underwriting Guidelines”), except with respect to certain of those Mortgage Loans which had compensating factors permitting a deviation from the Applicable Underwriting Guidelines;

(xxiv) The Mortgaged Property is free of material damage and waste, excepting therefrom any Mortgage Loan subject to an escrow withhold as shown on the Closing Schedule;

(xxv) All of the improvements which were included in determining the appraised value of the Mortgaged Property lie wholly within the Mortgaged Property’s boundary lines and no improvements on adjoining properties encroach upon the Mortgaged Property, excepting therefrom: (i) any encroachment insured against in the lender’s title insurance policy identified in subsection (xiii), (ii) any encroachment generally acceptable to subprime mortgage loan originators doing business in the same jurisdiction as the Mortgaged Property, and (iii) any encroachment which does not materially interfere with the benefits of the security intended to be provided by such Mortgage;

(xxvi) All parties to the Mortgage Note had the legal capacity to execute the Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have been duly executed by such parties;

(xxvii) To the best of the Seller’s knowledge, at the time of origination of the Mortgage Loan, no appraised improvement located on or being part of the Mortgaged Property was in violation of any applicable zoning law or regulation and all inspections, licenses and certificates required in connection with the origination of any Mortgage Loan with respect to the occupancy of the Mortgaged Property, have been made or obtained from the appropriate authorities;

(xxviii) No Mortgagor has notified the Seller of any relief requested or allowed under the Servicemembers Civil Relief Act;

(xxix) All parties which have held an interest in the Mortgage Loan are (or during the period in which they held and disposed of such interest, were) (1) in compliance with any and all applicable licensing requirements of the state wherein the Mortgaged Property is located, (2) organized under the laws of such state, (3) qualified to do business in such state, (4) a federal savings and loan association or national bank, (5) not doing business in such state, or (6) exempt from the applicable licensing requirements of such state;

(xxx) The Mortgage File contains an appraisal of the related Mortgaged Property which was made prior to the approval of the Mortgage Loan by a qualified appraiser, duly appointed by the related originator and was made in accordance with the Financial Institutions Reform, Recovery, and Enforcement Act of 1989;

(xxxi) Except as may otherwise be limited by applicable law, the Mortgage contains a provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Loan in the event that the Mortgaged Property is sold or transferred without the prior written consent of the Mortgagee thereunder;

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(xxxii) The Mortgage Loan does not contain any provision which would constitute a “buydown” provision and pursuant to which Monthly Payments are paid or partially paid with funds deposited in a separate account established by the related originator, the Mortgagor or anyone on behalf of the Mortgagor, or paid by any source other than the Mortgagor. The Mortgage Loan is not a “graduated payment mortgage loan” and the Mortgage loan does not have a shared appreciation or other contingent interest feature;

(xxxiii) To the best of the Seller’s knowledge there is no action or proceeding directly involving the Mortgaged Property presently pending in which compliance with any environmental law, rule or regulation is at issue and the Seller has received no notice of any condition at the Mortgaged Property which is reasonably likely to give rise to an action or proceeding in which compliance with any environmental law, rule or regulation is at issue;

(xxxiv) Each Mortgage Loan is an obligation which is principally secured by an interest in real property within the meaning of Treasury Regulation section 1.860G-2(a);

(xxxv) Each Mortgage Loan (a) is directly secured by a first or second lien on, and consists of a single parcel of, real property with a detached one-to-four family residence erected thereon or an individual condominium unit in a condominium project. Any unit in a condominium project conforms to the requirements of the Applicable Underwriting Guidelines regarding such dwellings. No residence or dwelling is a mobile home or a manufactured dwelling unless it is a manufactured dwelling, which is permanently affixed to a foundation and treated as “real estate” under applicable law. No Mortgaged Property is used for commercial purposes. Mortgaged Properties which contain a home office shall not be considered as being used for commercial purposes as long as the Mortgaged Property has not been altered for commercial purposes and is not storing any chemicals or raw materials other than those commonly used for homeowner repair, maintenance and/or household purposes;

(xxxvi) The Mortgage Interest Rate with respect to the Adjustable Rate Mortgage Loans is subject to adjustment at the time and in the amounts as are set forth in the related Mortgage Note;

(xxxvii) No Mortgage Loan contains a provision whereby the Mortgagor can convert an Adjustable Rate Mortgage Loan into a Fixed Rate Mortgage Loan;

(xxxviii) With respect to each Group I Mortgage Loan, no Mortgagor obtained a prepaid single-premium credit-life, credit-disability, credit unemployment or credit property insurance policy in connection with the origination of such Group I Mortgage Loan;

(xxxix) With respect to each Group I Mortgage Loan that has a prepayment penalty feature, each such prepayment penalty is enforceable and will be enforced by the originator, as servicer of the Group I Mortgage Loan, for the benefit of the Purchaser, and each prepayment penalty is permitted pursuant to federal, state and local law. Each such prepayment penalty is in an amount equal to the maximum amount permitted under applicable law and no such prepayment penalty may be imposed for a term in excess of three (3) years. With respect to any Group I Mortgage Loan that contains a provision permitting imposition of a prepayment penalty upon a prepayment prior to maturity: (i) prior to the loan’s origination, the Mortgagor agreed to such prepayment penalty in exchange for a monetary benefit, including but not limited to a rate or fee reduction, (ii) originator has available programs that offered the option of obtaining a mortgage loan that did not require payment of such a prepayment penalty and prior to the Mortgage Loan’s origination, the Mortgage Loan was available to the Mortgagor with and without the prepayment penalty, (iii) the prepayment penalty was disclosed to the Mortgagor in the loan documents pursuant to applicable state and federal law, and (iv) notwithstanding the terms of the Group I Mortgage Loan or any state or federal law to the contrary, the servicer will not impose such prepayment penalty in any instance when the mortgage debt is accelerated as the result of the Mortgagor’s default in making the loan payments;

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(xl) No Mortgage Loan is (a) subject to, covered by or in violation of the provisions of the Home Ownership and Equity Protection Act of 1994, as amended (“HOEPA”), or has an “annual percentage rate” or “total points and fees” payable by the Mortgagor (as each such term is defined under HOEPA) that equal or exceed the applicable thresholds defined under HOEPA (Section 32 of Regulation Z, 12 C.F.R. Section 226.32(a)(1)(i) and (ii)), (b) a “high cost”, “covered” (except with respect to purchase money “covered loans” under the New Jersey Home Ownership Security Act of 2002), “abusive”, “predatory”, “home loan”, “Oklahoma Section 10” or “high risk” mortgage loan (or a similarly designated loan using different terminology) under any federal, state or local law, including without limitation, the provisions of the Georgia Fair Lending Act, New York Banking Law, Section 6-1, the Arkansas Home Loan Protection Act, effective as of June 14, 2003, Kentucky State Statute KRS 360.100, effective as of June 25, 2003, the New Jersey Home Ownership Security Act of 2002 (the “NJ Act”), the New Mexico Home Loan Protection Act (N.M. Stat. Ann. §§ 58-21A-1 et seq.), the Illinois High-Risk Home Loan Act (815 Ill. Comp. Stat. 137/1 et seq.), the Oklahoma Home Ownership and Equity Protection Act, Nevada Assembly Bill No. 284, effective as of Oct. 1, 2003, the Minnesota Residential Mortgage Originator and Servicer Licensing Act (MN Stat. §58.137), the South Carolina High-Cost and Consumer Home Loans Act, effective January 1, 2004, the Massachusetts Predatory Home Loan Practices Act, effective November 7, 2004 (Mass. Ann. Laws Ch. 183C) or any other statute or regulation providing assignee liability to holders of such mortgage loans, or (c) subject to or in violation of any such or comparable federal, state or local statutes or regulations;

(xli) No Mortgage Loan originated or modified on or after October 1, 2002 and prior to March 7, 2003 is secured by a Mortgaged Property located in the State of Georgia. There is no such Mortgage Loan underlying the Certificate that was originated on or after March 7, 2003, which is a “high cost home loan” as defined under the Georgia Fair Lending Act;

(xlii) [Reserved];

(xliii) [Reserved];

(xliv) There is no Mortgage Loan that (a) is secured by property located in the State of Kentucky; (b) was originated on or after June 24, 2003, and (c) which is a “high cost home loan” as defined under Kentucky State Statute KRS 360.100, effective as of June 24, 2003;

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(xlv) There is no Mortgage Loan that (a) is secured by property located in the State of Arkansas, (b) has a note date on or after July 16, 2003, and (c) which is a “high cost home loan” as defined under the Arkansas Home Loan Protection Act, effective as of July 16, 2003;

(xlvi) The Servicer for each Group I Mortgage Loan has fully furnished, and will fully furnish, in accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and complete information (i.e., favorable and unfavorable) on its Mortgagor credit files to Equifax, Experian, and Trans Union Credit Information Company (three of the credit repositories), on a monthly basis;

(xlvii) The original principal balance of each Group I Mortgage Loan which is secured by a first or second lien on the related Mortgaged Property is within Freddie Mac’s dollar amount limits for conforming one-to-four family mortgage loans;

(xlviii) No Mortgage Loan is a “High-Cost Home Loan” as defined in the New Jersey Home Ownership Act effective November 27, 2003 (N.J.S.A. 46:10B-22 et seq.);

(xlix) No Mortgage Loan is a “High-Cost Home Loan” as defined in the New Mexico Home Loan Protection Act effective January 1, 2004 (N.M. Stat. Ann. §§ 58-21A-1 et seq.);

(l) No Mortgage Loan is a “High-Risk Home Loan” as defined in the Illinois High-Risk Home Loan Act effective January 1, 2004 (815 Ill. Comp. Stat. 137/1 et seq.);

(li) [Reserved];

(lii) [Reserved];

(liii) No Mortgage Loan is a “High Cost” loan as defined under the New York Banking Law Section 6L, effective as of April 1, 2003;

(liv) No Mortgage Loan is a “home loan” in the state of Nevada;

(lv) No Mortgage Loan is a “Section 10 mortgage loan” as defined in Oklahoma House Bill 1574;

(lvi) With respect to any Group I Mortgage Loan originated on or after August 1, 2004, neither the related Mortgage nor the related Mortgage Note requires the Mortgagor to submit to arbitration to resolve any dispute arising out of or relating in any way to the Mortgage Loan transaction;

(lvii) No Mortgage Loan is a High Cost Loan or Covered Loan, as applicable (as such terms are defined in the then current Standard & Poor’s LEVELS^® Glossary which is now Version 5.7 Revised, Appendix E (attached hereto as Exhibit 2)) and no Mortgage Loan originated or modified on or after October 1, 2002 and prior to March 7, 2003 is secured by a Mortgaged Property located in the State of Georgia;

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(lviii) No Mortgage Loan is a “High-Cost Home Mortgage Loan” as defined in the Massachusetts Predatory Home Loan Practices Act, effective November 7, 2004 (Mass. Ann. Laws Ch. 183C);

(lix) [Reserved];

(lx) [Reserved];

(lxi) The methodology used in underwriting the extension of credit for each Group I Mortgage Loan employs objective mathematical principles which relate the Mortgagor’s income, assets and liabilities to the proposed payment and such underwriting methodology does not rely on the extent of the Mortgagor’s equity in the collateral as the principal determining factor in approving such credit extension. Such underwriting methodology confirmed that at the time of origination (application/approval) the Mortgagor had a reasonable ability to make timely payments on the Group I Mortgage Loan;

(lxii) [Reserved];

(lxiii) [Reserved];

(lxiv) With respect to any Group I Mortgage Loans that are manufactured housing, upon the origination of each such Group I Mortgage Loan the manufactured housing unit either: (i) will be the principal residence of the Mortgagor or (ii) will be classified as real property under applicable state law;

(lxv) [Reserved];

(lxvi) With respect to any Mortgage Loan that is secured by a second lien on the related Mortgaged Property, either (i) no consent for the Mortgage Loan is required by the holder of any related senior lien or (ii) such consent has been obtained and is contained in the Mortgage File;

(lxvii) Each Mortgagor of a Group I Mortgage Loan was assigned the highest credit grade available with respect to a mortgage loan product offered by such Group I Mortgage Loan’s originator, taking into account credit history, debt to income ratio and loan requirements of such Mortgagor of such Group I Mortgage Loan;

(lxviii) With respect to a Mortgage Loan which is a second lien, as of the date hereof, the Seller has not received a notice of default of a senior lien on the related Mortgaged Property which has not been cured;

(lxix) With respect to a Group I Mortgage Loan which is a second lien, (a) such second lien Group I Mortgage Loan is secured by a one- to four-family residence that is the principal residence of the Mortgagor, (b) the origination amount for such second lien Group I Mortgage Loan did not exceed one-half of the one-unit limitation set forth by Freddie Mac for first lien mortgage loans, without regard to the number of units, and (c) the aggregate original principal balance for the first lien and the second lien mortgage Loan do not exceed Freddie Mac’s applicable loan limits for first lien mortgage loans for properties of the same type as the related Mortgaged Property;

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(lxx) No Mortgagor under a Group I Mortgage Loan was charged “points and fees” in an amount greater than (a) $1,000 or (b) 5% of the principal amount of such Group I Mortgage Loan, whichever is greater. For purposes of this representation, “points and fees” (x) include origination, underwriting, broker and finder’s fees and charges that the lender imposed as a condition of making the mortgage loan, whether they are paid to the lender or a third party; and (y) exclude bona fide discount points, fees paid for actual services rendered in connection with the origination of the mortgage (such as attorneys’ fees, notaries fees and fees paid for property appraisals, credit reports, surveys, title examinations and extracts, flood and tax certifications, and home inspections); the cost of mortgage insurance or credit-risk price adjustments; the costs of title, hazard, and flood insurance policies; state and local transfer taxes or fees; escrow deposits for the future payment of taxes and insurance premiums; and other miscellaneous fees and charges, which miscellaneous fee and charges, in total, do not exceed 0.25 percent of the loan amount;

(lxxi) No selection procedures were used by the Seller that identified the Mortgage Loans as being less desirable or valuable than other comparable mortgage loans in the Seller’s portfolio;

(lxxii) The information set forth in the Closing Schedule is true and correct in all material respects as of the Cut-off Date;

(lxxiii) No Mortgage Loan is secured in whole or in part by the interest of the Mortgagor as a lessee under a ground lease of the related Mortgaged Property; and

(lxxiv) With respect to each first lien Mortgage Loan, the related Mortgage File contains an appraisal on Form 1004 or 2055, and with respect to each second lien Mortgage Loan, the related Mortgage File contains an appraisal on form 704, 2065 or 2055 with an exterior only inspection.

SECTION 7. Repurchase Obligation for Defective Documentation and for Breach of Representation and Warranty.

(a) The representations and warranties contained in Section 6 shall not be impaired by any review and examination of loan files or other documents evidencing or relating to the Mortgage Loans or any failure on the part of the Seller or the Purchaser to review or examine such documents and shall inure to the benefit of any assignee, transferee or designee of the Purchaser, including the Trustee for the benefit of the Certificateholders. With respect to the representations and warranties contained herein as to which the Seller has no knowledge, if it is discovered that the substance of any such representation and warranty was inaccurate as of the date such representation and warranty was made or deemed to be made, and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interest therein of the Purchaser or the Purchaser’s assignee, transferee or designee, then notwithstanding the lack of knowledge by the Seller with respect to the substance of such representation and warranty being inaccurate at the time the representation and warranty was made, the Seller shall take such action described in the following paragraph in respect of such Mortgage Loan. Notwithstanding anything to the contrary contained herein, any breach of a representation or warranty contained in clauses (viii), (xxxviii), (xxxix), (xl), (xli), (xlvi), (xlvii), (lvi), \ (lxi), (lxiv), (lxvii), (lxix) and/or (lxx) of Section 6 above, shall be automatically deemed to affect materially and adversely the interests of the Purchaser or the Purchaser’s assignee, transferee or designee.

F-16

Upon discovery by the Seller, the Purchaser or any assignee, transferee or designee of the Purchaser of any materially defective document in, or that any material document was not transferred by the Seller, as listed on a Custodian’s preliminary exception report, as described in the Custodial Agreement, as part of any Mortgage File, or of a breach of any of the representations and warranties contained in Section 6 that materially and adversely affects the value of any Mortgage Loan or the interest therein of the Purchaser or the Purchaser’s assignee, transferee or designee, the party discovering such breach shall give prompt written notice to the Seller. Within sixty (60) days of its discovery or its receipt of notice of any such missing documentation that was not transferred by the Seller as described above, or of materially defective documentation, or any such breach of a representation and warranty, the Seller promptly shall deliver such missing document or cure such defect or breach in all material respects or, in the event the Seller cannot deliver such missing document or cannot cure such defect or breach, the Seller shall, within ninety (90) days of its discovery or receipt of notice of any such missing or materially defective documentation or of any such breach of a representation and warranty, either (i) repurchase the affected Mortgage Loan at the Purchase Price (as such term is defined in the Pooling and Servicing Agreement) or (ii) pursuant to the provisions of the Pooling and Servicing Agreement, cause the removal of such Mortgage Loan from the Trust Fund and substitute one or more Qualified Substitute Mortgage Loans. The Seller shall amend the Closing Schedule to reflect the withdrawal of such Mortgage Loan from the terms of this Agreement and the Pooling and Servicing Agreement. The Seller shall deliver to the Purchaser such amended Closing Schedule and shall deliver such other documents as are required by this Agreement or the Pooling and Servicing Agreement within five (5) days of any such amendment. Any repurchase pursuant to this Section 7(a) shall be accomplished by transfer to an account designated by the Purchaser of the amount of the Purchase Price in accordance with Section 2.03 of the Pooling and Servicing Agreement. Any repurchase required by this Section shall be made in a manner consistent with Section 2.03 of the Pooling and Servicing Agreement.

(b) If the representation made by the Seller in Section 5(xii) is breached, the Seller shall not have the right or obligation to cure, substitute or repurchase the affected Mortgage Loan but shall remit to the Servicer for deposit in the Collection Account, prior to the next succeeding Servicer Remittance Date, the amount of the Prepayment Charge indicated on the applicable part of the Closing Schedule to be due from the Mortgagor in the circumstances less any amount collected and remitted to the Servicer for deposit into the Collection Account.

(c) It is understood and agreed that the obligations of the Seller set forth in this Section 7 to cure or repurchase a defective Mortgage Loan (and to make payments pursuant to Section 7(b)) constitute the sole remedies of the Purchaser against the Seller respecting a missing document or a breach of the representations and warranties contained in Section 5(xii) or Section 6.

F-17

SECTION 8. Closing; Payment for the Mortgage Loans. The closing of the purchase and sale of the Mortgage Loans and the Cap Agreements, shall be held at the New York City office of Thacher Proffitt & Wood llp at 10:00 a.m. New York City time on the Closing Date.

The closing shall be subject to each of the following conditions:

(a) All of the representations and warranties of the Seller under this Agreement shall be true and correct in all material respects as of the date as of which they are made and no event shall have occurred which, with notice or the passage of time, would constitute a default under this Agreement;

(b) The Purchaser shall have received, or the attorneys of the Purchaser shall have received in escrow (to be released from escrow at the time of closing), all closing documents as specified in Section 9 of this Agreement, in such forms as are agreed upon and acceptable to the Purchaser, duly executed by all signatories other than the Purchaser as required pursuant to the respective terms thereof;

(c) The Seller shall have delivered or caused to be delivered and released to the Purchaser or to its designee, all documents (including without limitation, the Mortgage Loans) required to be so delivered by the Purchaser pursuant to Section 2.01 of the Pooling and Servicing Agreement; and

(d) All other terms and conditions of this Agreement and the Pooling and Servicing Agreement shall have been complied with.

Subject to the foregoing conditions, the Purchaser shall deliver or cause to be delivered to the Seller on the Closing Date, against delivery and release by the Seller to the Trustee of all documents required pursuant to the Pooling and Servicing Agreement, the consideration for the Mortgage Loans as specified in Section 3 of this Agreement.

SECTION 9. Closing Documents. Without limiting the generality of Section 8 hereof, the closing shall be subject to delivery of each of the following documents:

(a) An Officers’ Certificate of the Seller, dated the Closing Date, upon which the Purchaser and DBSI may rely with respect to certain facts regarding the sale of the Mortgage Loans by the Seller to the Purchaser;

(b) An Opinion of Counsel of the Seller, dated the Closing Date and addressed to the Purchaser and DBSI;

(c) Such opinions of counsel as the Rating Agencies or the Trustee may request in connection with the sale of the Mortgage Loans by the Seller to the Purchaser or the Seller’s execution and delivery of, or performance under, this Agreement; and

(d) Such further information, certificates, opinions and documents as the Purchaser or DBSI may reasonably request.

F-18

SECTION 10. Costs. The Seller shall pay (or shall reimburse the Purchaser or any other Person to the extent that the Purchaser or such other Person shall pay) all costs and expenses incurred in connection with the transfer and delivery of the Mortgage Loans, including without limitation, fees for title policy endorsements and continuations, the fees and expenses of the Seller’s accountants and attorneys, the costs and expenses incurred in connection with producing the Servicer’s loan loss, foreclosure and delinquency experience, and the costs and expenses incurred in connection with obtaining the documents referred to in Sections 9(a), 9(b) and 9(c), the costs and expenses of printing (or otherwise reproducing) and delivering this Agreement, the Pooling and Servicing Agreement, the Certificates, the prospectus and prospectus supplement, and any private placement memorandum relating to the Certificates and other related documents, the initial fees, costs and expenses of the Trustee, the fees and expenses of the Purchaser’s counsel in connection with the preparation of all documents relating to the securitization of the Mortgage Loans, the filing fee charged by the Securities and Exchange Commission for registration of the Certificates and the fees charged by any rating agency to rate the Certificates. All other costs and expenses in connection with the transactions contemplated hereunder shall be borne by the party incurring such expense.

SECTION 11. Servicing. The Mortgage Loans will be master serviced by the Master Servicer under the Pooling and Servicing Agreement and serviced by the Servicer under the Pooling and Servicing Agreement, on behalf of the Trust, and the Seller has represented to the Purchaser that such Mortgage Loans are not subject to any other servicing agreements with third parties. Neither the Purchaser nor any affiliate of the Purchaser is servicing the Mortgage Loans under any such servicing agreement and, accordingly, neither the Purchaser nor any affiliate of the Purchaser is entitled to receive any fee for releasing the Mortgage Loans from any such servicing agreement. The Seller shall arrange for the orderly transfer of such servicing to the Servicer. For so long as the Master Servicer master services the Mortgage Loans and the Servicer services the Mortgage Loans, the Master Servicer shall be entitled to the Master Servicing Fee and the Servicer shall be entitled to its Servicing Fee and such other payments as provided for under the terms of the Pooling and Servicing Agreement, as applicable.

SECTION 12. Mandatory Delivery; Grant of Security Interest. The sale and delivery on the Closing Date of the Mortgage Loans (exclusive of the Servicing Rights) described on the Closing Schedule in accordance with the terms and conditions of this Agreement is mandatory. It is specifically understood and agreed that each Mortgage Loan is unique and identifiable on the date hereof and that an award of money damages would be insufficient to compensate the Purchaser for the losses and damages incurred by the Purchaser in the event of the Seller’s failure to deliver the Mortgage Loans on or before the Closing Date. The Seller hereby grants to the Purchaser a lien on and a continuing security interest in the Seller’s interest in each Mortgage Loan and each document and instrument evidencing each such Mortgage Loan to secure the performance by the Seller of its obligation hereunder, and the Seller agrees that it holds such Mortgage Loans in custody for the Purchaser, subject to the Purchaser’s (i) right, prior to the Closing Date, to reject any Mortgage Loan to the extent permitted by this Agreement and (ii) obligation to deliver or cause to be delivered the consideration for the Mortgage Loans pursuant to Section 8 hereof. Any Mortgage Loans rejected by the Purchaser shall concurrently therewith be released from the security interest created hereby. All rights and remedies of the Purchaser under this Agreement are distinct from, and cumulative with, any other rights or remedies under this Agreement or afforded by law or equity and all such rights and remedies may be exercised concurrently, independently or successively.

F-19

Notwithstanding the foregoing, if on the Closing Date, each of the conditions set forth in Section 8 hereof shall have been satisfied and the Purchaser shall not have paid or caused to be paid the Purchase Price, or any such condition shall not have been waived or satisfied and the Purchaser determines not to pay or cause to be paid the Purchase Price, the Purchaser shall immediately effect the redelivery of the Mortgage Loans, if delivery to the Purchaser has occurred, and the security interest created by this Section 12 shall be deemed to have been released.

SECTION 13. Notices. All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered to or mailed by registered mail, postage prepaid, or transmitted by fax and, receipt of which is confirmed by telephone, if to the Purchaser, addressed to the Purchaser at 6525 Morrison Boulevard, Suite 318, Charlotte, North Carolina 28211, fax: (704) 365-1362, Attention: Doris Hearn, or such other address as may hereafter be furnished to the Seller in writing by the Purchaser; and if to the Seller, addressed to the Seller at 60 Wall Street, New York, New York 10005, fax: (212) 250-2740, Attention: Michael Commaroto, or to such other address as the Seller may designate in writing to the Purchaser.

SECTION 14. Severability of Provisions. Any part, provision, representation or warranty of this Agreement that is prohibited or that is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement that is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof.

SECTION 15. Agreement of Parties. The Seller and the Purchaser each agree to execute and deliver such instruments and take such actions as either of the others may, from time to time, reasonably request in order to effectuate the purpose and to carry out the terms of this Agreement and the Pooling and Servicing Agreement.

SECTION 16. Survival. The Seller agrees that the representations, warranties and agreements made by it herein and in any certificate or other instrument delivered pursuant hereto shall be deemed to be relied upon by the Purchaser, notwithstanding any investigation heretofore or hereafter made by the Purchaser or on its behalf, and that the representations, warranties and agreements made by the Seller herein or in any such certificate or other instrument shall survive the delivery of and payment for the Mortgage Loans and shall continue in full force and effect, notwithstanding any restrictive or qualified endorsement on the Mortgage Notes and notwithstanding subsequent termination of this Agreement, the Pooling and Servicing Agreement or the Trust Fund.

F-20

SECTION 17. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (EXCLUDING THE CHOICE OF LAW PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.

SECTION 18. Miscellaneous. This Agreement may be executed in two or more counterparts, each of which when so executed and delivered shall be an original, but all of which together shall constitute one and the same instrument. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. This Agreement supersedes all prior agreements and understandings relating to the subject matter hereof. Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or termination is sought. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

It is the express intent of the parties hereto that the conveyance of the Mortgage Loans and the Cap Agreements by the Seller to the Purchaser as provided in Section 4 hereof be, and be construed as, a sale of the Mortgage Loans and the Cap Agreements by the Seller to the Purchaser and not as a pledge of the Mortgage Loans and the Cap Agreements by the Seller to the Purchaser to secure a debt or other obligation of the Seller. However, in the event that, notwithstanding the aforementioned intent of the parties, the Mortgage Loans and the Cap Agreements are held to be property of the Seller, then (a) it is the express intent of the parties that such conveyance be deemed a pledge of the Mortgage Loans and the Cap Agreements by the Seller to the Purchaser to secure a debt or other obligation of the Seller and (b) (1) this Agreement shall also be deemed to be a security agreement within the meaning of Articles 8 and 9 of the New York Uniform Commercial Code; (2) the conveyance provided for in Section 4 hereof shall be deemed to be a grant by the Seller to the Purchaser of a security interest in all of the Seller’s right, title and interest in and to the Mortgage Loans and the Cap Agreements and all amounts payable to the holders of the Mortgage Loans and the Cap Agreements in accordance with the terms thereof and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, including without limitation all amounts, other than investment earnings, from time to time held or invested in the Collection Account whether in the form of cash, instruments, securities or other property; (3) the possession by the Purchaser or its agent of Mortgage Notes, the related Mortgages and such other items of property that constitute instruments, money, negotiable documents or chattel paper shall be deemed to be “possession by the secured party” for purposes of perfecting the security interest pursuant to Section 9-305 of the New York Uniform Commercial Code; and (4) notifications to persons holding such property and acknowledgments, receipts or confirmations from persons holding such property shall be deemed notifications to, or acknowledgments, receipts or confirmations from, financial intermediaries, bailees or agents (as applicable) of the Purchaser for the purpose of perfecting such security interest under applicable law. Any assignment of the interest of the Purchaser pursuant to Section 4(d) hereof shall also be deemed to be an assignment of any security interest created hereby. The Seller and the Purchaser 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 and the Cap Agreements, 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 and the Pooling and Servicing Agreement.

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SECTION 19. Third Party Beneficiary. The parties hereto acknowledge and agree that DBSI and each of its respective successors and assigns shall have all the rights of a third-party beneficiary in respect of Section 12 of this Agreement and shall be entitled to rely upon and directly enforce the provisions of Section 12 of this Agreement.

F-22

IN WITNESS WHEREOF, the Purchaser and the Seller have caused their names to be signed by their respective officers thereunto duly authorized as of the date first above written.

DB STRUCTURED PRODUCTS, INC.

By:

Name:

Title:

By:

Name:

Title:

ACE SECURITIES CORP.

By:

Name:

Title:

By:

Name:

Title:

EXHIBIT 1

Loan #:

Borrower:

LOST NOTE AFFIDAVIT

I, as _____________________ of ____________________, a _______________ am authorized to make this Affidavit on behalf of __________________ (the “Seller”). In connection with the administration of the Mortgage Loans held by ______________________, a _______________ [corporation] as Seller on behalf of ____________________ (the “Purchaser”), _______________________ (the “Deponent”), being duly sworn, deposes and says that:

1. The Seller’s address is:

2. The Seller previously delivered to the Purchaser a signed Initial Certification with respect to such Mortgage and/or Assignment of Mortgage;

3. Such Mortgage Note and/or Assignment of Mortgage was assigned or sold to the Purchaser by __________________, a pursuant to the terms and provisions of a Mortgage Loan Purchase Agreement dated as of _____________;

4. Such Mortgage Note and/or Assignment of Mortgage is not outstanding pursuant to a request for release of Documents;

5. Aforesaid Mortgage Note and/or Assignment of Mortgage (the “Original”) has been lost;

6. Deponent has made or caused to be made a diligent search for the Original and has been unable to find or recover same;

7. The Seller was the Seller of the Original at the time of the loss; and

8. Deponent agrees that, if said Original should ever come into Seller’s possession, custody or power, Seller will immediately and without consideration surrender the Original to the Purchaser.

9. Attached hereto is a true and correct copy of (i) the Note, endorsed in blank by the Mortgagee and (ii) the Mortgage or Deed of Trust (strike one) which secures the Note, which Mortgage or Deed of Trust is recorded in the county where the property is located.

10. Deponent hereby agrees that the Seller (a) shall indemnify and hold harmless the Purchaser, its successors and assigns, against any loss, liability or damage, including reasonable attorney’s fees, resulting from the unavailability of any Notes, including but not limited to any loss, liability or damage arising from (i) any false statement contained in this Affidavit, (ii) any claim of any party that purchased a mortgage loan evidenced by the Lost Note or any interest in such mortgage loan, (iii) any claim of any borrower with respect to the existence of terms of a mortgage loan evidenced by the Lost Note on the related property to the fact that the mortgage loan is not evidenced by an original note and (iv) the issuance of a new instrument in lieu thereof (items (i) through (iv) above hereinafter referred to as the “Losses”) and (b) if required by any Rating Agency in connection with placing such Lost Note into a Pass-Through Transfer, shall obtain a surety from an insurer acceptable to the applicable Rating Agency to cover any Losses with respect to such Lost Note.

11. This Affidavit is intended to be relied upon by the Purchaser, its successors and assigns. Seller represents and warrants that is has the authority to perform its obligations under this Affidavit of Lost Note.

Executed this _ day of _______, 200_.

By:

Name:

Title:

On this __ day of ______, 200_, before me appeared ______________________ to me personally known, who being duly sworn did say that he is the _______________________ of ____________________, a ______________________ and that said Affidavit of Lost Note was signed and sealed on behalf of such corporation and said acknowledged this instrument to be the free act and deed of said entity.

Signature:

[Seal]

EXHIBIT 2

APPENDIX E — Standard & Poor’s Predatory Lending Categories

Standard & Poor’s has categorized loans governed by anti-predatory lending laws in the Jurisdictions listed below into three categories based upon a combination of factors that include (a) the risk exposure associated with the assignee liability and (b) the tests and thresholds set forth in those laws. Note that certain loans classified by the relevant statute as Covered are included in Standard & Poor’s High Cost Loan Category because they included thresholds and tests that are typical of what is generally considered High Cost by the industry.

Standard & Poor’s High Cost Loan Categorization


State/Jurisdiction	Name of Anti-Predatory Lending Law/Effective Date	Category under Applicable Anti- Predatory Lending Law
Arkansas	Home Loan Protection Act, Ark. Code Ann. §§ 23-53-101 et seq. Effective July 16, 2003	High Cost Home Loan
Cleveland Heights, OH	Ordinance No. 72-2003 (PSH), Mun. Code §§ 757.01 et seq. Effective June 2, 2003	Covered Loan
Colorado	Consumer Equity Protection, Colo. Stat. Ann. §§ 5-3.5-101 et seq. Effective for covered loans offered or entered into on or after January 1, 2003. Other provisions of the Act took effect on June 7, 2002	Covered Loan
Connecticut	Connecticut Abusive Home Loan Lending Practices Act, Conn. Gen. Stat. §§36a-746 et seq. Effective October 1, 2001	High Cost Home Loan
District of Columbia	Home Loan Protection Act, D.C. Code §§ 26-1151.01 et seq. Effective for loans closed on or after January 28, 2003	Covered Loan
Florida	Fair Lending Act, Fla. Stat. Ann. §§ 494.0078 et seq. Effective October 2, 2002	High Cost Home Loan

Standard & Poor’s High Cost Loan Categorization


State/Jurisdiction	Name of Anti-Predatory Lending Law/Effective Date	Category under Applicable Anti- Predatory Lending Law
Georgia (Oct. 1, 2002 - Mar. 6, 2003)	Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. Effective October 1, 2002 - March 6, 2003	High Cost Home Loan
Georgia as amended (Mar. 7, 2003 - current)	Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. Effective for loans closed on or after March 7, 2003	High Cost Home Loan
HOEPA Section 32	Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, 12 C.F.R. §§ 226.32 and 226.34 Effective October 1, 1995, amendments October 1, 2002	High Cost Loan
Illinois	High Risk Home Loan Act, Ill. Comp. Stat. tit. 815, §§ 137/5 et seq. Effective January 1, 2004 (prior to this date, regulations under Residential Mortgage License Act effective from May 14, 2001)	High Risk Home Loan
Kansas	Consumer Credit Code, Kan. Stat. Ann. §§ 16a-1-101 et seq. Section 16a-1-301 and 16a-3-207 became effective April 14, 1999; Section 16a-3-308a became effective July 1, 1999	High Loan to Value Consumer Loan (id. § 16a-3-207) and;
Kansas		High APR Consumer Loan (id. §16a-3-308a)
Kentucky	2003 KY H.B. 287 - High Cost Home Loan Act, Ky. Rev. Stat §§360.100 et seq. Effective June 24, 2003	High Cost Home Loan
Maine	Truth in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et seq. Effective September 29, 1995 and as amended from time to time	High Rate High Fee Mortgage

Standard & Poor’s High Cost Loan Categorization


State/Jurisdiction	Name of Anti-Predatory Lending Law/Effective Date	Category under Applicable Anti- Predatory Lending Law
Massachusetts	Part 40 and Part 32, 209 C.M.R. §§ 32.00 et seq. and 209 C.M.R. §§ 40.01 et seq. Effective March 22, 2001 and amended from time to time	High Cost Home Loan
Nevada	Assembly Bill No. 284, Nev. Rev. Stat §§ 598D.010 et seq. Effective October 1, 2003	Home Loan
New Jersey	New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. Effective for loans closed on or after November 27, 2003	High Cost Home Loan
New Mexico	Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. Effective as of January 1, 2004; Revised as of February 26, 2004	High Cost Home Loan
New York	N.Y. Banking Law Article 6-1 Effective for applications made on or after April 1, 2003	High Cost Home Loan
North Carolina	Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit)	High Cost Home Loan
Ohio	H.B. 386 (codified in various sections of the Ohio Code), Ohio Rev. Code Ann. §§ 1349.25 et seq. Effective May 24, 2002	Covered Loan
Oklahoma	Consumer Credit Code (codified in various sections of Title 14A) Effective July 1, 2000; amended effective January 1, 2004	Subsection 10 Mortgage

Standard & Poor’s High Cost Loan Categorization


State/Jurisdiction	Name of Anti-Predatory Lending Law/Effective Date	Category under Applicable Anti- Predatory Lending Law
South Carolina	South Carolina High Cost and Consumer Home Loans Act, S.C. Code Ann. §§ 37-23-10 et seq. Effective for loans taken on or after January 1, 2004	High Cost Home Loan
West Virginia	West Virginia Residential Mortgage Lender, Broker and Servicer Act, W. Va. Code Ann. §§ 31-17-1 et seq. Effective June 5, 2002	West Virginia Mortgage Loan Act Loan

Standard & Poor’s Covered Loan Categorization


State/Jurisdiction	Name of Anti-Predatory Lending Law/Effective Date	Category under Applicable Anti- Predatory Lending Law
Georgia (Oct. 1, 2002 - Mar. 6, 2003)	Georgia Fain Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. Effective October 1, 2002 - March 6, 2003	Covered Loan
New Jersey	New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat §§ 46:10B-22 et seq. Effective November 27, 2003 - July 5, 2004	Covered Home Loan

Standard & Poor’s Home Loan Categorization


State/Jurisdiction	Name of Anti-Predatory Lending Law/Effective Date	Category under Applicable Anti- Predatory Lending Law
Georgia (Oct. 1, 2002 - Mar. 6, 2003)	Georgia Fain Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. Effective October 1, 2002 - March 6, 2003	Home Loan
New Jersey	New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat §§ 46:10B-22 et seq. Effective for loans closed on or after November 27, 2003	Home Loan
New Mexico	Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. Effective as of January 1, 2004; Revised as of February 26, 2004	Home Loan
North Carolina	Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit)	Consumer Home Loan
South Carolina	South Carolina High Cost and Consumer Home Loans Act, S.C. Code Ann. §§ 37-23-10 et seq. Effective for loans taken on or after January 1, 2004	Consumer Home Loan

Form

Item

Description

Master Servicer

Securities Administrator

Custodian

Trustee

Depositor

Sponsor

10-D

Must be filed within 15 days of the distribution date for the asset-backed securities.

Distribution and Pool Performance Information

Item 1121(a) - Distribution and Pool Performance Information

(1) Any applicable record dates, accrual dates, determination dates for calculating distributions and actual distribution dates for the distribution period.

(monthly statement)

(2) Cash flows received and the sources thereof for distributions, fees and expenses.

(monthly statement)

(3) Calculated amounts and distribution of the flow of funds for the period itemized by type and priority of payment, including:

(monthly statement)

G-1

Form	Item	Description	Master Servicer	Securities Administrator	Custodian	Trustee	Depositor	Sponsor
		(i) Fees or expenses accrued and paid, with an identification of the general purpose of such fees and the party receiving such fees or expenses.		X (monthly statement)
		(ii) Payments accrued or paid with respect to enhancement or other support identified in Item 1114 of Regulation AB (such as insurance premiums or other enhancement maintenance fees), with an identification of the general purpose of such payments and the party receiving such payments.		X (monthly statement)
		(iii) Principal, interest and other distributions accrued and paid on the asset-backed securities by type and by class or series and any principal or interest shortfalls or carryovers.		X (monthly statement)
		(iv) The amount of excess cash flow or excess spread and the disposition of excess cash flow.		X (monthly Statement)
		(4) Beginning and ending principal balances of the asset-backed securities.		X (monthly statement)

G-2

Form	Item	Description	Master Servicer	Securities Administrator	Custodian	Trustee	Depositor	Sponsor
		(5) Interest rates applicable to the pool assets and the asset-backed securities, as applicable. Consider providing interest rate information for pool assets in appropriate distributional groups or incremental ranges.		X (monthly statement)
		(6) Beginning and ending balances of transaction accounts, such as reserve accounts, and material account activity during the period.		X (monthly Statement)
		(7) Any amounts drawn on any credit enhancement or other support identified in Item 1114 of Regulation AB, as applicable, and the amount of coverage remaining under any such enhancement, if known and applicable.		X (monthly statement)
		(8) Number and amount of pool assets at the beginning and ending of each period, and updated pool composition information, such as weighted average coupon, weighted average remaining term, pool factors and prepayment amounts.		X (monthly statement)			Updated pool composition information fields to be as specified by Depositor from time to time
		(9) Delinquency and loss information for the period.	X	X (monthly statement)
		In addition, describe any material changes to the information specified in Item 1100(b)(5) of Regulation AB regarding the pool assets. (methodology)	X

G-3

Form	Item	Description	Master Servicer	Securities Administrator	Custodian	Trustee	Depositor	Sponsor
		(10) Information on the amount, terms and general purpose of any advances made or reimbursed during the period, including the general use of funds advanced and the general source of funds for reimbursements.	X	X (monthly statement)
		(11) 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.	X	X (monthly statement)
		(12) Material breaches of pool asset representations or warranties or transaction covenants.	X				X
		(13) Information on ratio, coverage or other tests used for determining any early amortization, liquidation or other performance trigger and whether the trigger was met.		X (monthly statement)
		(14) Information regarding any new issuance of asset-backed securities backed by the same asset pool, any pool asset changes (other than in connection with a pool asset converting into cash in accordance with its terms), such as additions or removals in connection with a prefunding or revolving period and pool asset substitutions and repurchases (and purchase rates, if applicable), and cash flows available for future purchases, such as the balances of any prefunding or revolving accounts, if applicable.	X	X

G-4

Form	Item	Description	Master Servicer	Securities Administrator	Custodian	Trustee	Depositor	Sponsor
		Disclose 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 the new pool assets.						X
		Item 1121(b) - Pre-Funding or Revolving Period Information Updated pool information as required under Item 1121(b).						X
	2	Legal Proceedings
		Item 1117 - Legal proceedings pending against the following entities, or their respective property, that is material to Certificateholders, including proceedings known to be contemplated by governmental authorities:
		Sponsor (Seller)						X
		Depositor					X
		Trustee				X
		Issuing entity					X
		Master Servicer, affiliated Servicer, other Servicer servicing 20% or more of pool assets at time of report, other material servicers	X
		Securities Administrator		X
		Originator of 20% or more of pool assets as of the Cut-off Date					X

G-5

Form	Item	Description	Master Servicer	Securities Administrator	Custodian	Trustee	Depositor	Sponsor
		Custodian			X
	3	Sales of Securities and Use of Proceeds
	3	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.					X
	4	Defaults Upon Senior Securities
	4	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)		X		X
	5	Submission of Matters to a Vote of Security Holders
	5	Information from Item 4 of Part II of Form 10-Q		X		X
	6	Significant Obligors of Pool Assets
	6	Item 1112(b) - Significant Obligor Financial Information*					X	X

G-6

Form	Item	Description	Master Servicer	Securities Administrator	Custodian	Trustee	Depositor	Sponsor
		*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.
	7	Significant Enhancement Provider Information
		Item 1114(b)(2) - Credit Enhancement Provider Financial Information*
		Determining applicable disclosure threshold		X
		Requesting required financial information or effecting incorporation by reference		X
		Item 1115(b) - Derivative Counterparty Financial Information*
		Determining current maximum probable exposure					X
		Determining current significance percentage		X
		Requesting required financial information or effecting incorporation by reference		X
		*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.
	8	Other Information
	8	Disclose any information required to be reported on Form 8-K during the period covered by the Form 10-D but not reported

G-7

Form	Item	Description	Master Servicer	Securities Administrator	Custodian	Trustee	Depositor	Sponsor
	9	Exhibits
		Distribution report		X
		Exhibits required by Item 601 of Regulation S-K, such as material agreements					X
8-K	Must be filed within four business days of an event reportable on Form 8-K.
	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	X	X (if Master Servicer is not a party)		X (if Master Servicer is not a party)	X (if Master Servicer is not a party)	X (if Master Servicer is not a party)
	1.02	Termination of a Material Definitive Agreement	X	X (if Master Servicer is not a party)		X (if Master Servicer is not a party)	X (if Master Servicer is not a party)	X (if Master Servicer is not a party)

G-8

Form	Item	Description	Master Servicer	Securities Administrator	Custodian	Trustee	Depositor	Sponsor
		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.
	1.03	Bankruptcy or Receivership
	1.03	Disclosure is required regarding the bankruptcy or receivership, if known to the Master Servicer, with respect to any of the following: Sponsor (Seller), Depositor, Master Servicer, affiliated Servicer, other Servicer servicing 20% or more of pool assets at time of report, other material servicers, Certificate Administrator, Trustee, significant obligor, credit enhancer (10% or more), derivatives counterparty, Custodian	X	X	X	X	X	X
	2.04	Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
	2.04	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 monthly statement	X	X

G-9

Form	Item	Description	Master Servicer	Securities Administrator	Custodian	Trustee	Depositor	Sponsor
	3.03	Material Modification to Rights of Security Holders
	3.03	Disclosure is required of any material modification to documents defining the rights of Certificateholders, including the Pooling and Servicing Agreement	X	X		X	X
	5.03	Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
	5.03	Disclosure is required of any amendment “to the governing documents of the issuing entity”				X	X
	5.06	Change in Shell Company Status
	5.06	[Not applicable to ABS issuers]					X
	6.01	ABS Informational and Computational Material
	6.01	[Not included in reports to be filed under Section 3.18]					X
	6.02	Change of Servicer or Trustee
	6.02	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, certificate administrator or trustee.	X	X		X	X

G-10

Form	Item	Description	Master Servicer	Securities Administrator	Custodian	Trustee	Depositor	Sponsor
		Reg AB disclosure about any new servicer (from entity appointing new servicer) or trustee (from Depositor) is also required.				X	X
	6.03	Change in Credit Enhancement or Other External Support
	6.03	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.		X		X	X
		Reg AB disclosure about any new enhancement provider is also required.					X
	6.04	Failure to Make a Required Distribution		X		X
	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.					X
		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.					X

G-11

Form

Item

Description

Master Servicer

Securities Administrator

Custodian

Trustee

Depositor

Sponsor

7.01

Regulation FD Disclosure

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 security holders.

9.01

Financial Statements and Exhibits

10-K

Must be filed within 90 days of the fiscal year end for the registrant.

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

Exhibits and Financial Statement Schedules

Item 1112(b) - Significant Obligor Financial Information

Item 1114(b)(2) - Credit Enhancement Provider Financial Information

Determining applicable disclosure threshold

Requesting required financial information or effecting incorporation by reference

Item 1115(b) - Derivative Counterparty Financial Information

Determining current maximum probable exposure

Determining current significance percentage

G-12

Form	Item	Description	Master Servicer	Securities Administrator	Custodian	Trustee	Depositor	Sponsor
		Requesting required financial information or effecting incorporation by reference		X
		Item 1117 - Legal proceedings pending against the following entities, or their respective property, that is material to Certificateholders, including proceedings known to be contemplated by governmental authorities:
		Sponsor (Seller)						X
		Depositor					X
		Trustee				X
		Issuing entity					X
		Master Servicer, affiliated Servicer, other Servicer servicing 20% or more of pool assets at time of report, other material servicers	X
		Securities Administrator		X
		Originator of 20% or more of pool assets as of the Cut-off Date					X	X
		Custodian			X
		Item 1119 - Affiliations and relationships between the following entities, or their respective affiliates, that are material to Certificateholders:
		Sponsor (Seller)						X
		Depositor					X
		Trustee				X (with respect to 1119(a) affiliations only)

G-13

Form	Item	Description	Master Servicer	Securities Administrator	Custodian	Trustee	Depositor	Sponsor
		Master Servicer, affiliated Servicer, other Servicer servicing 20% or more of pool assets at time of report, other material servicers	X
		Securities Administrator		X
		Originator					X	X
		Custodian			X (with respect to affiliations only)
		Credit Enhancer/Support Provider					X	X
		Significant Obligor					X	X
		Item 1122 - Assessment of Compliance with Servicing Criteria	X	X	X
		Item 1123 - Servicer Compliance Statement	X

G-14


	Financial Markets 280 Bishopsgate London EC2M 4RB


Memorandum	October 30, 2006


To:	HSBC Bank USA, National Association, not in its individual capacity, but solely as Supplemental Interest Trust Trustee for the Supplemental Interest Trust with respect to Ace Securities Corp. Home Equity Loan Trust, Series 2006-FM2, Asset Backed Pass-Through Certificates (“Party B”) 452 Fifth Avenue New York, New York 10018 Attn: Corporate Trust & Loan Agency Tel: 212-525-1309 Fax: 212-525-1300 E-Mail: fernando.acebedo@us.hsbc.com

Copy To:	Wells Fargo Bank, National Association 9062 Old Annapolis Road Columbia, Maryland 21045 Tel: 410-884-2000 Attn: Client Manager, ACE 2006-FM2 Fax: 410-715-2380

From:	The Royal Bank of Scotland plc (“Party A”) c/o RBS Financial Markets Level 7, 135 Bishopsgate London EC2M 3UR Attn: Head of Legal, Financial Markets Tel: 44 207 085 5000 Fax: 44 207 085 8411

Copy To:	Greenwich Capital Markets, Inc. 600 Steamboat Road Greenwich, CT 06830 Attn: Legal Department - Derivatives Documentation Tel.: 203-618-2576 Fax: 203-618-2533/34

Our Reference Number:	D16110809

Page 1 of 18

Dear Sir or Madam:

The purpose of this letter agreement is to confirm the terms and conditions of the Transaction entered into between Party A and HSBC Bank USA, National Association as supplemental interest trust trustee of the supplemental interest trust (the “Supplemental Interest Trust Trustee” and the “Supplemental Interest Trust”, respectively) under the Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”), dated and effective as of October 1, 2006, among Ace Securities Corp., as Depositor, Countrywide Home Loans Servicing LP, as Servicer, Wells Fargo Bank, National Association, as Master Servicer and Securities Administrator and HSBC Bank USA, National Association as, (each a “party” and together “the parties”) on the Trade Date specified below (the “Transaction”). This letter agreement (the “Agreement”) constitutes the sole and complete “Confirmation”, as referred to in the Master Agreement (as defined below).

The definitions and provisions contained in the 2000 ISDA Definitions (the “Definitions”) as published by the International Swaps and Derivatives Association, Inc., (“ISDA”) are incorporated into this Confirmation. Any reference to a “Swap Transaction” in the Definitions is deemed to be a reference to a “Transaction” for purposes of this Agreement, and any reference to a “Transaction” in this Agreement is deemed to be a reference to a “Swap Transaction” for purposes of the Definitions. This Confirmation will be governed by and subject to the terms and conditions which would be applicable if, prior to the Trade Date, the parties had executed and delivered an ISDA Master Agreement (Multicurrency-Cross Border), in the form published by ISDA in 1992 (the “Master Agreement”) (but without any Schedule except for the elections noted in Schedule B hereto). For the avoidance of doubt, the Transaction described herein shall be the sole Transaction governed by such Master Agreement. In the event of any inconsistency between the provisions of the Master Agreement and this Confirmation, this Confirmation will govern. Terms capitalized but not defined herein or in the Definitions incorporated herein shall have the respective meanings attributed to them in the Pooling and Servicing Agreement.

This Confirmation evidences a complete binding agreement between the parties as to the terms of the Transaction to which this Confirmation relates. In addition, each party represents to the other party and will be deemed to represent to the other party on the date on which it enters into a Transaction that (absent a written agreement between the parties that expressly imposes affirmative obligations to the contrary for that Transaction):

(i)

Principal In the case of Party A, it is acting as principal and not as agent when entering into the Transaction and in the case of Party B, it is acting as Supplemental Interest Trust Trustee when entering into the Transaction.

(ii)

Non-Reliance In the case of Party A, it is acting for its own account and, in the case of Party B, it is acting as Supplemental Interest Trust Trustee, and in the case of both parties, it has made its own independent decisions to enter into the Transaction and as to whether the Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisors as it has deemed necessary and, with respect to Party B, as directed under the Pooling and Servicing Agreement. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into the Transaction; it being understood that information and explanations related to the terms and conditions of the Transaction shall not be considered investment advice or a recommendation to enter into the Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of the Transaction.

Page 2 of 18

(iii)

Evaluation and Understanding It is capable of evaluating and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the Agreement and that Transaction. It is also capable of assuming, and assumes, the financial and other risks of the Agreement and that Transaction.

(iv)

Status of Parties The other party is not acting as an agent, fiduciary or advisor for it in respect of that Transaction.

2	The terms of the particular Transaction to which this Confirmation relates are as follows:

Notional Amount:	With respect to any Calculation Period, the amount set forth on Schedule A attached hereto.

Trade Date:	October 20, 2006

Effective Date:	October 30, 2006

Termination Date:	October 25, 2011, subject to adjustment in accordance with the Business Day Convention (provided, however, solely for the purpose of determining the Fixed Rated Payer Period End Date with respect to the final Calculation Period, such date shall be subject to No Adjustment).

Fixed Amounts:

Fixed Rate Payer:	Party B

Fixed Rate Payer Period End Dates:	The 25^th day of each month of each year commencing May 25, 2007, through and including the Termination Date, subject to no adjustment. For the avoidance of doubt, the initial Fixed Rate Payer Calculation Period will commence on (and including) April 25, 2007 and end on (and excluding) May 25, 2007.

Fixed Rate Payer Payment Dates:	Early Payment shall be applicable. The Fixed Rate Payer Payment Dates shall be one (1) Business Day prior to each Fixed Rate Payer Period End Date, subject to adjustment in accordance with the Business Day Convention.

Fixed Rate:	5.120%

Fixed Rate Day Count Fraction:	30/360

Additional Fixed Amount	Party B will pay USD 370,000 to Party A on the Effective Date (the parties hereto agree that such payment will be made on behalf of Party B by Deutsche Bank Structured Products, Inc.)

Page 3 of 18

Floating Amounts:

Floating Rate Payer:	Party A

Floating Rate Payer Period End Dates:	The 25^th day of each month of each year commencing May 25, 2007, through and including the Termination Date, subject to adjustment in accordance with the Business Day Convention. For the avoidance of doubt, the initial Floating Rate Payer Calculation Period will commence on (and including) April 25, 2007 and end on (and excluding) May 25, 2007.

Floating Rate Payer Payment Dates:	Early Payment shall be applicable. The Floating Rate Payer Payment Dates shall be one (1) Business Day prior to each Floating Rate Payer Period End Date, subject to adjustment in accordance with the Business Day Convention.

Floating Rate Option:	USD-LIBOR-BBA

Designated Maturity:	One month

Spread:	None

Floating Rate Day Count Fraction:	Actual/360

Reset Dates:	First day of each Calculation Period

Business Days for payment:	New York

Business Day Convention:	Following

Calculation Agent:	Party A

3	Recording of Conversations

Each party (i) consents to the recording of the telephone conversations of trading and marketing personnel of the parties and (ii) agrees to obtain any necessary consent of, and give notice of such recording to, such personnel of it.

4	Account Details:

Account for payments to Party A:	For the account of The Royal Bank of Scotland Financial Markets Fixed Income and Interest Rate Derivative Operations, London SWIFT RBOSGB2RTCM with JPMorgan Chase Bank, New York CHASUS33, ABA # 021000021 Account Number 400930153

Account for payments to Party B:	Wells Fargo Bank, NA ABA # 121000248 Account Name: SAS Clearing Account #3970771416 FFC to: 50960802, ACE 2006-FM2 Supplemental Interest Trust Account

Page 4 of 18

5	Offices:

The Office of Party A for this Transaction is:	London

The Office of Party B for this Transaction is:	New York

6	Other Provisions:

6.1

Agency Role of Greenwich Capital Markets, Inc. This Transaction has been entered into by Greenwich Capital Markets, Inc., as agent for The Royal Bank of Scotland plc. Greenwich Capital Markets, Inc. has not guaranteed and is not otherwise responsible for the obligations of Party A under this Transaction.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

Page 5 of 18

Please promptly confirm that the foregoing correctly sets forth the terms of the Transaction entered into between us by executing this Confirmation and returning it to us by facsimile to:

The Royal Bank of Scotland plc

Attention: Derivatives Documentation

Fax: 0207 375 6724 / 6486 Phone: 0207 375 4225

THE ROYAL BANK OF SCOTLAND PLC

By: Greenwich Capital Markets, Inc., its agent

Name:

Title:

Accepted and confirmed as of the Trade Date written above:

HSBC BANK USA, NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS TRUSTEE FOR THE ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2006-FM2, ASSET BACKED PASS-THROUGH CERTIFICATES

Name:

Title:

Page 6 of 18

Schedule A to the Confirmation dated as of October 30, 2006

Re: Reference Number D16110809

Amortization Schedule, all such dates subject to No Adjustment with respect to Fixed Rate Payer Period End Dates and subject to adjustment in accordance with the Business Day Convention with respect to Floating Rate Payer Period End Dates

From and Including

To but Excluding

Notional Amount (USD)

4/25/2007	5/25/2007	750,625,530.00
5/25/2007	6/25/2007	722,386,500.00
6/25/2007	7/25/2007	692,523,487.00
7/25/2007	8/25/2007	663,851,403.00
8/25/2007	9/25/2007	636,370,002.00
9/25/2007	10/25/2007	610,029,696.00
10/25/2007	11/25/2007	584,782,971.00
11/25/2007	12/25/2007	560,584,294.00
12/25/2007	1/25/2008	537,390,033.00
1/25/2008	2/25/2008	515,158,379.00
2/25/2008	3/25/2008	493,849,265.00
3/25/2008	4/25/2008	473,420,257.00
4/25/2008	5/25/2008	453,806,622.00
5/25/2008	6/25/2008	434,296,819.00
6/25/2008	7/25/2008	370,289,100.00
7/25/2008	8/25/2008	316,586,897.00
8/25/2008	9/25/2008	271,896,943.00
9/25/2008	10/25/2008	234,958,424.00
10/25/2008	11/25/2008	224,172,187.00
11/25/2008	12/25/2008	214,152,548.00
12/25/2008	1/25/2009	204,588,867.00
1/25/2009	2/25/2009	195,461,495.00
2/25/2009	3/25/2009	186,748,756.00
3/25/2009	4/25/2009	178,431,509.00
4/25/2009	5/25/2009	170,491,519.00
5/25/2009	6/25/2009	162,911,407.00
6/25/2009	7/25/2009	155,674,606.00
7/25/2009	8/25/2009	148,765,527.00
8/25/2009	9/25/2009	142,168,903.00
9/25/2009	10/25/2009	135,870,335.00
10/25/2009	11/25/2009	129,856,134.00
11/25/2009	12/25/2009	124,113,249.00
12/25/2009	1/25/2010	118,629,234.00
1/25/2010	2/25/2010	113,392,230.00
2/25/2010	3/25/2010	108,390,916.00
3/25/2010	4/25/2010	103,614,502.00
4/25/2010	5/25/2010	99,052,699.00

Page 7 of 18

From and Including

To but Excluding

Notional Amount (USD)

5/25/2010	6/25/2010	94,695,698.00
6/25/2010	7/25/2010	90,534,143.00
7/25/2010	8/25/2010	86,559,112.00
8/25/2010	9/25/2010	82,762,097.00
9/25/2010	10/25/2010	79,134,983.00
10/25/2010	11/25/2010	75,670,032.00
11/25/2010	12/25/2010	72,359,862.00
12/25/2010	1/25/2011	69,197,434.00
1/25/2011	2/25/2011	66,176,031.00
2/25/2011	3/25/2011	63,289,251.00
3/25/2011	4/25/2011	60,530,982.00
4/25/2011	5/25/2011	57,895,399.00
5/25/2011	6/25/2011	55,376,942.00
6/25/2011	7/25/2011	52,970,276.00
7/25/2011	8/25/2011	50,667,336.00
8/25/2011	9/25/2011	48,466,558.00
9/25/2011	10/25/2011	46,363,369.00

Page 8 of 18

Schedule B to the Confirmation dated as of October 30, 2006

Re: Reference Number D16110809

Between The Royal Bank of Scotland plc (“Party A”) and HSBC Bank USA, National Association, not in its individual capacity, but solely as Supplemental Interest Trust Trustee for the Supplemental Interest Trust with respect to Ace Securities Corp. Home Equity Loan Trust, Series 2006-FM2, Asset Backed Pass-Through Certificates (“Party B”)

Part. 1 Termination Provisions

(a)

“Specified Entity” means in relation to Party A for the purpose of the Master Agreement:

Section 5(a)(v): none.

Section 5(a)(vi): none.

Section 5(a)(vii): none.

Section 5(b)(iv): none.

and in relation to Party B for the purpose of the Master Agreement:

Section 5(a)(v): none.

Section 5(a)(vi): none.

Section 5(a)(vii): none.

Section 5(b)(iv): none.

(b)

“Specified Transaction” is not applicable to Party A or Party B for any purpose, and accordingly, Section 5(a)(v) of the Master Agreement shall not apply to Party A or Party B.

(c)

The “Breach of Agreement” provisions of Section 5(a)(ii) of the Master Agreement will be inapplicable to Party A and Party B.

(d)

The “Credit Support Default” provisions of Section 5(a)(iii) of the Master Agreement will be inapplicable to Party A and Party B.

(e)

The “Misrepresentation” provisions of Section 5(a)(iv) of the Master Agreement will be inapplicable to Party A and Party B.

(f)

The “Default Under Specified Transaction” provisions of Section 5(a)(v) of the Master Agreement will be inapplicable to Party A and Party B.

(g)

The “Cross Default” provisions of Section 5(a)(vi) of the Master Agreement will be inapplicable to Party A and Party B.

(h)

The “Bankruptcy” provision of Section 5(a)(vii)(2) of the Master Agreement will be inapplicable to Party B.

(i)

The “Credit Event Upon Merger” provisions of Section 5(b)(iv) of the Master Agreement will be inapplicable to Party A and Party B.

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(j)

The “Automatic Early Termination” provision of Section 6(a) of the Master Agreement will be inapplicable to Party A and Party B; provided that where there is an Event of Default under Section 5(a)(vii)(1), (3), (4), (5), (6) or, to the extent analogous thereto, (8), and the Defaulting Party is governed by a system of law that does not permit termination to take place after the occurrence of such Event of Default, then the Automatic Early Termination provisions of Section 6(a) will apply.

If an Early Termination Date has occurred under Section 6(a) of the Master Agreement as a result of Automatic Early Termination, and if the Non-defaulting Party determines that it has either sustained or incurred a loss or damage or benefited from a gain in respect of any Transaction, as a result of movement in interest rates, currency exchange rates, other relevant rates or market quotations between the Early Termination Date and the date upon which the Non-defaulting Party first becomes aware that such Event of Default has occurred under Section 6(a) of the Agreement, then (i) the amount of such loss or damage shall be added to the amount due by the Defaulting Party or deducted from the amount due by the Non-defaulting Party, as the case may be (in both cases pursuant to Section 6(e)(i)(3) of the Master Agreement); or (ii) the amount of such gain shall be deducted from the amount due by the Defaulting Party or added to the amount due by the Non-defaulting Party, as the case may be (in both cases pursuant to Section 6(e)(i)(3) of the Master Agreement).

(k)

Payments on Early Termination For the purpose of Section 6(e) of the Master Agreement:

(i)

Market Quotation will apply; and

(ii)

The Second Method will apply.

(l)

“Termination Currency” means United States Dollars.

Part. 2 Tax Representations

Payer Representations For the purpose of Section 3(e) of the Master Agreement, each of Party A and Party B will make the following representation:

It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of the Master Agreement) to be made by it to the other party under this Agreement. In making this representation, it may rely on (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of the Master Agreement, (ii) the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of the Master Agreement and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of the Master Agreement and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of the Master Agreement, provided that it shall not be a breach of this representation where reliance is placed on clause (ii) and the other party does not deliver a form or document under Section 4(a)(iii) of the Master Agreement by reason of material prejudice to its legal or commercial position.

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Payee Representations For the purpose of Section 3(f) of the Master Agreement, Party A and Party B make the following representations:

(i)

Party A represents that

(A) it is a tax resident of the United Kingdom;

(B) it is a "foreign person" within the meaning of the applicable U.S. Treasury Regulations concerning information reporting and backup withholding tax (as in effect on January 1, 2001), unless Party A provides written notice to Party B that it is no longer a foreign person;

(C) in respect of each Transaction it enters into through an office or discretionary agent in the United States or which otherwise is allocated (in whole or part) for United States federal income tax purposes to such United States trade or business, each payment received or to be received by it under such Transaction (or portion thereof, if applicable) will be effectively connected with its conduct of a trade or business in the United States; and

(D) in respect of all other Transactions or portions thereof, no such payment received or to be received by it in connection with this Agreement is attributable to a trade or business carried on by it through a permanent establishment in the United States.

(ii)

Party B represents that it is the Supplemental Interest Trust Trustee of the Supplemental Interest Trust created under the Pooling and Servicing Agreement.

Part. 3 Agreement to Deliver Documents

For the purpose of Sections 4(a)(i) and (ii) of the Master Agreement, Party A and Party B agree to deliver the following documents, as applicable:

(a)

Tax forms, documents or certificates to be delivered are:

Party Required to Deliver Document	Form/Document/Certificate	Date by Which to be Delivered
Party A	Any form or document required or reasonably requested to allow the other party to make payments under the Agreement without any deduction or withholding for or on account of any Tax, or with such deduction or withholding at a reduced rate.	Promptly upon reasonable demand by the other party.

Party B	Any form or document required or reasonably requested to allow the other party to make payments under the Agreement without any deduction or withholding for or on account of any Tax, or with such deduction or withholding at a reduced rate.	(i) Upon the execution and delivery of this Confirmation, (ii) any time when the document last delivered becomes incorrect or out-of-date and (iii) promptly upon reasonable demand by the other party.

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(b)

Other documents to be delivered and covered by the Section 3(d) representation are:--

Party required to deliver	Form/Document/or Certificate	Date by which to be delivered	Covered by Section 3(d) representation

Party A and Party B	Incumbency Certificate (or, if available the current authorized signature book or equivalent authorizing documentation) specifying the names, titles, authority and specimen signatures of the persons authorized to execute the Confirmation which sets forth the specimen signatures of each signatory to the Confirmation signing on its behalf.	Concurrently with the execution and delivery of the Confirmation unless previously delivered and still in full force and effect.	Yes

Party B	The Pooling and Servicing Agreement	Concurrently with the execution and delivery of the Confirmation.	No

Party A and Party B	Legal opinion[s] with respect to such party and its Credit Support Provider, if any, for it, reasonably satisfactory in form and substance to the other party relating to the enforceability of the party’s obligation under this Agreement.	Upon the execution and delivery of this Agreement and any Confirmation	No

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Part. 4 Miscellaneous

(a)

Addresses for Notices For the purposes of Section 12(a) of the Master Agreement:

Addresses for notices or communications to Party A and to Party B shall be those set forth on the first page of the Confirmation.

(b)

Process Agent For the purpose of Section 13(c) of the Master Agreement:

Party A appoints as its Process Agent: none.

Party B appoints as its Process Agent: none.

(c)

Offices With respect to Party A, the provisions of Section 10(a) of the Master Agreement will apply.

(d)

Multibranch Party For the purpose of Section 10(c) of the Master Agreement:

Party A is not a Multibranch Party.

Party B is not a Multibranch Party.

(e)

Calculation Agent The Calculation Agent is Party A.

(f)

Credit Support Document

Party A: None or, if pursuant to Part 5(j) below, Party A posts collateral under a Credit Support Annex or provides a guarantee or other contingent agreement, such Credit Support Annex or guarantee or other contingent agreement.

Party B: None

(g)

Credit Support Provider

Credit Support Provider means in relation to Party A: None or, if pursuant to Part 5(j) below, Party A provides a guarantee or other contingent agreement, the primary obligor under such guarantee or other contingent agreement.

Credit Support Provider means in relation to Party B: none.

(h)

Governing Law This Agreement will be governed by and construed in accordance with the laws of the State of New York (without reference to conflicts of law doctrine other than New York General Obligations Law Sections 5-1401 and 5-1402).

Page 13 of 18

(i)

Netting of Payments Subparagraph (ii) of Section 2(c) of the Master Agreement will apply to the Transaction evidenced by the Confirmation.

(j)

“Affiliate” Party B shall be deemed to have no Affiliates for purposes of this Transaction.

(k)

Jurisdiction Section 13(b) of the Master Agreement is hereby amended by: (i) deleting in the second line of subparagraph (i) thereof the word “non-”: and (ii) deleting the final paragraph thereof.

Part. 5 Other Provisions

(a)

Modifications to the Agreement Section 3(a) of the Master Agreement shall be amended to include the following additional representations after paragraph 3(a)(v):

(vi) Eligible Contract Participant etc. It is an “eligible contract participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act (7 U.S.C. 1a), as amended by the Commodity Futures Modernization Act of 2000 and the Transaction evidenced hereby has been the subject of individual negotiations and is intended to be exempt from, or otherwise not subject to regulation thereunder.

(b)

Waiver of Right to Trial by Jury Each party hereby irrevocably waives any and all rights to trial by jury in any legal proceeding arising out of or relating to this Agreement or any Transaction hereunder.

(c)

Absence of Litigation In Section 3(c) of the Master Agreement the words “or any of its Affiliates” shall be deleted.

(d)

Tax Event In Section 5(b)(ii)(y) of the Master Agreement the words “, or there is a substantial likelihood that it will,” shall be deleted.

(e)

Transfer and Amendment

Subject to Part 5(j) herein, no transfer, amendment, waiver, supplement, assignment or other modification of this Transaction shall be permitted by either party unless (i) each of Standard and Poor’s Ratings Services, a Division of The McGraw-Hill Companies, Inc. (“S&P”) and Moody’s Investors Service, Inc. (“Moody’s”) (each a “Rating Agency”) has been provided notice of the same and (ii) each of S&P and Moody’s confirm in writing (including by facsimile transmission) that they will not downgrade, qualify, withdraw or otherwise modify their then-current rating of the Certificates and any notes backed by the Certificates (“Notes”).

(f)

Supplemental Interest Trust Trustee Capacity

It is expressly understood and agreed by the parties hereto that insofar as this Confirmation is executed by the Supplemental Interest Trust Trustee (i) this Confirmation is executed and delivered by HSBC Bank USA, National Association, not in its individual capacity but solely as Supplemental Interest Trust Trustee of the Supplemental Interest Trust created under the Pooling and Servicing Agreement in the exercise of the powers and authority conferred and vested in it thereunder (ii) each of the representations, undertakings and agreements herein made on behalf of the Supplemental Interest Trust is made and intended not as personal representations of the Supplemental Interest Trust Trustee but is made and intended for the purpose of binding only the Supplemental Interest Trust created under the Pooling and Servicing Agreement, and (iii) under no circumstances will HSBC Bank USA, National Association in its individual capacity be personally liable for the payment of any indebtedness or expenses or be personally liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken under this Confirmation.

Page 14 of 18

(g)

Proceedings

Party A shall not institute against or cause any other person to institute against, or join any other person in instituting against, Party B, the Supplemental Interest Trust or the Trust, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any federal or state bankruptcy, dissolution or similar law, for a period of one year and one day (or, if longer, the applicable preference period) following indefeasible payment in full of the Certificates, provided that nothing herein shall preclude, or be deemed to estop Party A from taking any action in any case or proceeding voluntarily filed or commenced by or on behalf of Party B or in any involuntary case or proceeding after it has been commenced. This provision shall survive the termination of this Agreement.

(h)

Set-off

Notwithstanding any provision of this Agreement or any other existing or future agreement, each party irrevocably waives any and all rights it may have to set-off, net recoup or otherwise withhold or suspend or condition payment or performance of any obligation between it and the other party hereunder against any obligation between it and the other party under any other agreements. The provisions for Set-off set forth in Section 6(e) of the Master Agreement shall not apply for purposes of this Transaction.

(i)

Section 1(c)

For purposes of Section 1(c) of the Master Agreement, this Transaction shall be the sole Transaction under the Agreement.

(j)

Rating Agency Downgrade

If a Ratings Event (as defined below) occurs with respect to Party A (or any applicable credit support provider), then Party A shall, within (30) days of such Ratings Event subject to the Rating Agency Condition (as hereinafter defined) and at its own expense (unless, within 30 days of such Ratings Event, each of S&P and Moody’s has reconfirmed the rating of the Certificates and Notes which was in effect immediately prior to such Ratings Event), (i) assign this Transaction hereunder to a third party that meets or exceeds, or as to which any applicable credit support provider of such third party meets or exceeds, the Approved Ratings Thresholds (as defined below) on terms substantially similar to this Confirmation, (ii) obtain a guaranty of Party A’s obligations under this Transaction from a third party that meets or exceeds the Approved Ratings Threshold, in form and substance, (iii) post collateral, or (iv) establish any other arrangement, which will be sufficient to restore the immediately prior ratings of the Certificates and Notes. For purposes of this Transaction, a “Ratings Event” shall occur with respect to Party A (or any applicable credit support provider), if its short-term unsecured and unsubordinated debt ceases to be rated at least “A-1” by S&P or its short-term unsecured and unsubordinated debt ceases to be rated at least “P-1” by Moody’s or its long-term unsecured and unsubordinated debt ceases to be rated at least “A1” by Moody’s (including in connection with a merger, consolidation or other similar transaction by Party A or any applicable credit support provider) such ratings being referred to herein as the “Approved Ratings Thresholds.” If a Further Ratings Event (as defined below) occurs with respect to Party A (or any applicable credit support provider), then Party A shall, within (10) days of such Further Ratings Event subject to the Rating Agency Condition (as hereinafter defined) and at its own expense (unless, within 10 days of such Ratings Event, S&P has reconfirmed the rating of the Certificates and Notes which was in effect immediately prior to such Further Ratings Event), (i) assign this Transaction hereunder to a third party that meets or exceeds, or as to which any applicable credit support provider of such third party meets or exceeds, the Approved Ratings Thresholds on terms substantially similar to this Confirmation or (ii) obtain a guaranty of Party A’s obligations under this Transaction from a third party that meets or exceeds the Approved Ratings Thresholds. For purposes of this Transaction, a “Further Ratings Event” shall occur with respect to Party A (or any applicable credit support provider), if its long-term unsecured and unsubordinated debt ceases to be rated at least “BBB-” by S&P or its short-term unsecured and unsubordinated debt ceases to be rated at least “P-1” on watch for downgrade by Moody’s or its long-term unsecured and unsubordinated debt ceases to be rated at least “A2” on watch for downgrade by Moody’s (including in connection with a merger, consolidation or other similar transaction by Party A or any applicable credit support provider). "Rating Agency Condition" means, with respect to any particular proposed act or omission to act hereunder that the party acting or failing to act must consult with each Rating Agency then providing a rating of the Certificates and Notes and receive from each Rating Agency a prior written confirmation that the proposed action or inaction would not cause a downgrade or withdrawal of the then-current rating of the Certificates and Notes.

Page 15 of 18

(k)

Additional Termination Events

Additional Termination Events will apply as specified below:

The occurrence of the following shall constitute an Additional Termination Event:

If a Rating Agency Downgrade has occurred and Party A has not complied with paragraph (j) above, then an Additional Termination Event shall have occurred with respect to Party A and Party A shall be the sole Affected Party with respect to such Additional Termination Event.

If, at any time, the Master Servicer purchases the Mortgage Loans pursuant to Section 10.01 of the Pooling and Servicing Agreement, then an Additional Termination Event shall have occurred and Party B shall be the sole Affected Party with respect thereto; provided, however, that notwithstanding Section 6(b)(iv) of the Master Agreement, both Party A and Party B shall have the right to designate an Early Termination Date in respect of this Additional Termination Event; provided, further, that the Early Termination Date shall not be prior to the Optional Termination Date.

Page 16 of 18

If, at any time, the Pooling and Servicing Agreement is amended or modified without the prior written consent of Party A (such consent not to be unreasonably withheld), where such consent is required under the terms of the Pooling and Servicing Agreement, then an Additional Termination Event shall have occurred and Party B shall be the sole Affected Party.

If, upon the occurrence of a Regulation AB Event (as defined in Part 5(o) below) Party A has not, within 30 days after such Regulation AB Event complied with any of the provisions set forth in Part 5(o)(iii) below (provided that if the significance percentage reaches 10% after a Regulation AB Event has occurred, Party A must comply with the provisions set forth in Part 5(o)(iii) below within 10 calendar days of Party A being informed of the significance percentage reaching 10%), then an Additional Termination Event shall have occurred with respect to Party A and Party A shall be the sole Affected Party with respect to such Additional Termination Event.

(l)

Amendment to ISDA Form

The “Failure to Pay or Deliver” provision in Section 5(a)(i) of the Master Agreement is hereby amended by deleting the word “third” in the third line thereof and inserting the word “first” in place thereof.

(m)

Severability

If any term, provision, covenant, or condition of the Agreement, or the application thereof to any other party or circumstance, shall be held invalid or unenforceable (in whole or in part) for any reason, the remaining terms, provisions, covenants, and conditions hereof shall continue in full force and effect as if the Agreement has been executed with the invalid or unenforceable provision portion eliminated, so long as the Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter of the Agreement and the deletion of such portion of the Agreement will not substantially impair the respective benefits or expectations of the parties. The parties shall endeavor to engage in good faith negotiations to replace any invalid or unenforceable term, provision, covenant or conditions with a valid or enforceable term, provision, covenant or condition, the economic effect of which comes as close as possible to that of the invalid or unenforceable term, provision, covenant or condition.

(n)

Priority of Payments

Party A hereby agrees that, notwithstanding any provision of this agreement to the contrary, Party B’s obligations to pay any amounts owing under this Agreement shall be subject to Section 5.01 and Section 5.07 of the Pooling and Servicing Agreement and Party A’s right to receive payment of such amounts shall be subject to Section 5.01 and Section 5.07 of the Pooling and Servicing Agreement. This provision will survive the termination of this Agreement.

(o)

Compliance with Regulation AB

(i)

Party A agrees and acknowledges that while reporting requirements with respect to this Transaction are operative by force of law, DB Structured Products, Inc. (“DBSP”) and ACE Securities Corp. (“ACE”) are required under Regulation AB under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (“Regulation AB”), to disclose certain information set forth in Regulation AB regarding Party A or its group of affiliated entities, if applicable, depending on the aggregate “significance percentage” of this Agreement and any other derivative contracts between Party A or its group of affiliated entities, if applicable, and Party B, as calculated from time to time in accordance with Item 1115 of Regulation AB.

Page 17 of 18

(ii)

If, solely while the relevant reporting requirements apply by force of law to this Transaction, DBSP or ACE determines, reasonably and in good faith, that the significance percentage of this Agreement has increased to nine (9) percent, then DBSP or ACE, as the case may be, may notify Party A on a Business Day after the date hereof of such increase in the significance percentage (such notification, a “Regulation AB Event”). DBSP and/or ACE, as applicable hereby agree with Party A to provide Party A with the calculations and any other information reasonably requested by Party A with respect to the determination that led to a Regulation AB Event.

(iii)

Upon the occurrence of a Regulation AB Event, Party A, at its own expense, shall (1) provide DBSP and ACE with the information set forth in Item 1115(b) of Regulation AB (the “Regulation AB Information”), (2) subject to Rating Agency Condition, secure another entity to replace Party A as party to this Agreement on terms substantially similar to this Agreement, which entity is able to provide the Regulation AB Information or (3) subject to Rating Agency Condition, obtain a guaranty of Party A’s obligations under this Agreement from an affiliate of Party A that is able to provide the Regulation AB Information, such that disclosure provided in respect of the affiliate will satisfy any disclosure requirements applicable to Party A, and cause such affiliate to provide the Regulation AB Information. If permitted by Regulation AB, any required Regulation AB Information may be provided by incorporation by reference from reports filed pursuant to the Securities Exchange Act. For purposes of clause (2) above, subject to Rating Agency Condition, the parties agree that National Westminster Bank Plc (“NatWest”) shall be an acceptable replacement for Party A, so long as NatWest is able to provide suitable Regulation AB Information.

(p)

Non-Recourse

Notwithstanding any provision herein or in the Master Agreement to the contrary, the obligations of Party B hereunder are limited recourse obligations of Party B, payable solely from the Supplemental Interest Trust and the proceeds thereof, in accordance with the terms of the Pooling and Servicing Agreement. In the event that the Supplemental Interest Trust and the proceeds thereof, should be insufficient to satisfy all claims outstanding and following the realization of the account held by the Supplemental Interest Trust and the proceeds thereof, any claims against or obligations of Party B under the Master Agreement or any other confirmation thereunder still outstanding shall be extinguished and thereafter not revive. The Supplemental Interest Trust Trustee shall not have liability for any failure or delay in making a payment hereunder to Party A due to any failure or delay in receiving amounts in the account held by the Supplemental Interest Trust from the trust created pursuant to the Pooling and Servicing Agreement.


	Financial Markets 280 Bishopsgate London EC2M 4RB


Memorandum	October 30, 2006

To:	HSBC Bank USA, National Association, not in its individual capacity, but solely as Trustee for the ACE Securities Corp. Home Equity Loan Trust, Series 2006-FM2, Asset Backed Pass-Through Certificates (“Party B”) 452 Fifth Avenue New York, New York 10018 Attn: Corporate Trust & Loan Agency Tel: 212-525-1309 Fax: 212-525-1300 E-Mail: fernando.acebedo@us.hsbc.com

Copy To:	Wells Fargo Bank, National Association 9062 Old Annapolis Road Columbia, Maryland 21045 Tel: 410-884-2000 Attn: Client Manager, ACE 2006-FM2 Fax: 410-715-2380

From:	The Royal Bank of Scotland plc (“Party A”) c/o RBS Financial Markets Level 7, 135 Bishopsgate London EC2M 3UR Attn: Head of Legal, Financial Markets Tel: 44 207 085 5000 Fax: 44 207 085 8411

Copy To:	Greenwich Capital Markets, Inc. 600 Steamboat Road Greenwich, CT 06830 Attn: Legal Department - Derivatives Documentation Tel.: 203-618-2576 Fax: 203-618-2533/34

Our Reference Number:	IRG16110811

Page 1 of 17

Dear Sir or Madam:

The purpose of this letter agreement is to confirm the terms and conditions of the Transaction entered into between Party A and HSBC Bank USA, National Association as trustee of the ACE Securities Corp. Home Equity Loan Trust, Series 2006-FM2 Asset Backed Pass-Through Certificates (the “Trustee” and the “Trust”, respectively) under the Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”), dated and effective as of October 1, 2006, among Ace Securities Corp., as Depositor, Countrywide Home Loans Servicing LP, as Servicer, Wells Fargo Bank, National Association, as Master Servicer and Securities Administrator and the Trustee (each a “party” and together “the parties”) on the Trade Date specified below (the “Transaction”). This letter agreement (the “Agreement”) constitutes the sole and complete “Confirmation”, as referred to in the Master Agreement (as defined below).

The definitions and provisions contained in the 2000 ISDA Definitions (the “Definitions”) as published by the International Swaps and Derivatives Association, Inc., (“ISDA”) are incorporated into this Confirmation. Any reference to a “Cap Transaction” in the Definitions is deemed to be a reference to a “Transaction” for purposes of this Agreement, and any reference to a “Transaction” in this Agreement is deemed to be a reference to a “Cap Transaction” for purposes of the Definitions. This Confirmation will be governed by and subject to the terms and conditions which would be applicable if, prior to the Trade Date, the parties had executed and delivered an ISDA Master Agreement (Multicurrency-Cross Border), in the form published by ISDA in 1992 (the “Master Agreement”) (but without any Schedule except for the elections noted in Schedule B hereto). For the avoidance of doubt, the Transaction described herein shall be the sole Transaction governed by such Master Agreement. In the event of any inconsistency between the provisions of the Master Agreement and this Confirmation, this Confirmation will govern. Terms capitalized but not defined herein or in the Definitions incorporated herein shall have the respective meanings attributed to them in the Pooling and Servicing Agreement.

(i)

Principal In the case of Party A, it is acting as principal and not as agent when entering into the Transaction and in the case of Party B, it is acting as Trustee when entering into the Transaction.

(ii)

Non-Reliance In the case of Party A, it is acting for its own account and, in the case of Party B, it is acting as Trustee, and in the case of both parties, it has made its own independent decisions to enter into the Transaction and as to whether the Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisors as it has deemed necessary and, with respect to Party B, as directed under the Pooling and Servicing Agreement. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into the Transaction; it being understood that information and explanations related to the terms and conditions of the Transaction shall not be considered investment advice or a recommendation to enter into the Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of the Transaction.

Page 2 of 17

(iii)

(iv)

Status of Parties The other party is not acting as an agent, fiduciary or advisor for it in respect of that Transaction.

2	The terms of the particular Transaction to which this Confirmation relates are as follows:

	Notional Amount:		With respect to any Calculation Period, shall equal the lesser of (1) the Notional Amount as detailed in Schedule A attached hereto and (2) the aggregate Stated Principal Balance of the Group I Mortgage Loans (together, the “Loans”) immediately preceding the Distribution Date which occurs in the calendar month of the Floating Rate Payer Payment Date for such Calculation Period (determined for this purpose without regard to any adjustment of the Floating Rate Payer Payment Date or Distribution Date relating to business days). The Securities Administrator shall make available each month, and in any event no later than five (5) business days prior to the related Floating Rate Payer Payment Date, via the Securities Administrator’s website a Distribution Date statement containing the aggregate Stated Principal Balance of the Loans as of the first day of such Calculation Period. Party A shall rely upon the statement of Stated Principal Balance of the Loans made available on the Securities Administrator’s website. The Securities Administrator’s internet website shall initially be located at www.ctslink.com and assistance in using the website can be obtained by calling the Securities Administrator’s investor relations desk at (301) 815-6600. Any payment by Party A to Party B in excess of the amount due under this Transaction on any Floating Rate Payer Payment Date shall be promptly returned by Party B to Party A and Party B shall promptly notify Party A after Party B is aware of such overpayment. Other than the return of such overpayment, neither party shall incur any penalty or liability hereunder with respect to such overpayment.

	Trade Date:		October 20, 2006

	Effective Date:		October 30, 2006

	Termination Date:		April 25, 2007, subject to adjustment in accordance with the Business Day Convention.

	Fixed Amount:

	Fixed Rate Payer:		Party B

	Fixed Rate Payer Payment Date:		October 30, 2006

Page 3 of 17

	Fixed Amount:		USD 1000.00

	Floating Amounts:

	Floating Rate Payer:		Party A

	Cap Rate:		7.50%

	Floating Rate Payer Period End Dates:		The 25th calendar day of each month of each year, commencing November 25, 2006, through and including the Termination Date, subject to adjustment in accordance with the Business Day Convention.

	Floating Rate Payer Payment Dates:		Early Payment shall be applicable. The Floating Rate Payer Payment Dates shall be one (1) Business Day prior to each Floating Rate Payer Period End Date, subject to adjustment in accordance with the Business Day Convention.

	Floating Rate Option:		USD-LIBOR-BBA

	Floating Amount		To be determined in accordance with the following formula: the greater of (i) (Floating Rate Option - Cap Rate) * Notional Amount * Floating Rate Day Count Fraction and (ii) zero.

	Designated Maturity:		One month.

	Floating Rate Day Count Fraction:		Actual/360

	Reset Dates:		First day of each Calculation Period

	Compounding:		Inapplicable

	Business Days:		New York

	Business Day Convention:		Following

	Calculation Agent:		Party A

3	Recording of Conversations

4	Account Details:

Account for payments to Party A:

For the account of The Royal Bank of Scotland Financial Markets Fixed Income and Interest Rate Derivative Operations, London SWIFT RBOSGB2RTCM with JPMorgan Chase Bank, New York CHASUS33, ABA # 021000021

Account Number 400930153

Page 4 of 17

Account for payments to Party B:

Wells Fargo Bank, NA

ABA # 121000248

Account Name: SAS Clearing Account #3970771416

FFC to: 50960801, ACE 2006-FM2 Reserve Fund

5	Offices:

The Office of Party A for this Transaction is:	London

The Office of Party B for this Transaction is:	New York

6	Other Provisions:

6.1

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

Page 5 of 17

Please promptly confirm that the foregoing correctly sets forth the terms of the Transaction entered into between us by executing this Confirmation and returning it to us by facsimile to:

The Royal Bank of Scotland plc

Attention: Derivatives Documentation

Fax: 0207 375 6724 / 6486 Phone: 0207 375 4225

THE ROYAL BANK OF SCOTLAND PLC

By: Greenwich Capital Markets, Inc., its agent

Name:

Title:

Accepted and confirmed as of the Trade Date written above:

Name:

Title:

Page 6 of 17

Schedule A to the Confirmation dated as of October 30, 2006

Re: Reference Number IRG16110811

Amortization Schedule, all such dates subject to adjustment in accordance with the Business Day Convention

From and Including	To but Excluding	Notional Amount (USD)
10/30/2006	11/25/2006	416,269,888.00
11/25/2006	12/25/2006	411,432,342.00
12/25/2006	1/25/2007	405,884,625.00
1/25/2007	2/25/2007	399,639,710.00
2/25/2007	3/25/2007	392,714,350.00
3/25/2007	4/25/2007	385,129,077.00

Page 7 of 17

Schedule B to the Confirmation dated as of October 30, 2006

Re: Reference Number IRG16110811

Between The Royal Bank of Scotland plc (“Party A”) and HSBC Bank USA, National Association, not in its individual capacity, but solely as Trustee for the ACE Securities Corp. Home Equity Loan Trust, Series 2006-FM2, Asset Backed Pass-Through Certificates (“Party B”)

Part. 1 Termination Provisions

(a)

“Specified Entity” means in relation to Party A for the purpose of the Master Agreement:

Section 5(a)(v): none.

Section 5(a)(vi): none.

Section 5(a)(vii): none.

Section 5(b)(iv): none.

and in relation to Party B for the purpose of the Master Agreement:

Section 5(a)(v): none.

Section 5(a)(vi): none.

Section 5(a)(vii): none.

Section 5(b)(iv): none.

(b)

“Specified Transaction” is not applicable to Party A or Party B for any purpose, and accordingly, Section 5(a)(v) of the Master Agreement shall not apply to Party A or Party B.

(c)

The “Breach of Agreement” provisions of Section 5(a)(ii) of the Master Agreement will be inapplicable to Party A and Party B.

(d)

The “Credit Support Default” provisions of Section 5(a)(iii) of the Master Agreement will be inapplicable to Party A and Party B.

(e)

The “Misrepresentation” provisions of Section 5(a)(iv) of the Master Agreement will be inapplicable to Party A and Party B.

(f)

The “Default Under Specified Transaction” provisions of Section 5(a)(v) of the Master Agreement will be inapplicable to Party A and Party B.

(g)

The “Cross Default” provisions of Section 5(a)(vi) of the Master Agreement will be inapplicable to Party A and Party B.

(h)

The “Bankruptcy” provision of Section 5(a)(vii)(2) of the Master Agreement will be inapplicable to Party B.

(i)

The “Merger Without Assumption” provision of Section 5(a)(viii) will not apply to Party B.

Page 8 of 17

(j)

The “Credit Event Upon Merger” provisions of Section 5(b)(iv) of the Master Agreement will be inapplicable to Party A and Party B.

(k)

(l)

Payments on Early Termination For the purpose of Section 6(e) of the Master Agreement:

(i)

Market Quotation will apply; and

(ii)

The Second Method will apply.

(m)

“Termination Currency” means United States Dollars.

Part. 2 Tax Representations

Payer Representations For the purpose of Section 3(e) of the Master Agreement, each of Party A and Party B will make the following representation:

Page 9 of 17

Payee Representations For the purpose of Section 3(f) of the Master Agreement, Party A and Party B make the following representations:

(i)

Party A represents that

(A)

it is a tax resident of the United Kingdom;

(B)

it is a "foreign person" within the meaning of the applicable U.S. Treasury Regulations concerning information reporting and backup withholding tax (as in effect on January 1, 2001), unless Party A provides written notice to Party B that it is no longer a foreign person;

(C)

in respect of each Transaction it enters into through an office or discretionary agent in the United States or which otherwise is allocated (in whole or part) for United States federal income tax purposes to such United States trade or business, each payment received or to be received by it under such Transaction (or portion thereof, if applicable) will be effectively connected with its conduct of a trade or business in the United States; and

(D)

in respect of all other Transactions or portions thereof, no such payment received or to be received by it in connection with this Agreement is attributable to a trade or business carried on by it through a permanent establishment in the United States.

(ii)

Party B represents that it is the Trustee of the Trust created under the Pooling and Servicing Agreement.

Part. 3 Agreement to Deliver Documents

For the purpose of Sections 4(a)(i) and (ii) of the Master Agreement, Party A and Party B agree to deliver the following documents, as applicable:

(a)

Tax forms, documents or certificates to be delivered are:

Party Required to Deliver Document	Form/Document/Certificate	Date by Which to be Delivered

Party A and Party B	Any form or document required or reasonably requested to allow the other party to make payments under the Agreement without any deduction or withholding for or on account of any Tax, or with such deduction or withholding at a reduced rate.	Promptly upon reasonable demand by the other party.

Page 10 of 17

(b)

Other documents to be delivered and covered by the Section 3(d) representation are:--

Party required to deliver	Form/Document/or Certificate	Date by which to be delivered	Covered by Section 3(d) representation

Party A and Party B	Incumbency Certificate (or, if available the current authorized signature book or equivalent authorizing documentation) specifying the names, titles, authority and specimen signatures of the persons authorized to execute the Confirmation which sets forth the specimen signatures of each signatory to the Confirmation signing on its behalf.	Concurrently with the execution and delivery of the Confirmation unless previously delivered and still in full force and effect.	Yes

Party B	The Pooling and Servicing Agreement	Concurrently with the execution and delivery of the Confirmation.	No

Party A	Legal opinion[s] with respect to Party A and its Credit Support Provider, if any, reasonably satisfactory in form and substance to Party B to the enforceability of Party A’s obligation under this Agreement.	Upon the execution and delivery of this Agreement and any Confirmation	No

Part. 4 Miscellaneous

(a)

Addresses for Notices For the purposes of Section 12(a) of the Master Agreement:

Addresses for notices or communications to Party A and to Party B shall be those set forth on the first page of the Confirmation.

Page 11 of 17

(b)

Process Agent For the purpose of Section 13(c) of the Master Agreement:

Party A appoints as its Process Agent: none.

Party B appoints as its Process Agent: none.

(c)

Offices With respect to Party A, the provisions of Section 10(a) of the Master Agreement will apply.

(d)

Multibranch Party For the purpose of Section 10(c) of the Master Agreement:

Party A is not a Multibranch Party.

Party B is not a Multibranch Party.

(e)

Calculation Agent The Calculation Agent is Party A.

(f)

Credit Support Document

Party B: None

(g)

Credit Support Provider

Credit Support Provider means in relation to Party B: none.

(h)

(i)

Netting of Payments Subparagraph (ii) of Section 2(c) of the Master Agreement will apply to the Transaction evidenced by the Confirmation.

(j)

“Affiliate” Party B shall be deemed to have no Affiliates for purposes of this Transaction.

(k)

Part. 5 Other Provisions

(a)

Modifications to the Agreement Section 3(a) of the Master Agreement shall be amended to include the following additional representations after paragraph 3(a)(v):

Page 12 of 17

(b)

(c)

Absence of Litigation In Section 3(c) of the Master Agreement the words “or any of its Affiliates” shall be deleted.

(d)

Tax Event In Section 5(b)(ii)(y) of the Master Agreement the words “, or there is a substantial likelihood that it will,” shall be deleted.

(e)

Transfer and Amendment

(f)

Trustee Capacity

It is expressly understood and agreed by the parties hereto that insofar as this Confirmation is executed by the Trustee (i) this Confirmation is executed and delivered by HSBC Bank USA, National Association, not in its individual capacity but solely as Trustee of the Trust created under the Pooling and Servicing Agreement in the exercise of the powers and authority conferred and vested in it thereunder (ii) each of the representations, undertakings and agreements herein made on behalf of the Trust is made and intended not as personal representations of the Trustee but is made and intended for the purpose of binding only the Trust created under the Pooling and Servicing Agreement, and (iii) under no circumstances will HSBC Bank USA, National Association in its individual capacity be personally liable for the payment of any indebtedness or expenses or be personally liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken under this Confirmation.

(g)

Proceedings

Party A shall not institute against or cause any other person to institute against, or join any other person in instituting against, Party B or the Trust, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any federal or state bankruptcy, dissolution or similar law, for a period of one year and one day (or, if longer, the applicable preference period) following indefeasible payment in full of the Certificates, provided that nothing herein shall preclude, or be deemed to estop Party A from taking any action in any case or proceeding voluntarily filed or commenced by or on behalf of Party B or in any involuntary case or proceeding after it has been commenced. This provision shall survive the termination of this Agreement.

Page 13 of 17

(h)

Set-off

(i)

Section 1(c)

For purposes of Section 1(c) of the Master Agreement, this Transaction shall be the sole Transaction under the Agreement.

(j)

Rating Agency Downgrade

If a Ratings Event (as defined below) occurs with respect to Party A (or any applicable credit support provider), then Party A shall, within (30) days of such Ratings Event subject to the Rating Agency Condition (as hereinafter defined) and at its own expense (unless, within 30 days of such Ratings Event, each of S&P and Moody’s has reconfirmed the rating of the Certificates which was in effect immediately prior to such Ratings Event), (i) assign this Transaction hereunder to a third party that meets or exceeds, or as to which any applicable credit support provider of such third party meets or exceeds, the Approved Ratings Thresholds (as defined below) on terms substantially similar to this Confirmation, (ii) obtain a guaranty of Party A’s obligations under this Transaction from a third party that meets or exceeds the Approved Ratings Threshold, in form and substance, (iii) post collateral, or (iv) establish any other arrangement, which will be sufficient to restore the immediately prior ratings of the Certificates. For purposes of this Transaction, a “Ratings Event” shall occur with respect to Party A (or any applicable credit support provider), if its short-term unsecured and unsubordinated debt ceases to be rated at least “A-1” by S&P or its short-term unsecured and unsubordinated debt ceases to be rated at least “P-1” by Moody’s or its long-term unsecured and unsubordinated debt ceases to be rated at least “A1” by Moody’s (including in connection with a merger, consolidation or other similar transaction by Party A or any applicable credit support provider) such ratings being referred to herein as the “Approved Ratings Thresholds.” If a Further Ratings Event (as defined below) occurs with respect to Party A (or any applicable credit support provider), then Party A shall, within (10) days of such Further Ratings Event subject to the Rating Agency Condition (as hereinafter defined) and at its own expense (unless, within 10 days of such Ratings Event, S&P has reconfirmed the rating of the Certificates which was in effect immediately prior to such Further Ratings Event), (i) assign this Transaction hereunder to a third party that meets or exceeds, or as to which any applicable credit support provider of such third party meets or exceeds, the Approved Ratings Thresholds on terms substantially similar to this Confirmation or (ii) obtain a guaranty of Party A’s obligations under this Transaction from a third party that meets or exceeds the Approved Ratings Thresholds. For purposes of this Transaction, a “Further Ratings Event” shall occur with respect to Party A (or any applicable credit support provider), if its long-term unsecured and unsubordinated debt ceases to be rated at least “BBB-” by S&P or its short-term unsecured and unsubordinated debt ceases to be rated at least “P-1” on watch for downgrade by Moody’s or its long-term unsecured and unsubordinated debt ceases to be rated at least “A2” on watch for downgrade by Moody’s (including in connection with a merger, consolidation or other similar transaction by Party A or any applicable credit support provider). "Rating Agency Condition" means, with respect to any particular proposed act or omission to act hereunder that the party acting or failing to act must consult with each Rating Agency then providing a rating of the Certificates and receive from each Rating Agency a prior written confirmation that the proposed action or inaction would not cause a downgrade or withdrawal of the then-current rating of the Certificates.

Page 14 of 17

(k)

Additional Termination Events

Additional Termination Events will apply as specified below:

The occurrence of the following shall constitute an Additional Termination Event:

If, at any time, the Master Servicer purchases the Mortgage Loans pursuant to Section 10.01 of the Pooling and Servicing Agreement, then an Additional Termination Event shall have occurred and Party B shall be the sole Affected Party with respect thereto; provided, however, that notwithstanding Section 6(b)(iv) of the Master Agreement, only Party B shall have the right to designate an Early Termination Date in respect of this Additional Termination Event; provided, further, that the Early Termination Date shall not be prior to the Optional Termination Date.

(l)

Amendment to ISDA Form

(m)

Severability

Page 15 of 17

(n)

[Reserved]

(o)

Compliance with Regulation AB

(i)

(ii)

(iii)

Page 16 of 17

(p)

Limitation on Events of Default

Notwithstanding the terms of Sections 5 and 6 of the Master Agreement, if at any time and so long as Party B has satisfied in full all its payment obligations under Section 2(a)(i) of the Master Agreement and has at the time no future payment obligations, whether absolute or contingent, under such Section, then unless Party A is required pursuant to appropriate proceedings to return to Party B or otherwise returns to Party B upon demand of Party B any portion of any such payment, (a) the occurrence of an event described in Section 5(a) of the Master Agreement with respect to Party B shall not constitute an Event of Default or Potential Event of Default with respect to Party B as Defaulting Party and (b) Party A shall be entitled to designate an Early Termination Date pursuant to Section 6 of the Master Agreement only as a result of the occurrence of a Termination Event set forth in either Section 5(b)(i) or 5(b)(ii) of the Master Agreement with respect to Party A as the Affected Party, or Section 5(b)(iii) with respect to Party A as the Burdened Party. For purposes of the Transaction to which this Agreement relates, Party B’s only obligation under Section 2(a)(i) of the Master Agreement is to pay the Fixed Amount on the Fixed Rate Payer Payment Date.


	Financial Markets 280 Bishopsgate London EC2M 4RB


Memorandum	October 30, 2006

To:	HSBC Bank USA, National Association, not in its individual capacity, but solely as Trustee for the ACE Securities Corp. Home Equity Loan Trust, Series 2006-FM2, Asset Backed Pass-Through Certificates (“Party B”) 452 Fifth Avenue New York, New York 10018 Attn: Corporate Trust & Loan Agency Tel: 212-525-1309 Fax: 212-525-1300 E-Mail: fernando.acebedo@us.hsbc.com

Copy To:	Wells Fargo Bank, National Association 9062 Old Annapolis Road Columbia, Maryland 21045 Tel: 410-884-2000 Attn: Client Manager, ACE 2006-FM2 Fax: 410-715-2380

From:	The Royal Bank of Scotland plc (“Party A”) c/o RBS Financial Markets Level 7, 135 Bishopsgate London EC2M 3UR Attn: Head of Legal, Financial Markets Tel: 44 207 085 5000 Fax: 44 207 085 8411

Copy To:	Greenwich Capital Markets, Inc. 600 Steamboat Road Greenwich, CT 06830 Attn: Legal Department - Derivatives Documentation Tel.: 203-618-2576 Fax: 203-618-2533/34

Our Reference Number:	IRG16110812

Page 1 of 17

Dear Sir or Madam:

The definitions and provisions contained in the 2000 ISDA Definitions (the “Definitions”) as published by the International Swaps and Derivatives Association, Inc., (“ISDA”) are incorporated into this Confirmation. Any reference to a “Cap Transaction” in the Definitions is deemed to be a reference to a “Transaction” for purposes of this Agreement, and any reference to a “Transaction” in this Agreement is deemed to be a reference to a “Cap Transaction” for purposes of the Definitions. This Confirmation will be governed by and subject to the terms and conditions which would be applicable if, prior to the Trade Date, the parties had executed and delivered an ISDA Master Agreement (Multicurrency-Cross Border), in the form published by ISDA in 1992 (the “Master Agreement”) (but without any Schedule except for the elections noted in Schedule B hereto). For the avoidance of doubt, the Transaction described herein shall be the sole Transaction governed by such Master Agreement. In the event of any inconsistency between the provisions of the Master Agreement and this Confirmation, this Confirmation will govern. Terms capitalized but not defined herein or in the Definitions incorporated herein shall have the respective meanings attributed to them in the Pooling and Servicing Agreement.

(i)

(ii)

Page 2 of 17

(iii)

(iv)

Status of Parties The other party is not acting as an agent, fiduciary or advisor for it in respect of that Transaction.

2	The terms of the particular Transaction to which this Confirmation relates are as follows:

	Notional Amount:		With respect to any Calculation Period, shall equal the lesser of (1) the Notional Amount as detailed in Schedule A attached hereto and (2) the aggregate Stated Principal Balance of the Group II Mortgage Loans (together, the “Loans”) immediately preceding the Distribution Date which occurs in the calendar month of the Floating Rate Payer Payment Date for such Calculation Period (determined for this purpose without regard to any adjustment of the Floating Rate Payer Payment Date or Distribution Date relating to business days). The Securities Administrator shall make available each month, and in any event no later than five (5) business days prior to the related Floating Rate Payer Payment Date, via the Securities Administrator’s website a Distribution Date statement containing the aggregate Stated Principal Balance of the Loans as of the first day of such Calculation Period. Party A shall rely upon the statement of Stated Principal Balance of the Loans made available on the Securities Administrator’s website. The Securities Administrator’s internet website shall initially be located at www.ctslink.com and assistance in using the website can be obtained by calling the Securities Administrator’s investor relations desk at (301) 815-6600. Any payment by Party A to Party B in excess of the amount due under this Transaction on any Floating Rate Payer Payment Date shall be promptly returned by Party B to Party A and Party B shall promptly notify Party A after Party B is aware of such overpayment. Other than the return of such overpayment, neither party shall incur any penalty or liability hereunder with respect to such overpayment.

	Trade Date:		October 20, 2006

	Effective Date:		October 30, 2006

	Termination Date:		April 25, 2007, subject to adjustment in accordance with the Business Day Convention.

	Fixed Amount:

	Fixed Rate Payer:		Party B

	Fixed Rate Payer Payment Date:		October 30, 2006

Page 3 of 17

	Fixed Amount:		USD 1000.00

	Floating Amounts:

	Floating Rate Payer:		Party A

	Cap Rate:		7.50%

	Floating Rate Payer Period End Dates:		The 25th calendar day of each month of each year, commencing November 25, 2006, through and including the Termination Date, subject to adjustment in accordance with the Business Day Convention.

	Floating Rate Payer Payment Dates:		Early Payment shall be applicable. The Floating Rate Payer Payment Dates shall be one (1) Business Day prior to each Floating Rate Payer Period End Date, subject to adjustment in accordance with the Business Day Convention.

	Floating Rate Option:		USD-LIBOR-BBA

	Floating Amount		To be determined in accordance with the following formula: the greater of (i) (Floating Rate Option - Cap Rate) * Notional Amount * Floating Rate Day Count Fraction and (ii) zero.

	Designated Maturity:		One month.

	Floating Rate Day Count Fraction:		Actual/360

	Reset Dates:		First day of each Calculation Period

	Compounding:		Inapplicable

	Business Days:		New York

	Business Day Convention:		Following

	Calculation Agent:		Party A

3	Recording of Conversations

4	Account Details:

Account for payments to Party A:

Account Number 400930153

Page 4 of 17

Account for payments to Party B:

Wells Fargo Bank, NA

ABA # 121000248

Account Name: SAS Clearing Account #3970771416

FFC to: 50960801, ACE 2006-FM2 Reserve Fund

5	Offices:

The Office of Party A for this Transaction is:	London

The Office of Party B for this Transaction is:	New York

6	Other Provisions:

6.1

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

Page 5 of 17

Please promptly confirm that the foregoing correctly sets forth the terms of the Transaction entered into between us by executing this Confirmation and returning it to us by facsimile to:

The Royal Bank of Scotland plc

Attention: Derivatives Documentation

Fax: 0207 375 6724 / 6486 Phone: 0207 375 4225

THE ROYAL BANK OF SCOTLAND PLC

By: Greenwich Capital Markets, Inc., its agent

Name:

Title:

Accepted and confirmed as of the Trade Date written above:

Name:

Title:

Page 6 of 17

Schedule A to the Confirmation dated as of October 30, 2006

Re: Reference Number IRG16110812

Amortization Schedule, all such dates subject to adjustment in accordance with the Business Day Convention

From and Including	To but Excluding	Notional Amount (USD)
10/30/2006	11/25/2006	461,298,832.00
11/25/2006	12/25/2006	455,952,947.00
12/25/2006	1/25/2007	449,817,875.00
1/25/2007	2/25/2007	442,907,908.00
2/25/2007	3/25/2007	435,241,550.00
3/25/2007	4/25/2007	426,841,510.00

Page 7 of 17

Schedule B to the Confirmation dated as of October 30, 2006

Re: Reference Number IRG16110812

Part. 1 Termination Provisions

(a)

“Specified Entity” means in relation to Party A for the purpose of the Master Agreement:

Section 5(a)(v): none.

Section 5(a)(vi): none.

Section 5(a)(vii): none.

Section 5(b)(iv): none.

and in relation to Party B for the purpose of the Master Agreement:

Section 5(a)(v): none.

Section 5(a)(vi): none.

Section 5(a)(vii): none.

Section 5(b)(iv): none.

(b)

“Specified Transaction” is not applicable to Party A or Party B for any purpose, and accordingly, Section 5(a)(v) of the Master Agreement shall not apply to Party A or Party B.

(c)

The “Breach of Agreement” provisions of Section 5(a)(ii) of the Master Agreement will be inapplicable to Party A and Party B.

(d)

The “Credit Support Default” provisions of Section 5(a)(iii) of the Master Agreement will be inapplicable to Party A and Party B.

(e)

The “Misrepresentation” provisions of Section 5(a)(iv) of the Master Agreement will be inapplicable to Party A and Party B.

(f)

The “Default Under Specified Transaction” provisions of Section 5(a)(v) of the Master Agreement will be inapplicable to Party A and Party B.

(g)

The “Cross Default” provisions of Section 5(a)(vi) of the Master Agreement will be inapplicable to Party A and Party B.

(h)

The “Bankruptcy” provision of Section 5(a)(vii)(2) of the Master Agreement will be inapplicable to Party B.

(i)

The “Merger Without Assumption” provision of Section 5(a)(viii) will not apply to Party B.

Page 8 of 17

(j)

The “Credit Event Upon Merger” provisions of Section 5(b)(iv) of the Master Agreement will be inapplicable to Party A and Party B.

(k)

(l)

Payments on Early Termination For the purpose of Section 6(e) of the Master Agreement:

(i)

Market Quotation will apply; and

(ii)

The Second Method will apply.

(m)

“Termination Currency” means United States Dollars.

Part. 2 Tax Representations

Payer Representations For the purpose of Section 3(e) of the Master Agreement, each of Party A and Party B will make the following representation:

Page 9 of 17

Payee Representations For the purpose of Section 3(f) of the Master Agreement, Party A and Party B make the following representations:

(i)

Party A represents that

(A)

it is a tax resident of the United Kingdom;

(B)

(C)

(D)

(ii)

Party B represents that it is the Trustee of the Trust created under the Pooling and Servicing Agreement.

Part. 3 Agreement to Deliver Documents

For the purpose of Sections 4(a)(i) and (ii) of the Master Agreement, Party A and Party B agree to deliver the following documents, as applicable:

(a)

Tax forms, documents or certificates to be delivered are:

Party Required to Deliver Document	Form/Document/Certificate	Date by Which to be Delivered

Party A and Party B	Any form or document required or reasonably requested to allow the other party to make payments under the Agreement without any deduction or withholding for or on account of any Tax, or with such deduction or withholding at a reduced rate.	Promptly upon reasonable demand by the other party.

Page 10 of 17

(b)

Other documents to be delivered and covered by the Section 3(d) representation are:

Party required to deliver	Form/Document/or Certificate	Date by which to be delivered	Covered by Section 3(d) representation

Party A and Party B	Incumbency Certificate (or, if available the current authorized signature book or equivalent authorizing documentation) specifying the names, titles, authority and specimen signatures of the persons authorized to execute the Confirmation which sets forth the specimen signatures of each signatory to the Confirmation signing on its behalf.	Concurrently with the execution and delivery of the Confirmation unless previously delivered and still in full force and effect.	Yes

Party B	The Pooling and Servicing Agreement	Concurrently with the execution and delivery of the Confirmation.	No

Party A	Legal opinion[s] with respect to Party A and its Credit Support Provider, if any, reasonably satisfactory in form and substance to Party B to the enforceability of Party A’s obligation under this Agreement.	Upon the execution and delivery of this Agreement and any Confirmation	No

Part. 4 Miscellaneous

(a)

Addresses for Notices For the purposes of Section 12(a) of the Master Agreement:

Addresses for notices or communications to Party A and to Party B shall be those set forth on the first page of the Confirmation.

Page 11 of 17

(b)

Process Agent For the purpose of Section 13(c) of the Master Agreement:

Party A appoints as its Process Agent: none.

Party B appoints as its Process Agent: none.

(c)

Offices With respect to Party A, the provisions of Section 10(a) of the Master Agreement will apply.

(d)

Multibranch Party For the purpose of Section 10(c) of the Master Agreement:

Party A is not a Multibranch Party.

Party B is not a Multibranch Party.

(e)

Calculation Agent The Calculation Agent is Party A.

(f)

Credit Support Document

Party B: None

(g)

Credit Support Provider

Credit Support Provider means in relation to Party B: none.

(h)

(i)

Netting of Payments Subparagraph (ii) of Section 2(c) of the Master Agreement will apply to the Transaction evidenced by the Confirmation.

(j)

“Affiliate” Party B shall be deemed to have no Affiliates for purposes of this Transaction.

(k)

Part. 5 Other Provisions

(a)

Modifications to the Agreement Section 3(a) of the Master Agreement shall be amended to include the following additional representations after paragraph 3(a)(v):

Page 12 of 17

(b)

(c)

Absence of Litigation In Section 3(c) of the Master Agreement the words “or any of its Affiliates” shall be deleted.

(d)

Tax Event In Section 5(b)(ii)(y) of the Master Agreement the words “, or there is a substantial likelihood that it will,” shall be deleted.

(e)

Transfer and Amendment

(f)

Trustee Capacity

(g)

Proceedings

Page 13 of 17

(h)

Set-off

(i)

Section 1(c)

For purposes of Section 1(c) of the Master Agreement, this Transaction shall be the sole Transaction under the Agreement.

(j)

Rating Agency Downgrade

If a Ratings Event (as defined below) occurs with respect to Party A (or any applicable credit support provider), then Party A shall, within (30) days of such Ratings Event subject to the Rating Agency Condition (as hereinafter defined) and at its own expense (unless, within 30 days of such Ratings Event, each of S&P and Moody’s has reconfirmed the rating of the Certificates which was in effect immediately prior to such Ratings Event), (i) assign this Transaction hereunder to a third party that meets or exceeds, or as to which any applicable credit support provider of such third party meets or exceeds, the Approved Ratings Thresholds (as defined below) on terms substantially similar to this Confirmation, (ii) obtain a guaranty of Party A’s obligations under this Transaction from a third party that meets or exceeds the Approved Ratings Threshold, in form and substance, (iii) post collateral, or (iv) establish any other arrangement, which will be sufficient to restore the immediately prior ratings of the Certificates. For purposes of this Transaction, a “Ratings Event” shall occur with respect to Party A (or any applicable credit support provider), if its short-term unsecured and unsubordinated debt ceases to be rated at least “A-1” by S&P or its short-term unsecured and unsubordinated debt ceases to be rated at least “P-1” by Moody’s or its long-term unsecured and unsubordinated debt ceases to be rated at least “A1” by Moody’s (including in connection with a merger, consolidation or other similar transaction by Party A or any applicable credit support provider) such ratings being referred to herein as the “Approved Ratings Thresholds.” If a Further Ratings Event (as defined below) occurs with respect to Party A (or any applicable credit support provider), then Party A shall, within (10) days of such Further Ratings Event subject to the Rating Agency Condition (as hereinafter defined) and at its own expense (unless, within 10 days of such Ratings Event, S&P has reconfirmed the rating of the Certificates which was in effect immediately prior to such Further Ratings Event), (i) assign this Transaction hereunder to a third party that meets or exceeds, or as to which any applicable credit support provider of such third party meets or exceeds, the Approved Ratings Thresholds on terms substantially similar to this Confirmation or (ii) obtain a guaranty of Party A’s obligations under this Transaction from a third party that meets or exceeds the Approved Ratings Thresholds. For purposes of this Transaction, a “Further Ratings Event” shall occur with respect to Party A (or any applicable credit support provider), if its long-term unsecured and unsubordinated debt ceases to be rated at least “BBB-” by S&P or its short-term unsecured and unsubordinated debt ceases to be rated at least “P-1” on watch for downgrade by Moody’s or its long-term unsecured and unsubordinated debt ceases to be rated at least “A2” on watch for downgrade by Moody’s (including in connection with a merger, consolidation or other similar transaction by Party A or any applicable credit support provider). "Rating Agency Condition" means, with respect to any particular proposed act or omission to act hereunder that the party acting or failing to act must consult with each Rating Agency then providing a rating of the Certificates and receive from each Rating Agency a prior written confirmation that the proposed action or inaction would not cause a downgrade or withdrawal of the then-current rating of the Certificates.

Page 14 of 17

(k)

Additional Termination Events

Additional Termination Events will apply as specified below:

The occurrence of the following shall constitute an Additional Termination Event:

If, at any time, the Master Servicer purchases the Mortgage Loans pursuant to Section 10.01 of the Pooling and Servicing Agreement, then an Additional Termination Event shall have occurred and Party B shall be the sole Affected Party with respect thereto; provided, however, that notwithstanding Section 6(b)(iv) of the Master Agreement, only Party B shall have the right to designate an Early Termination Date in respect of this Additional Termination Event; provided, further, that the Early Termination Date shall not be prior to the Optional Termination Date.

(l)

Amendment to ISDA Form

(m)

Severability

Page 15 of 17

(n)

[Reserved]

(o)

Compliance with Regulation AB

(i)

(ii)

(iii)

Page 16 of 17

(p)

Limitation on Events of Default

Page 17 of 17

Delaware	333-131727-17	56-2088493
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

6525 Morrison Blvd., Suite 318, Charlotte, North Carolina	28211
(Address of Principal Executive Offices)	(Zip Code)

Class	Initial Certificate Principal Balance⁽¹⁾	Pass-Through Rate
A-1	$ 331,351,000	One-Month LIBOR + 0.14%⁽²⁾⁽³⁾
A-2A	$ 198,788,000	One-Month LIBOR + 0.05%⁽²⁾⁽³⁾
A-2B	$ 64,214,000	One-Month LIBOR + 0.12%⁽²⁾⁽³⁾
A-2C	$ 48,772,000	One-Month LIBOR + 0.16%⁽²⁾⁽³⁾
A-2D	$ 55,420,000	One-Month LIBOR + 0.22%⁽²⁾⁽³⁾
M-1	$ 40,368,000	One-Month LIBOR + 0.25%⁽²⁾⁽³⁾
M-2	$ 32,031,000	One-Month LIBOR + 0.32%⁽²⁾⁽³⁾
M-3	$ 16,235,000	One-Month LIBOR + 0.36%⁽²⁾⁽³⁾
M-4	$ 13,602,000	One-Month LIBOR + 0.39%⁽²⁾⁽³⁾
M-5	$ 13,164,000	One-Month LIBOR + 0.41%⁽²⁾⁽³⁾
M-6	$ 8,776,000	One-Month LIBOR + 0.48%⁽²⁾⁽³⁾
M-7	$ 9,653,000	One-Month LIBOR + 0.82%⁽²⁾⁽³⁾
M-8	$ 6,582,000	One-Month LIBOR + 1.20%⁽²⁾⁽³⁾
M-9	$ 11,408,000	One-Month LIBOR + 2.10%⁽²⁾⁽³⁾

Exhibit No.	Description
4.1	Pooling and Servicing Agreement, dated as of October 1, 2006, by and among ACE Securities Corp., as Depositor, Wells Fargo Bank, National Association, as Master Servicer and Securities Administrator, Countrywide Home Loans Servicing LP, as Servicer and HSBC Bank USA, National Association, as Trustee relating to the Series 2006-FM2 Certificates.


	ACE SECURITIES CORP.

	By:	/s/ Evelyn Echevarria
		Name: Evelyn Echevarria
		Title: Vice President


	By:	/s/ Doris J. Hearn
		Name: Doris J. Hearn
		Title: Vice President

Exhibit No.	Description	Sequentially Numbered Page

4.1	Pooling and Servicing Agreement, dated as of October 1, 2006, by and among ACE Securities Corp., as Depositor, Wells Fargo Bank, National Association, as Master Servicer and Securities Administrator, Countrywide Home Loans Servicing LP, as Servicer and HSBC Bank USA, National Association, as Trustee relating to the Series 2006-FM2 Certificates.	7

ARTICLE I	DEFINITIONS	9
SECTION 1.01.	Defined Terms.	9
SECTION 1.02.	Allocation of Certain Interest Shortfalls.	85
ARTICLE II	CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES	88
SECTION 2.01.	Conveyance of the Mortgage Loans.	88
SECTION 2.02.	Acceptance of REMIC I by Trustee.	89
SECTION 2.03.	Repurchase or Substitution of Mortgage Loans.	89
SECTION 2.04.	Representations and Warranties of the Master Servicer.	92
SECTION 2.05.	Representations, Warranties and Covenants of the Servicer.	94
SECTION 2.06.	Issuance of the REMIC I Regular Interests and the Class R-I Interest.	96
SECTION 2.07.	Conveyance of the REMIC I Regular Interests; Acceptance of REMIC II and REMIC III by the Trustee.	96
SECTION 2.08.	Issuance of the Residual Certificates.	97
SECTION 2.09.	Establishment of the Trust.	97
SECTION 2.10.	Purpose and Powers of the Trust.	97
SECTION 2.11.	Representations and Warranties of the Trustee.	98
ARTICLE III	ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS	99
SECTION 3.01.	The Servicer to Act as Servicer.	99
SECTION 3.02.	Sub-Servicing Agreements Between the Servicer and Sub-Servicers.	102
SECTION 3.03.	Successor Sub-Servicers.	103
SECTION 3.04.	No Contractual Relationship Between Sub-Servicer, Subcontractor, Master Servicer, Trustee or the Certificateholders.	103
SECTION 3.05.	Assumption or Termination of Sub-Servicing Agreement by Successor Servicer.	104
SECTION 3.06.	Collection of Certain Mortgage Loan Payments.	104
SECTION 3.07.	Collection of Taxes, Assessments and Similar Items; Servicing Accounts.	105
SECTION 3.08.	Collection Account and Distribution Account.	106
SECTION 3.09.	Withdrawals from the Collection Account and Distribution Account.	108
SECTION 3.10.	Investment of Funds in the Investment Accounts.	110
SECTION 3.11.	Maintenance of Hazard Insurance, Errors and Omissions and Fidelity Coverage and Primary Mortgage Insurance.	112
SECTION 3.12.	Enforcement of Due-on-Sale Clauses; Assumption Agreements.	114
SECTION 3.13.	Realization Upon Defaulted Mortgage Loans.	115
SECTION 3.14.	Trustee to Cooperate; Release of Mortgage Files.	117
SECTION 3.15.	Servicing Compensation.	119
SECTION 3.16.	Collection Account Statements.	119
SECTION 3.17.	Annual Statement as to Compliance.	119

SECTION 3.18.	Assessments of Compliance and Attestation Reports.	120
SECTION 3.19.	Annual Certification; Indemnification and Remedies; Additional Information.	121
SECTION 3.20.	Access to Certain Documentation.	125
SECTION 3.21.	Title, Management and Disposition of REO Property.	125
SECTION 3.22.	Obligations of the Servicer in Respect of Prepayment Interest Shortfalls; Relief Act Interest Shortfalls.	128
SECTION 3.23.	Obligations of the Servicer in Respect of Mortgage Rates and Monthly Payments.	129
SECTION 3.24.	Reserve Fund.	129
SECTION 3.25.	Advance Facility.	131
SECTION 3.26.	Indemnification.	133
SECTION 3.27.	Additional Representations and Warranties.	133
ARTICLE IV	ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS BY THE MASTER SERVICER	135
SECTION 4.01.	Master Servicer.	135
SECTION 4.02.	REMIC-Related Covenants.	136
SECTION 4.03.	Monitoring of Servicer.	136
SECTION 4.04.	Fidelity Bond.	137
SECTION 4.05.	Power to Act; Procedures.	137
SECTION 4.06.	Due-on-Sale Clauses; Assumption Agreements.	138
SECTION 4.07.	Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee.	138
SECTION 4.08.	Standard Hazard Insurance and Flood Insurance Policies.	139
SECTION 4.09.	Presentment of Claims and Collection of Proceeds.	139
SECTION 4.10.	Maintenance of Primary Mortgage Insurance Policies.	139
SECTION 4.11.	Trustee to Retain Possession of Certain Insurance Policies and Documents.	140
SECTION 4.12.	Realization Upon Defaulted Mortgage Loans.	140
SECTION 4.13.	Compensation for the Master Servicer.	140
SECTION 4.14.	REO Property.	141
SECTION 4.15.	Master Servicer Annual Statement of Compliance.	141
SECTION 4.16.	Master Servicer Assessments of Compliance.	142
SECTION 4.17.	Master Servicer Attestation Reports.	143
SECTION 4.18.	Annual Certification.	144
SECTION 4.19.	Obligation of the Master Servicer in Respect of Prepayment Interest Shortfalls.	145
SECTION 4.20.	Prepayment Penalty Verification.	145
ARTICLE V	PAYMENTS TO CERTIFICATEHOLDERS	147
SECTION 5.01.	Distributions.	147
SECTION 5.02.	Statements to Certificateholders.	161
SECTION 5.03.	Servicer Reports; P&I Advances.	165
SECTION 5.04.	Allocation of Realized Losses.	166
SECTION 5.05.	Compliance with Withholding Requirements.	169

SECTION 5.06.	Reports Filed with Securities and Exchange Commission.	169
SECTION 5.07.	Supplemental Interest Trust.	174
SECTION 5.08.	Tax Treatment of Swap Payments and Swap Termination Payments.	176
ARTICLE VI	THE CERTIFICATES	178
SECTION 6.01.	The Certificates.	178
SECTION 6.02.	Registration of Transfer and Exchange of Certificates.	180
SECTION 6.03.	Mutilated, Destroyed, Lost or Stolen Certificates.	186
SECTION 6.04.	Persons Deemed Owners.	187
SECTION 6.05.	Certain Available Information.	187
ARTICLE VII	THE DEPOSITOR, THE SERVICER AND THE MASTER SERVICER	189
SECTION 7.01.	Liability of the Depositor, the Servicer and the Master Servicer.	189
SECTION 7.02.	Merger or Consolidation of the Depositor, the Servicer or the Master Servicer.	189
SECTION 7.03.	Limitation on Liability of the Depositor, the Servicer, the Master Servicer and Others.	189
SECTION 7.04.	Limitation on Resignation of the Servicer.	190
SECTION 7.05.	Limitation on Resignation of the Master Servicer.	192
SECTION 7.06.	Assignment of Master Servicing.	192
SECTION 7.07.	Rights of the Depositor in Respect of the Servicer and the Master Servicer.	193
SECTION 7.08.	Duties of the Credit Risk Manager.	194
SECTION 7.09.	Limitation Upon Liability of the Credit Risk Manager.	194
SECTION 7.10.	Removal of the Credit Risk Manager.	194
ARTICLE VIII	DEFAULT	195
SECTION 8.01.	Servicer Events of Default.	195
SECTION 8.02.	Master Servicer to Act; Appointment of Successor.	200
SECTION 8.03.	Notification to Certificateholders.	201
SECTION 8.04.	Waiver of Events of Default.	201
ARTICLE IX	CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR	203
SECTION 9.01.	Duties of Trustee and Securities Administrator.	203
SECTION 9.02.	Certain Matters Affecting Trustee and Securities Administrator.	204
SECTION 9.03.	Trustee and Securities Administrator not Liable for Certificates or Mortgage Loans.	207
SECTION 9.04.	Trustee and Securities Administrator May Own Certificates.	207
SECTION 9.05.	Fees and Expenses of Trustee, Custodian and Securities Administrator.	207
SECTION 9.06.	Eligibility Requirements for Trustee and Securities Administrator.	208
SECTION 9.07.	Resignation and Removal of Trustee and Securities Administrator.	209
SECTION 9.08.	Successor Trustee or Securities Administrator.	210
SECTION 9.09.	Merger or Consolidation of Trustee or Securities Administrator.	210
SECTION 9.10.	Appointment of Co-Trustee or Separate Trustee.	211

SECTION 9.11.	Appointment of Office or Agency.	212
SECTION 9.12.	Representations and Warranties.	212
ARTICLE X	TERMINATION	214
SECTION 10.01.	Termination Upon Repurchase or Liquidation of All Mortgage Loans.	214
SECTION 10.02.	Additional Termination Requirements.	216
ARTICLE XI	REMIC PROVISIONS	218
SECTION 11.01.	REMIC Administration.	218
SECTION 11.02.	Prohibited Transactions and Activities.	220
SECTION 11.03.	Indemnification.	221
ARTICLE XII	MISCELLANEOUS PROVISIONS	222
SECTION 12.01.	Amendment.	222
SECTION 12.02.	Recordation of Agreement; Counterparts.	223
SECTION 12.03.	Limitation on Rights of Certificateholders.	223
SECTION 12.04.	Governing Law.	224
SECTION 12.05.	Notices.	224
SECTION 12.06.	Severability of Provisions.	225
SECTION 12.07.	Notice to Rating Agencies.	225
SECTION 12.08.	Article and Section References.	226
SECTION 12.09.	Grant of Security Interest.	226
SECTION 12.10.	Survival of Indemnification.	227
SECTION 12.11.	Intention of the Parties and Interpretation.	227
SECTION 12.12.	Indemnification.	228
SECTION 12.13.	Swap Provider as a Third Party Beneficiary.	228

Exhibits
Exhibit A-1	Form of Class A Certificate
Exhibit A-2	Form of Class M-[1][2][3][4][5][6][7][8][9] Certificate
Exhibit A-3	Form of Class M-10 Certificate
Exhibit A-4	Form of Class CE Certificate
Exhibit A-5	Form of Class P Certificate
Exhibit A-6	Form of Class R Certificate
Exhibit B-1	Form of Transferor Representation Letter and Form of Transferee Representation Letter in Connection with Transfer of the Class M-10 Certificates, Class P Certificates, Class CE Certificates and Residual Certificates Pursuant to Rule 144A Under the Securities Act
Exhibit B-2	Form of Transferor Representation Letter and Form of Transferee Representation Letter in Connection with Transfer of the Class M-10 Certificates, Class P Certificates and Class CE Certificates to Regulation S Under the Securities Act
Exhibit B-3	Form of Transferor Representation Letter and Form of Transferee Representation Letter in Connection with Transfer of the Class M-10 Certificates, Class P Certificates, Class CE Certificates and Residual Certificates Pursuant to Rule 501(a) Under the Securities Act
Exhibit B-4	Form of Transfer Affidavit and Agreement and Form of Transferor Affidavit in Connection with Transfer of Residual Certificates
Exhibit C	Form of Back-Up Certification
Exhibit D	Form of Power of Attorney
Exhibit E	Servicing Criteria
Exhibit F	Mortgage Loan Purchase Agreement
Exhibit G	Form 10-D, Form 8-K and Form 10-K Reporting Responsibility
Exhibit H	Additional Disclosure Notification
Exhibit I	Swap Agreement
Exhibit J	Cap Contracts

Schedule 1	Mortgage Loan Schedule
Schedule 2	Prepayment Charge Schedule
Schedule 3	Reserved
Schedule 4	Standard File Layout - Delinquency Reporting and Realized Losses and Gains
Schedule 5	Standard File Layout - Master Servicing
Schedule 6	Data Requirements of Servicing Advances Incurred Prior to Cut-off Date

Designation	REMIC I Remittance Rate		Initial Uncertificated Balance		Latest Possible Maturity Date⁽¹⁾
I		Variable⁽²⁾	$	60,214,802.67		August 25, 2036
I-1-A		Variable⁽²⁾	$	6,697,514.16		August 25, 2036
I-1-B		Variable⁽²⁾	$	6,697,514.16		August 25, 2036
I-2-A		Variable⁽²⁾	$	7,082,677.86		August 25, 2036
I-2-B		Variable⁽²⁾	$	7,082,677.86		August 25, 2036
I-3-A		Variable⁽²⁾	$	6,800,222.55		August 25, 2036
I-3-B		Variable⁽²⁾	$	6,800,222.55		August 25, 2036
I-4-A		Variable⁽²⁾	$	6,517,825.59		August 25, 2036
I-4-B		Variable⁽²⁾	$	6,517,825.59		August 25, 2036
I-5-A		Variable⁽²⁾	$	6,247,189.53		August 25, 2036
I-5-B		Variable⁽²⁾	$	6,247,189.53		August 25, 2036
I-6-A		Variable⁽²⁾	$	5,987,822.46		August 25, 2036
I-6-B		Variable⁽²⁾	$	5,987,822.46		August 25, 2036
I-7-A		Variable⁽²⁾	$	5,739,254.57		August 25, 2036
I-7-B		Variable⁽²⁾	$	5,739,254.57		August 25, 2036
I-8-A		Variable⁽²⁾	$	5,501,034.97		August 25, 2036
I-8-B		Variable⁽²⁾	$	5,501,034.97		August 25, 2036
I-9-A		Variable⁽²⁾	$	5,272,731.30		August 25, 2036
I-9-B		Variable⁽²⁾	$	5,272,731.30		August 25, 2036

Designation	REMIC II Remittance Rate		Initial Uncertificated Balance		Latest Possible Maturity Date ⁽¹⁾
AA		Variable⁽²⁾	$	430,008,623.57		August 25, 2036
A-1		Variable⁽²⁾	$	1,656,755.00		August 25, 2036
A-2A		Variable⁽²⁾	$	993,940.00		August 25, 2036
A-2B		Variable⁽²⁾	$	321,070.00		August 25, 2036
A-2C		Variable⁽²⁾	$	243,860.00		August 25, 2036
A-2D		Variable⁽²⁾	$	277,100.00		August 25, 2036
M-1		Variable⁽²⁾	$	201,840.00		August 25, 2036
M-2		Variable⁽²⁾	$	160,155.00		August 25, 2036
M-3		Variable⁽²⁾	$	81,175.00		August 25, 2036
M-4		Variable⁽²⁾	$	68,010.00		August 25, 2036
M-5		Variable⁽²⁾	$	65,820.00		August 25, 2036
M-6		Variable⁽²⁾	$	43,880.00		August 25, 2036
M-7		Variable⁽²⁾	$	48,265.00		August 25, 2036
M-8		Variable⁽²⁾	$	32,910.00		August 25, 2036
M-9		Variable⁽²⁾	$	57,040.00		August 25, 2036
M-10		Variable⁽²⁾	$	59,235.00		August 25, 2036
ZZ		Variable⁽²⁾	$	4,464,631.20		August 25, 2036
P		Variable⁽²⁾⁽⁴⁾	$	100.00		August 25, 2036
IO		Variable⁽²⁾		(3)		August 25, 2036
I-SUB		Variable⁽²⁾	$	8,491.88		August 25, 2036
I-GRP		Variable⁽²⁾	$	41,626.99		August 25, 2036
II-SUB		Variable⁽²⁾	$	9,410.48		August 25, 2036
II-GRP		Variable⁽²⁾	$	46,129.88		August 25, 2036
XX		Variable⁽²⁾	$	438,678,650.53		August 25, 2036

Designation	Pass-Through Rate		Initial Aggregate Certificate Principal Balance		Latest Possible Maturity Date ⁽¹⁾
Class A-1		Variable⁽²⁾	$	331,351,000.00		August 25, 2036
Class A-2A		Variable⁽²⁾	$	198,788,000.00		August 25, 2036
Class A-2B		Variable⁽²⁾	$	64,214,000.00		August 25, 2036
Class A-2C		Variable⁽²⁾	$	48,772,000.00		August 25, 2036
Class A-2D		Variable⁽²⁾	$	55,420,000.00		August 25, 2036
Class M-1		Variable⁽²⁾	$	40,368,000.00		August 25, 2036
Class M-2		Variable⁽²⁾	$	32,031,000.00		August 25, 2036
Class M-3		Variable⁽²⁾	$	16,235,000.00		August 25, 2036
Class M-4		Variable⁽²⁾	$	13,602,000.00		August 25, 2036
Class M-5		Variable⁽²⁾	$	13,164,000.00		August 25, 2036
Class M-6		Variable⁽²⁾	$	8,776,000.00		August 25, 2036
Class M-7		Variable⁽²⁾	$	9,653,000.00		August 25, 2036
Class M-8		Variable⁽²⁾	$	6,582,000.00		August 25, 2036
Class M-9		Variable⁽²⁾	$	11,408,000.00		August 25, 2036
Class M-10		Variable⁽²⁾	$	11,847,000.00		August 25, 2036
Class P		N/A⁽³⁾	$	100.00		August 25, 2036
Class CE		N/A⁽⁴⁾	$	15,357,619.53		August 25, 2036
Class IO Interest		N/A⁽⁵⁾		⁽⁵⁾		August 25, 2036

REMIC II Regular Interest		Class
REMIC II Regular Interest A-1		A-1
REMIC II Regular Interest A-2A		A-2A
REMIC II Regular Interest A-2B		A-2B
REMIC II Regular Interest A-2C		A-2C
REMIC II Regular Interest A-2D		A-2D
REMIC II Regular Interest M-1		M-1
REMIC II Regular Interest M-2		M-2
REMIC II Regular Interest M-3		M-3
REMIC II Regular Interest M-4		M-4
REMIC II Regular Interest M-5		M-5
REMIC II Regular Interest M-6		M-6
REMIC II Regular Interest M-7		M-7
REMIC II Regular Interest M-8		M-8
REMIC II Regular Interest M-9		M-9
REMIC II Regular Interest M-10		M-10
REMIC II Regular Interest P		P

Distribution Date	REMIC I Regular Interest	Rate
1^st through 6^th	I-1-A through I-54-A	REMIC I Remittance Rate
	II-1-A through II-54-A	REMIC I Remittance Rate
7	I-1-A through I-54-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate
	II-1-A through II-54-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate
8	I-2-A through I-54-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate
	II-2-A through II-54-A	2 multiplied by Swap LIBOR, subject to a maximum rate REMIC I Remittance Rate
	I-1-A	REMIC I Remittance Rate
	II-1-A	REMIC I Remittance Rate
9	I-3-A through I-54-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate
	II-3-A through II-54-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate
	I-1-A and I-2-A	REMIC I Remittance Rate
	II-1-A and II-2-A	REMIC I Remittance Rate
10	I-4-A through I-54-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate
	II-4-A through II-54-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate
	I-1-A through I-3-A	REMIC I Remittance Rate
	II-1-A through II-3-A	REMIC I Remittance Rate
11	I-5-A through I-54-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate
	II-5-A through II-54-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate
	I-1-A through I-4-A	REMIC I Remittance Rate
	II-1-A through II-4-A	REMIC I Remittance Rate

Distribution Date	Swap Notional Amount ($)
May 2007		750,625,530.00
June 2007		722,386,500.00
July 2007		692,523,487.00
August 2007		663,851,403.00
September 2007		636,370,002.00
October 2007		610,029,696.00
November 2007		584,782,971.00
December 2007		560,584,294.00
January 2008		537,390,033.00
February 2008		515,158,379.00
March 2008		493,849,265.00
April 2008		473,420,257.00
May 2008		453,806,622.00
June 2008		434,296,819.00
July 2008		370,289,100.00
August 2008		316,586,897.00
September 2008		271,896,943.00
October 2008		234,958,424.00
November 2008		224,172,187.00
December 2008		214,152,548.00
January 2009		204,588,867.00
February 2009		195,461,495.00
March 2009		186,748,756.00
April 2009		178,431,509.00
May 2009		170,491,519.00
June 2009		162,911,407.00
July 2009		155,674,606.00
August 2009		148,765,527.00
September 2009		142,168,903.00
October 2009		135,870,335.00
November 2009		129,856,134.00
December 2009		124,113,249.00
January 2010		118,629,234.00
February 2010		113,392,230.00
March 2010		108,390,916.00
April 2010		103,614,502.00
May 2010		99,052,699.00
June 2010		94,695,698.00
July 2010		90,534,143.00

Distribution Date	Swap Notional Amount ($)
August 2010		86,559,112.00
September 2010		82,762,097.00
October 2010		79,134,983.00
November 2010		75,670,032.00
December 2010		72,359,862.00
January 2011		69,197,434.00
February 2011		66,176,031.00
March 2011		63,289,251.00
April 2011		60,530,982.00
May 2011		57,895,399.00
June 2011		55,376,942.00
July 2011		52,970,276.00
August 2011		50,667,336.00
September 2011		48,466,558.00
October 2011		46,363,369.00

Distribution Date		Percentage
November 2008 to October 2009		1.45% plus 1/12 of 1.80% for each month thereafter
November 2009 to October 2010		3.25% plus 1/12 of 1.85% for each month thereafter
November 2010 to October 2011		5.10% plus 1/12 of 1.45% for each month thereafter
November 2011 to October 2012		6.55% plus 1/12 of 0.80% for each month thereafter
November 2012 and thereafter		7.35%

Distribution Date		REMIC I Regular Interests
1^st through 7^th		I-1-A through I-54-A and II-1-A through II-54-A
8		I-2-A through I-54-A and II-2-A through II-54-A
9		I-3-A through I-54-A and II-3-A through II-54-A
10		I-4-A through I-54-A and II-4-A through II-54-A
11		I-5-A through I-54-A and II-5-A through II-54-A
12		I-6-A through I-54-A and II-6-A through II-54-A
13		I-7-A through I-54-A and II-7-A through II-54-A
14		I-8-A through I-54-A and II-8-A through II-54-A
15		I-9-A through I-54-A and II-9-A through II-54-A
16		I-10-A through I-54-A and II-10-A through II-54-A
17		I-11-A through I-54-A and II-11-A through II-54-A
18		I-12-A through I-54-A and II-12-A through II-54-A
19		I-13-A through I-54-A and II-13-A through II-54-A
20		I-14-A through I-54-A and II-14-A through II-54-A
21		I-15-A through I-54-A and II-15-A through II-54-A
22		I-16-A through I-54-A and II-16-A through II-54-A
23		I-17-A through I-54-A and II-17-A through II-54-A
24		I-18-A through I-54-A and II-18-A through II-54-A
25		I-19-A through I-54-A and II-19-A through II-54-A
26		I-20-A through I-54-A and II-20-A through II-54-A
27		I-21-A through I-54-A and II-21-A through II-54-A
28		I-22-A through I-54-A and II-22-A through II-54-A
29		I-23-A through I-54-A and II-23-A through II-54-A
30		I-24-A through I-54-A and II-24-A through II-54-A
31		I-25-A through I-54-A and II-25-A through II-54-A
32		I-26-A through I-54-A and II-26-A through II-54-A
33		I-27-A through I-54-A and II-27-A through II-54-A
34		I-28-A through I-54-A and II-28-A through II-54-A
35		I-29-A through I-54-A and II-29-A through II-54-A
36		I-30-A through I-54-A and II-30-A through II-54-A
37		I-31-A through I-54-A and II-31-A through II-54-A

Distribution Date		REMIC I Regular Interests
38		I-32-A through I-54-A and II-32-A through II-54-A
39		I-33-A through I-54-A and II-33-A through II-54-A
40		I-34-A through I-54-A and II-34-A through II-54-A
41		I-35-A through I-54-A and II-35-A through II-54-A
42		I-36-A through I-54-A and II-36-A through II-54-A
43		I-37-A through I-54-A and II-37-A through II-54-A
44		I-38-A through I-54-A and II-38-A through II-54-A
45		I-39-A through I-54-A and II-39-A through II-54-A
46		I-40-A through I-54-A and II-40-A through II-54-A
47		I-41-A through I-54-A and II-41-A through II-54-A
48		I-42-A through I-54-A and II-42-A through II-54-A
49		I-43-A through I-54-A and II-43-A through II-54-A
50		I-44-A through I-54-A and II-44-A through II-54-A
51		I-45-A through I-54-A and II-45-A through II-54-A
52		I-46-A through I-54-A and II-46-A through II-54-A
53		I-47-A through I-54-A and II-47-A through II-54-A
54		I-48-A through I-54-A and II-48-A through II-54-A
55		I-49-A through I-54-A and II-49-A through II-54-A
56		I-50-A through I-54-A and II-50-A through II-54-A
57		I-51-A through I-54-A and II-51-A through II-54-A
58		I-52-A through I-54-A and II-52-A through II-54-A
59		I-53-A through I-54-A and II-53-A through II-54-A
60		I-54-A and II-54-A
thereafter		$0.00


	ACE SECURITIES CORP., as Depositor

	By:	/s/ Evelyn Echevarria
		Name: Evelyn Echevarria Title: Vice President



	By:	/s/ Doris J. Hearn
		Name: Doris J. Hearn Title: Vice President


	COUNTRYWIDE HOME LOANS SERVICING LP, as Servicer By: Countrywide GP, Inc., its General Partner

	By:	/s/ Jordan Cohen
		Name: Jordan Cohen Title: Vice President


	HSBC BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee

	By:	/s/ Fernando Acebedo
		Name: Fernando Acebedo Title: Vice President
		Title


	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Master Servicer and Securities Administrator

	By:	/s/ Stacey M. Taylor
		Name: Stacey M. Taylor Title: Vice President


	Acknowledged and Agreed for purposes of Section 9.05:

	DB STRUCTURED PRODUCTS, INC

	By:	/s/ Ernie Calabrese
		Name: Ernie Calabrese Title: Director



	By:	/s/ Susan Valenti
		Name: Susan Valenti Title: Director
		Title


	Acknowledged and Agreed for purposes of Sections 7.08, 7.09 and 7.10:

	CLAYTON FIXED INCOME SERVICES INC.

	By:	/s/ Kevin J. Kanouff
		Name: Kevin J. Kanouff Title: President and General Counsel

Series 2006-FM2, Class A-[1][2A][2B][2C][2D]		Aggregate Certificate Principal Balance of the Class A-[1][2A][2B][2C][2D] Certificates as of the Issue Date: $_____________

Pass-Through Rate: Variable		Denomination: $____________

Date of Pooling and Servicing Agreement and Cut-off Date: October 1, 2006		Master Servicer: Wells Fargo Bank, N.A.

First Distribution Date: November 27, 2006		Trustee: HSBC Bank USA, National Association

No. __		Issue Date: October 30, 2006

		CUSIP: ________________

TEN COM -	as tenants in common	UNIF GIFT MIN ACT -	Custodian (Cust) (Minor) under Uniform Gifts to Minors Act
TEN ENT -	as tenants by the entireties		________________ (State)
JT TEN -	as joint tenants with right if survivorship and not as tenants in common

Additional abbreviations may also be used though not in the above list.

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto

Dated:
	Signature by or on behalf of assignor


	Signature Guaranteed

Distributions shall be made, by wire transfer or otherwise, in immediately available
funds to

for the account of
account number							or, if mailed by check, to

Applicable statements should be mailed to


This information is provided by
assignee named above, or
its agent.

Series 2006-FM2, Class M-[1][2][3][4][5][6][7][8][9]		Aggregate Certificate Principal Balance of the Class M-[1][2][3][4][5][6][7][8][9] Certificates as of the Issue Date: $______________

Pass-Through Rate: Variable		Denomination: $______________

Date of Pooling and Servicing Agreement and Cut-off Date: October 1, 2006		Master Servicer: Wells Fargo Bank, N.A.

First Distribution Date: November 27, 2006		Trustee: HSBC Bank USA, National Association

No.___		Issue Date: October 30, 2006

		CUSIP:_________________