Common use of Allocation of Realized Losses Clause in Contracts

Allocation of Realized Losses. (a) With respect to any Distribution Date, the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 Certificates until the Class B-6 Principal Balance has been reduced to zero; second, to the Class B-5 Certificates until the Class B-5 Principal Balance has been reduced to zero; third, to the Class B-4 Certificates until the Class B-4 Principal Balance has been reduced to zero; fourth, to the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall be allocated among the Certificates of such Class based on their Percentage Interests. (d) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect All Realized Losses on the Mortgage Loans allocated to any Distribution Date, REMIC II Regular Interest pursuant to Section 5.05(c) on the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will shall be allocated by the Trustee on each Distribution Date as follows: first, to Excess Spread as part of the Class B-6 Certificates until payment in respect of the Class B-6 Extra Principal Balance has been reduced to zeroDistribution Amount for such Distribution Date; second, to the Class B-5 Certificates CE Interest and Class CE Certificates, until the Class B-5 Certificate Principal Balance or Uncertificated Principal Balance thereof, as applicable, has been reduced to zero; third, to the Class B-4 Certificates M-9 Certificates, until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, fourth to the Class B-3 Certificates M-8 Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 Certificates M-7 Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates M-6 Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eigth, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eleventh, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero and twelfth, to the Class or Classes of Class A Certificates, on a pro rata basis, until the Certificate Principal Balances thereof have been reduced to zero. All Realized Losses to be allocated to the Certificate Principal Balances of all Classes on any Distribution Date shall be so allocated after the actual distributions to be made on such date as provided above. All references above to the Certificate Principal Balance of any Class of Certificates shall be to the Certificate Principal Balance of such Class immediately prior to the relevant Distribution Date, before reduction thereof by any Realized Losses, in each case to be allocated to such Class of Certificates, on such Distribution Date. (b) Any allocation of Realized Losses to a class of Certificates or interest on any Distribution Date shall be made by reducing the Certificate Principal Balance or Uncertificated Principal Balance thereof by the amount so allocated; any allocation of Realized Losses to Excess Spread shall be made by reducing the amount otherwise payable in respect of the Class CE Interest and the Class CE Certificates pursuant to clause (G) of Section 5.04(a)(3). No allocations of any Realized Losses shall be made to the Certificate Principal Balance or Uncertificated Principal Balance, as applicable, of the Class P Interest and the Class P Certificates. Notwithstanding the foregoing, no such allocation of any Realized Loss shall be made on a Distribution Date to any Class of Certificates to the extent that such allocation would result in the reduction of the aggregate Certificate Principal Balance of all the Certificates as of such Distribution Date, (other than the Class I-A-PO CE Certificates and Class P Certificates) after giving effect to all distributions and Class I-A-PO Certificates, pro rata, based prior allocations of Realized Losses on the Non-PO Fraction and Mortgage Loans on such date, to an amount less than the PO Fraction aggregate Stated Principal Balance of all of the Mortgage Loans as of the first day of the month of such Mortgage LoansDistribution Date (such limitation, respectively, the “Loss Allocation Limitation”). In addition in no event will the Certificate Principal Balance of any Certificate be reduced more than once in respect of any particular amount both (i) allocable to such Certificate in respect of Realized Losses and (ii) with respect payable as principal to the Holder of such losses occurring with respect to Group II Mortgage LoansCertificate from Remaining Excess Spread. As used herein, concurrentlyan allocation of a Realized Loss on a “pro rata basis” among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to the Group II-A each such Class of Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Mortgage Loans, respectivelyDistribution Date. This allocation of All Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (di) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled allocated on each Distribution Date, first, to its share (with respect to the Class REMIC I Regular Interest I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to Swap until the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Uncertificated Principal Balance of a Class of Certificates thereof has been reduced to zero, such Class shall not be entitled and second, to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance REMIC I Regular Interest I-8-A through REMIC I Regular Interest I-60-B, starting with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to lowest numerical denomination until the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Uncertificated Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect Balance of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group REMIC I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Regular Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, provided that, for REMIC I Regular Interests with the interest portion of same numerical denomination, such Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will shall be allocated among pro rata between such REMIC I Regular Interests. (ii) All Realized Losses on the outstanding Classes Mortgage Loans shall be allocated by the Trustee on each Distribution Date to the following REMIC II Regular Interests in the specified percentages, as follows: first, to Uncertificated Accrued Interest payable to the REMIC II Regular Interest AA and REMIC II Regular Interest ZZ up to an aggregate amount equal to the REMIC II Interest Loss Allocation Amount (without duplication of Group I-A Certificates losses allocated pursuant to Section 1.02), 98.00% and Group II-A Certificates2.00%, respectively; second, to the Uncertificated Principal Balances of the REMIC II Regular Interest AA and REMIC II Regular Interest ZZ up to an aggregate amount equal to the REMIC II Principal Loss Allocation Amount, 98.00% and 2.00%, respectively; third, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-10 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, based on their Group I-A until the Uncertificated Principal Balance of REMIC II Regular Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect M-10 has been reduced to zero; fourth, to the preceding Distribution DateUncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-9 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-9 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-8 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-8 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-7 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-7 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-6 and REMIC II Regular Interest ZZ, 98.00%, 1.00%, and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-6 has been reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-5 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-5 has been reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-4 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-4 has been reduced to zero; tenth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-3 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-3 has been reduced to zero; eleventh, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-2 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-2 has been reduced to zero; twelfth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-1 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-1 has been reduced to zero; and thirteenth, to the Uncertificated Principal Balance of REMIC II Regular Interest AA, 98.00%, to the Uncertificated Principal Balances of the REMIC II Regular Interests X-0, X-0 xxx X-0, pro rata, 1.00%, and to the Uncertificated Principal Balance of REMIC II Regular Interest ZZ, 1.00%, until the Uncertificated Principal Balances of such REMIC II Regular Interests A-1, A-2 and A-3 have been reduced to zero.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. (b) All Realized Losses on the Mortgage Loans shall be allocated as follows: (i) first, to Excess Cash Flow in the amounts and priority as provided in Section 4.02; (ii) second, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; (iii) third, to the Class M-9 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (iv) fourth, to the Class M-8 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (v) fifth, to the Class M-7 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vi) sixth, to the Class M-6 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vii) seventh, to the Class M-5 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (viii) eighth, to the Class M-4 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (ix) ninth, to the Class M-3 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (x) tenth, to the Class M-2 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xi) eleventh, to the Class M-1 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; and (xii) twelfth, to the Class A-1, Class A-2 and Class A-3 Certificates on a pro rata basis, based on their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date, until the aggregate Certificate Principal Balance of each such Class has been reduced to zero. (c) An allocation of a Realized Loss on a "pro rata basis" among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Accrued Certificate Interest thereon payable on such Distribution Date in the case of an interest portion of a Realized Loss. Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates until or Class M Certificates shall be made by reducing the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will shall be effected through the reduction made by operation of the applicable Class's Principal Balance. (b) With respect to any definition of "Accrued Certificate Interest" for each Class for such Distribution Date, . Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the priority of payment provisions of Section 4.02(c). Allocations of the principal portion of Excess Special Hazard Losses, Excess Fraud Debt Service Reductions shall be made by operation of the priority of payment provisions of Section 4.02(c). All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (d) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect allocated on each Distribution Date to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date REMIC I Regular Interests as provided in the month following the month in which such recovery is received. When the Principal Balance definition of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered REMIC I Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated LoanLosses. (e) The interest portion Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of Excess Special Hazard Lossesthis Section, Excess Fraud Losses the definition of Accrued Certificate Interest and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan the operation of Section 4.02(c) shall be deemed allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after to the Class B Principal Balance has SB Certificates. Realized Losses allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to the REMIC II Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued Certificate Interest on the REMIC II Regular Interest SB-IO. Realized Losses allocated to the Overcollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce the principal balance of the REMIC II Regular Interest SB-PO until such principal balance shall have been reduced to zero, the zero and thereafter to reduce accrued and unpaid interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution DateREMIC II Regular Interest SB-IO.

Allocation of Realized Losses. (aA) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. All Realized Losses on the Mortgage Loans shall be allocated as follows: first, to payments made pursuant to the Yield Maintenance Agreement, if any, in accordance with Section 4.02(i), second, to the Excess Cash Flow as part of the Principal Distribution Amount as provided in Section 4.02(c), to the extent of the Excess Cash Flow for such Distribution Date, third, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; fourth, to the Class M-7 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class M-6 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and eleventh, for Realized Losses on the Group I Loans, to the Class I-A-3, Class I-A-2 and Class I-A-1 Certificates, in that order, until the Certificate Principal Balances thereof have been reduced to zero, for Realized Losses on the Group II Loans, to the Class II-A-3, Class II-A-2 and Class II-A-1 Certificates, in that order, until the Certificate Principal Balances thereof have been reduced to zero and for Realized Losses on the Group III Loans, first to the Class III-A-5 Certificates until the Certificate Principal Balance thereof has been reduced to zero and second, on a pro rata basis, to the Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates until the Certificate Principal Balances thereof have been reduced to zero. (B) Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates or Class M Certificates on any Distribution Date shall be made by reducing the Certificate Principal Balance thereof by the amount so allocated, which allocation shall be deemed to have occurred on such Distribution Date, until the Class B-6 Certificate Principal Balance thereof has been reduced to zero; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B M Certificates pursuant on any Distribution Date shall be made by operation of the definition of "Accrued Certificate Interest" for each Class for such Distribution Date. Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the priority of payment provisions of Section 4.02(c). All Realized Losses and all other losses allocated to Section 4.02(a) or Section 4.02(b) shall a Class of Certificates hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (dC) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect allocated on each Distribution Date to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date REMIC I Regular Interests as provided in the month following the month in which such recovery is received. When the Principal Balance definition of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered REMIC I Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated LoanLosses. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (fD) Realized Losses allocated in accordance with to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of this Section, the definition of Accrued Certificate Interest and the operation of Section 4.02(c) shall be deemed allocated to the Class SB Certificates. Realized Losses allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to REMIC II Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section 4.02 will shall be deemed to reduce Accrued Certificate Interest on REMIC II Regular Interest SB-IO. Realized Losses allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution DateOvercollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce the principal balance of REMIC II Regular Interest SB-PO until such principal balance shall have been reduced to zero and thereafter to reduce accrued and unpaid interest on REMIC II Regular Interest SB-IO.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. (b) All Realized Losses on the Mortgage Loans shall be allocated as follows: (i) first, to Excess Cash Flow in the amounts and priority as provided in Section 4.02; (ii) second, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; (iii) third, to the Class B Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (iv) fourth, to the Class M-6 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (v) fifth, to the Class M-5 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vi) sixth, to the Class M-4 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vii) seventh, to the Class M-3 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (viii) eighth, to the Class M-2 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (ix) ninth, to the Class M-1 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; and (x) tenth, for losses on the Group I Loans, to the Class A-I Certificates on a pro rata basis, based on their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date, until the aggregate Certificate Principal Balance of each such Class has been reduced to zero and for losses on the Group II Loans, first, to the Class A-II-2 Certificates and then to the Class A-II-1 Certificates, in each case until the aggregate Certificate Principal Balance thereof has been reduced to zero. (c) An allocation of a Realized Loss on a "pro rata basis" among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Accrued Certificate Interest thereon payable on such Distribution Date in the case of an interest portion of a Realized Loss. Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates, Class M Certificates until or Class B Certificates shall be made by reducing the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will shall be effected through the reduction made by operation of the applicable Class's Principal Balance. (b) With respect to any definition of "Accrued Certificate Interest" for each Class for such Distribution Date, . Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the priority of payment provisions of Section 4.02(c). Allocations of the principal portion of Excess Special Hazard Losses, Excess Fraud Debt Service Reductions shall be made by operation of the priority of payment provisions of Section 4.02(c). All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (d) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect allocated on each Distribution Date to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date REMIC I Regular Interests as provided in the month following the month in which such recovery is received. When the Principal Balance definition of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered REMIC I Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated LoanLosses. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I on the Mortgage Loan or Group II Mortgage Loan Loans shall be allocated among (i) on each Class Distribution Date to the REMIC II Regular Interests as provided in the definition of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group REMIC II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of this Section, the definition of Accrued Certificate Interest and the operation of Section 4.02(c) shall be deemed allocated to the Class SB Certificates. Realized Losses allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to the REMIC III Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section 4.02 will shall be allocated deemed to reduce Accrued Certificate Interest on the Determination Date in the second month following the month in which such loss was incurred with respect REMIC III Regular Interest SB-IO. Realized Losses allocated to the preceding Distribution DateOvercollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce the principal balance of the REMIC III Regular Interest SB-PO until such principal balance shall have been reduced to zero and thereafter to reduce accrued and unpaid interest on the REMIC III Regular Interest SB-IO.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. (b) All Realized Losses on the Mortgage Loans shall be allocated as follows: (i) first, to Excess Cash Flow in the amounts and priority as provided in Section 4.02; (ii) second, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; (iii) third, to the Class M-9 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (iv) fourth, to the Class M-8 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (v) fifth, to the Class M-7 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vi) sixth, to the Class M-6 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vii) seventh, to the Class M-5 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (viii) eighth, to the Class M-4 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (ix) ninth, to the Class M-3 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (x) tenth, to the Class M-2 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xi) eleventh, to the Class M-1 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; and (xii) twelfth, to the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates on a pro rata basis, based on their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date, until the aggregate Certificate Principal Balance of each such Class has been reduced to zero. (c) An allocation of a Realized Loss on a "pro rata basis" among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Accrued Certificate Interest thereon payable on such Distribution Date in the case of an interest portion of a Realized Loss. Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates until or Class M Certificates shall be made by reducing the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will shall be effected through the reduction made by operation of the applicable Class's Principal Balance. (b) With respect to any definition of "Accrued Certificate Interest" for each Class for such Distribution Date, . Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the priority of payment provisions of Section 4.02(c). Allocations of the principal portion of Excess Special Hazard Losses, Excess Fraud Debt Service Reductions shall be made by operation of the priority of payment provisions of Section 4.02(c). All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (d) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect allocated on each Distribution Date to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date REMIC I Regular Interests as provided in the month following the month in which such recovery is received. When the Principal Balance definition of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered REMIC I Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated LoanLosses. (e) The interest portion Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of Excess Special Hazard Lossesthis Section, Excess Fraud Losses the definition of Accrued Certificate Interest and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan the operation of Section 4.02(c) shall be deemed allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after to the Class B Principal Balance has SB Certificates. Realized Losses allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to the REMIC II Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued Certificate Interest on the REMIC II Regular Interest SB-IO. Realized Losses allocated to the Overcollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce the principal balance of the REMIC II Regular Interest SB-PO until such principal balance shall have been reduced to zero, the zero and thereafter to reduce accrued and unpaid interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution DateREMIC II Regular Interest SB-IO.

Allocation of Realized Losses. (aA) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. All Realized Losses on the Mortgage Loans shall be allocated as follows: first, to the Excess Cash Flow as part of the Principal Distribution Amount as provided in Section 4.02(c), to the extent of the Excess Cash Flow for such Distribution Date; second, to Net Swap Payments received by the Supplemental Interest Trust on that Distribution Date; third, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; fourth, to the Class M-7 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class M-6 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eleventh, to the Class A-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and twelfth, to the Class A-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero. No Realized Losses will be allocated to the Class A-1 Certificates. (B) Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 M Certificates on any Distribution Date shall be made by reducing the Certificate Principal Balance thereof by the amount so allocated, which allocation shall be deemed to have occurred on such Distribution Date, until the Class B-6 Certificate Principal Balance thereof has been reduced to zero; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B M Certificates based on any Distribution Date shall be made by operation of the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case definition of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of "Accrued Certificate Interest" for each Class for such Distribution Date. Allocations of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be allocated on made by operation of the subsequent Determination Date to the outstanding Classes priority of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as payment provisions of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Section 4.02(c). All Realized Losses and all other losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (dC) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Losses shall be entitled allocated among the REMIC I Regular Interests pursuant to its share the definition of REMIC I Realized Losses and the REMIC II Regular Interests pursuant to the definition of REMIC II Realized Losses. (with respect D) Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of this Section, the definition of Accrued Certificate Interest and the operation of Section 4.02(c) shall be deemed allocated to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A SB Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisionsNotional Amount thereof. Realized Losses allocated to the Class SB Certificates shall, each outstanding Class to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to REMIC III Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section shall be entitled deemed to its pro rata share reduce Accrued Certificate Interest on REMIC III Regular Interest SB-IO. Realized Losses allocated to the Overcollateralization Amount pursuant to paragraph (determined as described aboveb) of such excess up this Section shall be deemed first to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to reduce the principal balances balance of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of REMIC III Regular Interest SB-PO until such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would balance shall have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the zero and thereafter to reduce accrued and unpaid interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group Ion REMIC III Regular Interest SB-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest PercentagesIO. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. (i) All Realized Losses on the Group I Loans shall be allocated as follows: (1) first, to Excess Cash Flow in the amounts and priority as provided in Section 4.02; (2) second, in reduction of the Group I Overcollateralization Amount, until such amount has been reduced to zero; and (3) third, on any Distribution Date on which, and to the extent that, the aggregate Certificate Principal Balance of the Class A Certificates and Class M Certificates exceeds the aggregate Stated Principal Balance of the Mortgage Loans after application of all payments to be made on such Distribution Date pursuant to Section 4.02, to the Class M-I Certificates and Class A-I Certificates in the following order: (A) first, to the Class M-I-3 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (B) second, to the Class M-I-2 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (C) third, to the Class M-I-1 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; and (D) fourth, to the Class A-I Certificates on a pro rata basis, based on their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date, until the aggregate Certificate Principal Balance of each such Class has been reduced to zero. (ii) All Realized Losses on the Group II Loans shall be allocated as follows: (1) first, to Excess Cash Flow as provided in Section 4.02; (2) second, in reduction of the Group II Overcollateralization Amount, until such amount has been reduced to zero; and (3) third, on any Distribution Date on which, and to the extent that, the aggregate Certificate Principal Balance of the Class A Certificates and Class M Certificates exceeds the aggregate Stated Principal Balance of the Mortgage Loans after application of all payments to be made on such Distribution Date pursuant to Section 4.02, to the Class M-II Certificates and Class A-II Certificates in the following order: (A) first, to the Class M-II-3 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (B) second, to the Class M-II-2 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (C) third, to the Class M-II-1 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; and (D) fourth, to the Class A-II-A Certificates, Realized Losses on the Group II-A Loans and to all of the Class A-II-B Certificates on a pro rata basis, Realized Losses on the Group II-B Loans, in each case until the aggregate Certificate Principal Balance of each such Class has been reduced to zero. (b) If a Loan Group is undercollateralized due to the application of Section 4.05(a)(i)(3) or (a)(ii)(3) above and the aggregate Certificate Principal Balance of the Class A Certificates and Class M Certificates exceeds the aggregate Stated Principal Balance of the Mortgage Loans after application of all payments to be made on such Distribution Date pursuant to Section 4.02, the Certificate Principal Balance of the Outstanding Class of Class A Certificates and Class M Certificates with the lowest priority in that undercollateralized Loan Group will be reduced to the extent necessary to make the aggregate Certificate Principal Balance of the Class A Certificates and Class M Certificates equal to the aggregate Stated Principal Balance of the Mortgage Loans. (c) Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates until or Class M Certificates shall be made by reducing the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than any interest rate reduction resulting from a Servicing Modification) shall be made by operation of the definition of "Accrued Certificate Interest" for each Class I-A-PO Certificatesfor such Distribution Date. Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the priority of payment provisions of Section 4.02(c) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction (d). Allocations of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Debt Service Reductions shall be made by operation of the priority of payment provisions of Section 4.02(c) and (d). All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (d) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated I Loans shall be entitled to its share (with respect allocated on each Distribution Date to the Class I-A-PO REMIC I Regular Interests and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date REMIC III Regular Interests as provided in the month following the month in which such recovery is received. When the Principal Balance definitions of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered REMIC I Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss Losses and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the REMIC III Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated LoanLosses. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or on the Group II Mortgage Loan Loans shall be allocated among (i) on each Class Distribution Date to the REMIC II Regular Interests and REMIC III Regular Interests as provided in the definitions of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group REMIC II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard and REMIC III Realized Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with to the Group I Excess Cash Flow, Group II Excess Cash Flow, Group I Overcollateralization Amount or the Group II Overcollateralization Amount pursuant to paragraphs (a) or (b) of this section, the definition of Accrued Certificate Interest and the operation of Section 4.02 will 4.02(c) and (d) shall be deemed allocated to the Class SB Certificates. Realized Losses allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to the REMIC III Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (a) shall be deemed to reduce Accrued Certificate Interest on the Determination Date in the second month following the month in which such loss was incurred with respect REMIC III Regular Interest SB-IO. Realized Losses allocated to the preceding Distribution DateOvercollateralization Amount pursuant to paragraph (a) shall be deemed first to reduce the principal balance of the REMIC III Regular Interest SB-PO until such principal balance shall have been reduced to zero and thereafter to reduce accrued and unpaid interest on the REMIC III Regular Interest SB-IO.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers’ Certificate. (b) All Realized Losses on the Mortgage Loans shall be allocated as follows: (i) first, to Excess Cash Flow in the amounts and priority as provided in Section 4.02; (ii) second, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; (iii) third, to the Class B-4 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (iv) fourth, to the Class B-3 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (v) fifth, to the Class B-2 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vi) sixth, to the Class B-1 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vii) seventh, to the Class M-10 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (viii) eighth, to the Class M-9 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (ix) ninth, to the Class M-8 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (x) tenth, to the Class M-7 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xi) eleventh, to the Class M-6 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xii) twelfth, to the Class M-5 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xiii) thirteenth, to the Class M-4 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xiv) fourteenth, to the Class M-3 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xv) fifteenth, to the Class M-2 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xvi) sixteenth, to the Class M-1 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; and (xvii) seventeenth, to the Class A Certificates on a pro rata basis, based on their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date, until the aggregate Certificate Principal Balance of each such Class has been reduced to zero. (c) An allocation of a Realized Loss on a “pro rata basis” among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Accrued Certificate Interest thereon payable on such Distribution Date in the case of an interest portion of a Realized Loss. Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates, Class M Certificates until or Class B Certificates shall be made by reducing the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will shall be effected through the reduction made by operation of the applicable Class's Principal Balance. (b) With respect to any definition of “Accrued Certificate Interest” for each Class for such Distribution Date, . Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the priority of payment provisions of Section 4.02(c). Allocations of the principal portion of Excess Special Hazard Losses, Excess Fraud Debt Service Reductions shall be made by operation of the priority of payment provisions of Section 4.02(c). All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (d) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect allocated on each Distribution Date to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date REMIC I Regular Interests as provided in the month following the month in which such recovery is received. When the Principal Balance definition of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered REMIC I Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated LoanLosses. (e) The interest portion Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of Excess Special Hazard Lossesthis Section, Excess Fraud Losses the definition of Accrued Certificate Interest and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan the operation of Section 4.02(c) shall be deemed allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after to the Class B Principal Balance has SB Certificates. Realized Losses allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to the REMIC II Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued Certificate Interest on the REMIC I Regular Interest SB-IO. Realized Losses allocated to the Overcollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce the principal balance of the REMIC II Regular Interest SB-PO until such principal balance shall have been reduced to zero, the zero and thereafter to reduce accrued and unpaid interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution DateREMIC II Regular Interest SB-IO.

Allocation of Realized Losses. 112 (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. All Realized Losses on the Group I Loans (other than Group I Excess Losses) shall be allocated as follows: first, to the Group I Excess Cash Flow as provided in Section 4.02(c)(vi), to the extent of the Group I Excess Cash Flow for such Distribution Date, second, to the Group II Excess Cash Flow as provided in Section 4.02(d)(vii), to the extent of the Group II Excess Cash Flow for such Distribution Date remaining after distributions pursuant to Section 4.02(d)(vi); third, in reduction of the Group I Overcollateralization Amount, until such amount has been reduced to zero; fourth, in reduction of the Group II Overcollateralization Amount, until such amount has been reduced to zero; fifth, to the Class M-I-3 Certificates; sixth, to the Class M-I-2 Certificates; seventh, to the Class M-I-1 Certificates; and thereafter, to the Class A-I Certificates on a pro rata basis; provided that any Realized Loss allocated to the Insured Certificates shall be covered by the Certificate Policy. Any Group I Excess Losses on the Mortgage Loans will be allocated to the Class A-I Certificates and Class M-I Certificates on a pro rata basis, in an amount equal to a fraction of such losses equal to (x) the aggregate Certificate Principal Balance of the Class A-I Certificates and Class M-I Certificates over (y) the aggregate Stated Principal Balance of the Group I Loans, and the remainder of such losses shall be allocated to the Group I Overcollateralization Amount in reduction of the amount thereof. All Realized Losses on the Group II Loans (other than Group II Excess Losses) shall be allocated as follows: first, to the Group II Excess Cash Flow as provided in Section 4.02(d)(vi), to the extent of the Group II Excess Cash Flow for such Distribution Date, second, to the Group I Excess Cash Flow as provided in Section 4.02(c)(vii), to the extent of the Group I Excess Cash Flow for such Distribution Date remaining after distributions pursuant to Section 4.02(c)(vi); third, in reduction of the Group II Overcollateralization Amount, until such amount has been reduced to zero; fourth, in reduction of the Group I Overcollateralization Amount, until such amount has been reduced to zero; fifth, to the Class M-II-3 Certificates; sixth, to the Class M-II-2 Certificates; seventh, to the Class M-II- 1 Certificates and thereafter, to the Class A-II Certificates. Any Group II Excess Losses on the Mortgage Loans will be allocated to the Class A-II Certificates, in an amount equal to a fraction of such losses equal to (x) the Certificate Principal Balance of the Class A-II Certificates over (y) the aggregate Stated Principal Balance of the Group II Loans, and the remainder of such losses shall be allocated to the Group II Overcollateralization Amount in reduction of the amount thereof. (b) Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates until or Class M Certificates shall be made by reducing the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zero; second, to have occurred on such Distribution Date. Allocations of the Class B-5 Certificates until the Class B-5 Principal Balance has been reduced to zero; third, to the Class B-4 Certificates until the Class B-4 Principal Balance has been reduced to zero; fourth, to the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation interest portions of Realized Losses will shall be effected through the reduction made by operation of the applicable Class's Principal Balance. definition of "Accrued Certificate Interest" and by operation of the provisions of Section 4.02(c) and (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud d). All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage Interests.Interests evidenced thereby. 113 (dc) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated I Loans shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based allocated on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the each Distribution Date in to REMIC I Regular Interest LT-A-1 until the month following the month in which such recovery is received. When the Uncertificated Principal Balance of a Class of Certificates thereof has been reduced to zero and then to REMIC I Regular Interest LT-A-2 and LT-A-3 until the Uncertificated Principal Balances thereof has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered All Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions Losses on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan Loans shall be allocated among (i) on each Class of Group IDistribution Date to REMIC I Regular Interest LT-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for until the related Distribution Date. In addition, after the Class B Uncertificated Principal Balance thereof has been reduced to zero, the interest portion of . (i) All Realized Losses on the Group I Loans shall be allocated on each Distribution Date to the following REMIC III Group I Regular Interests (other than Excess Special Hazard LossesREMIC III Regular Interests MT-IO-1, Excess Fraud Losses MT-IO-2, XX-XX-0, XX-XX-0, XX-XX-0, XX-XX-0, XX-XX-0 xxx XX-XX-8) in the specified percentages, as follows: first, to Uncertificated Accrued Interest payable to the REMIC III Regular Interests MT-I-1 and Excess Bankruptcy LossesMT-1-10 up to an aggregate amount equal to the excess of (a) occurring with respect to any the REMIC III Group I Mortgage Loan or Interest Loss Allocation Amount over (b) Prepayment Interest Shortfalls (to the extent not covered by Compensating Interest) relating to the Group I Loans for such Distribution Date, 98% and 2%, respectively; second, to the Uncertificated Principal Balances of the REMIC III Regular Interests MT-I-1 and MT-I-10 up to an aggregate amount equal to the REMIC III Group I Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated Principal Balances of REMIC III Regular Interests MT-I-1, 98%, MT- I-2, MT-I-3, MT-I-4, MT-X-0, XX-X-0, XX-X-0, XX-X-0 xxx XX-X-0, 0% xxx rata, and MT-I-10, 1%, until the Uncertificated Balance of each of REMIC III Regular Interests MT-I-2, MT-I-3, MT-X-0, XX-X-0, XX-X-0, XX-X-0, XX-X-0 xxx XX-X-0 have been reduced to zero. (ii) All Realized Losses on the Group II Mortgage Loan will Loans shall be allocated among on each Distribution Date to the outstanding Classes following REMIC III Group II Regular Interests in the specified percentages, as follows: first, to Uncertificated Accrued Interest payable to the REMIC III Regular Interests MT- II-1 and MT-II-6 up to an aggregate amount equal to the excess of (a) the REMIC III Group III Interest Loss Allocation Amount over (b) Prepayment Interest Shortfalls (to the extent not covered by Compensating Interest) relating to the Group II Loans for such Distribution Date, 98% and 2%, respectively; second, to the Uncertificated Principal Balances of the REMIC III Regular Interests MT-A Certificates II-1 and MT-II-6 up to an aggregate amount equal to the REMIC III Group IIII Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated Principal Balances of REMIC III Regular Interests MT-A CertificatesII-1, MT-II-2, MT-II-3, MT-II-4, MT-II-5 and MT-II-6, 98%, 1% and 1%, respectively, based on their Group Iuntil the Uncertificated Balances of REMIC III Regular Interests MT-A Interest Percentages II-2, MT-II-3, MT-II-4 and Group IIMT-A Interest PercentagesII-5 has been reduced to zero. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. (b) All Realized Losses on the Mortgage Loans shall be allocated as follows: (i) first, to Excess Cash Flow in the amounts and priority as provided in Section 4.02; (ii) second, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; (iii) third, to the Class B Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (iv) fourth, to the Class M-9 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (v) fifth, to the Class M-8 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vi) sixth, to the Class M-7 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vii) seventh, to the Class M-6 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (viii) eighth, to the Class M-5 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (ix) ninth, to the Class M-4 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (x) tenth, to the Class M-3 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xi) eleventh, to the Class M-2 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xii) twelfth, to the Class M-1 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; and (xiii) thirteenth, to the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates on a pro rata basis, based on their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date, until the aggregate Certificate Principal Balance of each such Class has been reduced to zero. (c) An allocation of a Realized Loss on a "pro rata basis" among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Accrued Certificate Interest thereon payable on such Distribution Date in the case of an interest portion of a Realized Loss. Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates, Class M Certificates until or Class B Certificates shall be made by reducing the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will shall be effected through the reduction made by operation of the applicable Class's Principal Balance. (b) With respect to any definition of "Accrued Certificate Interest" for each Class for such Distribution Date, . Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the priority of payment provisions of Section 4.02(c). Allocations of the principal portion of Excess Special Hazard Losses, Excess Fraud Debt Service Reductions shall be made by operation of the priority of payment provisions of Section 4.02(c). All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (d) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect allocated on each Distribution Date to the Class I-A-PO REMIC I Regular Interests and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date REMIC II Regular Interests as provided in the month following the month in which such recovery is received. When the Principal Balance definition of a Class of Certificates has been reduced to zeroREMIC I Realized Losses and REMIC II Realized Losses, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loanrespectively. (e) The interest portion Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of Excess Special Hazard Lossesthis Section, Excess Fraud Losses the definition of Accrued Certificate Interest and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan the operation of Section 4.02(c) shall be deemed allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after to the Class B Principal Balance has SB Certificates. Realized Losses allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to the REMIC III Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued Certificate Interest on the REMIC III Regular Interest SB-IO. Realized Losses allocated to the Overcollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce the principal balance of the REMIC III Regular Interest SB-PO until such principal balance shall have been reduced to zero, the zero and thereafter to reduce accrued and unpaid interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution DateREMIC III Regular Interest SB-IO.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. (b) All Realized Losses on the Mortgage Loans shall be allocated as follows: (i) first, to Excess Cash Flow in the amounts and priority as provided in Section 4.02; (ii) second, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; (iii) third, to the Class B Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (iv) fourth, to the Class M-10 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (v) fifth, to the Class M-9 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vi) sixth, to the Class M-8 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vii) seventh, to the Class M-7 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (viii) eighth, to the Class M-6 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (ix) ninth, to the Class M-5 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (x) tenth, to the Class M-4 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xi) eleventh, to the Class M-3 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xii) twelfth, to the Class M-2 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xiii) thirteenth, to the Class M-1 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; and (xiv) thirteenth, to the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates on a pro rata basis, based on their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date, until the aggregate Certificate Principal Balance of each such Class has been reduced to zero. (c) An allocation of a Realized Loss on a "pro rata basis" among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Accrued Certificate Interest thereon payable on such Distribution Date in the case of an interest portion of a Realized Loss. Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates, Class M Certificates until or Class B Certificates shall be made by reducing the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will shall be effected through the reduction made by operation of the applicable Class's Principal Balance. (b) With respect to any definition of "Accrued Certificate Interest" for each Class for such Distribution Date, . Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the priority of payment provisions of Section 4.02(c). Allocations of the principal portion of Excess Special Hazard Losses, Excess Fraud Debt Service Reductions shall be made by operation of the priority of payment provisions of Section 4.02(c). All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (d) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect allocated on each Distribution Date to the Class I-A-PO REMIC I Regular Interests and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date REMIC II Regular Interests as provided in the month following the month in which such recovery is received. When the Principal Balance definition of a Class of Certificates has been reduced to zeroREMIC I Realized Losses and REMIC II Realized Losses, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loanrespectively. (e) The interest portion Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of Excess Special Hazard Lossesthis Section, Excess Fraud Losses the definition of Accrued Certificate Interest and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan the operation of Section 4.02(c) shall be deemed allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after to the Class B Principal Balance has SB Certificates. Realized Losses allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to the REMIC III Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued Certificate Interest on the REMIC III Regular Interest SB-IO. Realized Losses allocated to the Overcollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce the principal balance of the REMIC III Regular Interest SB-PO until such principal balance shall have been reduced to zero, the zero and thereafter to reduce accrued and unpaid interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution DateREMIC III Regular Interest SB-IO.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the principal Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modification, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due during the related Due Period. The amount of each Realized Losses (Loss shall be evidenced by an Officers' Certificate. All Realized Losses, other than Debt Service Reductions, Excess Special Hazard Losses, Extraordinary Losses, Excess Bankruptcy Losses or Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will , shall be allocated as follows: first, to the Class B-6 B-3 Certificates until the Class B-6 Certificate Principal Balance thereof has been reduced to zero; second, to the Class B-5 B-2 Certificates until the Class B-5 Certificate Principal Balance thereof has been reduced to zero; third, to the Class B-4 B-1 Certificates until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-3 M-3 Certificates until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 M-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall be allocated among the Certificates of such Class based on their Percentage Interests. (d) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.Certificate

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date OCCURS. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. (b) All Realized Losses on the Mortgage Loans shall be allocated as follows: (i) first, to Excess Cash Flow in the amounts and priority as provided in Section 4.02; (ii) second, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; (iii) third, to the Class B Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (iv) fourth, to the Class M-9 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (v) fifth, to the Class M-8 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vi) sixth, to the Class M-7 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vii) seventh, to the Class M-6 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (viii) eighth, to the Class M-5 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (ix) ninth, to the Class M-4 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (x) tenth, to the Class M-3S Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xi) eleventh, to the Class M-2S Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xii) twelfth, to the Class M-1S Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; and (xiii) thirteenth, to the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates and Class A-4 Certificates, on a pro rata basis, based on their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date, until the Certificate Principal Balances of such Classes have been reduced to zero. (c) An allocation of a Realized Loss on a "pro rata basis" among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Accrued Certificate Interest thereon payable on such Distribution Date in the case of an interest portion of a Realized Loss. Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates, Class M Certificates until or Class B Certificates shall be made by reducing the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will shall be effected through the reduction made by operation of the applicable Class's Principal Balance. (b) With respect to any definition of "Accrued Certificate Interest" for each Class for such Distribution Date, . Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the priority of payment provisions of Section 4.02(c). Allocations of the principal portion of Excess Special Hazard Losses, Excess Fraud Debt Service Reductions shall be made by operation of the priority of payment provisions of Section 4.02(c). All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (d) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect allocated on each Distribution Date to the Class I-A-PO REMIC I Regular Interests and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date REMIC II Regular Interests as provided in the month following the month in which such recovery is received. When the Principal Balance definition of a Class of Certificates has been reduced to zeroREMIC I Realized Losses and REMIC II Realized Losses, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loanrespectively. (e) The interest portion Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of Excess Special Hazard Lossesthis Section, Excess Fraud Losses the definition of Accrued Certificate Interest and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan the operation of Section 4.02(c) shall be deemed allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after to the Class B Principal Balance has SB Certificates. Realized Losses allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to the REMIC III Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued Certificate Interest on the REMIC III Regular Interest SB-IO. Realized Losses allocated to the Overcollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce the principal balance of the REMIC III Regular Interest SB-PO until such principal balance shall have been reduced to zero, the zero and thereafter to reduce accrued and unpaid interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution DateREMIC III Regular Interest SB-IO.

Allocation of Realized Losses. (a) With respect All Realized Losses on the Mortgage Loans allocated to any Distribution Date, the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will Regular Certificate shall be allocated by the Trustee on each Distribution Date as follows: first, to the Class B-6 Certificates until the Class B-6 Principal Balance has been reduced to zeroNet Monthly Excess Cashflow; second, to the Class B-5 Certificates C Certificates, until the Class B-5 Certificate Principal Balance thereof has been reduced to zero; third, to the Class B-4 Certificates B-3 Certificates, until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-3 Certificates B-2 Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 Certificates B-1 Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates M-10 Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO M-9 Certificates, pro rata, based on until the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect Certificate Principal Balance thereof has been reduced to such losses occurring with respect to Group II Mortgage Loans, concurrentlyzero; eighth, to the Group II-A Certificates (other than Class M-8 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class II-A-PO Certificates) and Class II-A-PO M-7 Certificates, pro ratauntil the Certificate Principal Balance thereof has been reduced to zero; tenth, based to the Class M-6 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eleventh, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; twelfth, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; thirteenth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fourteenth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero and fifteenth, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero. All Realized Losses to be allocated to the Certificate Principal Balances of all Classes on any Distribution Date shall be so allocated after the Non-PO Fraction and actual distributions to be made on such date as provided above. All references above to the PO Fraction Certificate Principal Balance of any Class of Certificates shall be to the Certificate Principal Balance of such Mortgage LoansClass immediately prior to the relevant Distribution Date, respectivelybefore reduction thereof by any Realized Losses, in each case to be allocated to such Class of Certificates, on such Distribution Date. This Any allocation of Realized Losses will to a Mezzanine Certificate on any Distribution Date shall be effected through made by reducing the reduction Certificate Principal Balance thereof by the amount so allocated; any allocation of Realized Losses to a Class C Certificates shall be made first by reducing the amount otherwise payable in respect thereof pursuant to Section 4.01(d)(iv). No allocations of any Realized Losses shall be made to the Certificate Principal Balances of the applicable Class's Principal BalanceClass A Certificates or the Class P Certificates. (b) With respect to any Distribution Date, All Realized Losses on the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence Loans shall be allocated pro rata among by the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and Trustee on each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Distribution Date to the outstanding Classes REMIC 1 Regular Interest LT1 and REMIC 1 Regular Interest LT1PF until the Uncertificated Principal Balance of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of each such Determination Date and any such loss allocated REMIC 1 Regular Interest has been reduced to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall be allocated among the Certificates of such Class based on their Percentage Interests. (d) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan andzero; provided however, with respect to the Class A Certificates (other than first Distribution Date, all Realized Losses on the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Initial Group I Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously Loans shall be allocated to such Class on REMIC 1 Regular Interest LT1 until the Distribution Date in the month following the month in which such recovery is received. When the Uncertificated Principal Balance of a Class of Certificates each such REMIC 1 Regular Interest has been reduced to zero, such Class and all Realized Losses on the Subsequent Group I Mortgage Loans shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with REMIC 1 Regular Interest LT1PF until the preceding provisions, each outstanding Class Uncertificated Principal Balance thereof has been reduced to zero. All Realized Losses on the Group II Mortgage Loans shall be entitled to its pro rata share (determined as described above) of such excess up allocated by the Trustee on each Distribution Date to the amount REMIC 1 Regular Interest LT2 and REMIC 1 Regular Interest LT2PF until the Uncertificated Principal Balance of any unrecovered Realized Loss previously allocated each such REMIC 1 Regular Interest has been reduced to such Class. Notwithstanding the foregoing provisionszero; provided however, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loanthe first Distribution Date, as the case may be, the all Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions Losses on the Certificates and Initial Group II Mortgage Loans shall be allocated to REMIC 1 Regular Interest LT2 until the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Uncertificated Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect Balance of each Class of Certificates whose principal balances were previously such REMIC 1 Regular Interest has been reduced as a result of such to zero, and all Realized Loss being less than such Class would have received if such Recovery had Losses on the Subsequent Group II Mortgage Loans shall be allocated to REMIC 1 Regular Interest LT2PF until the Uncertificated Principal Balance thereof has been deposited in the Certificate Account on or prior reduced to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loanzero. (ec) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with With respect to any Group I the REMIC 2 Regular Interests, all Realized Losses on the Mortgage Loan or Group II Mortgage Loan Loans shall be allocated among (i) shall be allocated by the Trustee on each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after first to REMIC 2 Regular Interest I until the Class B Uncertificated Principal Balance has been reduced to zero, and second, to REMIC 2 Regular Interest I-1-A through REMIC 2 Regular Interest I-40-B, starting with the interest portion of lowest numerical denomination until such REMIC 2 Regular Interest has been reduced to zero, provided that, for REMIC 2 Regular Interests with the same numerical denomination, such Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will shall be allocated among pro rata between such REMIC 2 Regular Interests. (d) All Realized Losses on the outstanding Classes Mortgage Loans shall be deemed to have been allocated in the specified percentages, as follows: first, to Uncertificated Accrued Interest payable to the REMIC 3 Regular Interest LTAA and REMIC 3 Regular Interest LTZZ up to an aggregate amount equal to the REMIC 3 Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated Principal Balances of Group I-A Certificates REMIC 3 Regular Interest LTAA and Group II-A CertificatesREMIC 3 Regular Interest LTZZ up to an aggregate amount equal to the REMIC 3 Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTB3 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, based on their Group I-A until the Uncertificated Principal Balance of REMIC 3 Regular Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect LTB3 has been reduced to zero; fourth, to the preceding Distribution DateUncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTB2 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTB2 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTB1 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTB1 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM10 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM10 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM9 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM9 has been reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM8 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM8 has been reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM7 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM7 has been reduced to zero; tenth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM6 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM6 has been reduced to zero; eleventh, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM5 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM5 has been reduced to zero; twelfth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM4 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM4 has been reduced to zero; thirteenth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM3 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM3 has been reduced to zero; fourteenth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM2 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM2 has been reduced to zero; and fifteenth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM1 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM1 has been reduced to zero.

Allocation of Realized Losses. (a) With respect All Realized Losses on the Mortgage Loans allocated to any Distribution Date, the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will Regular Certificate shall be allocated by the Trustee on each Distribution Date as follows: first, as provided in Section 1.03, to the Class B-6 Certificates until interest accrued on the Class B-6 Principal Balance has been reduced to zeroC Certificates after the allocation thereto of certain interest shortfalls as provided in Section 1.03; second, to the Class B-5 C Certificates (determined for purposes of this Section 4.07 as the amount by which (A) the aggregate Uncertificated Principal Balance of the REMIC 1 Regular Interests immediately preceding such Distribution Date exceeds (B) the aggregate Certificate Principal Balance of the Class A Certificates, the Mezzanine Certificates and the Class P Certificates immediately preceding such Distribution Date), until the Class B-5 Certificate Principal Balance thereof has been reduced to zero; third, to the Class B-4 Certificates M-9 Certificates, until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-3 Certificates M-8 Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 Certificates M-7 Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates M-6 Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrentlyeleventh, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO M-1 Certificates, pro rata, based until the Certificate Principal Balance thereof has been reduced to zero. All Realized Losses to be allocated to the Certificate Principal Balances of all Classes on any Distribution Date shall be so allocated after the Non-PO Fraction and actual distributions to be made on such date as provided above. All references above to the PO Fraction Certificate Principal Balance of any Class of Certificates shall be to the Certificate Principal Balance of such Mortgage LoansClass immediately prior to the relevant Distribution Date, respectivelybefore reduction thereof by any Realized Losses, and (ii) with respect in each case to be allocated to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO of Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectivelyDistribution Date. This Any allocation of Realized Losses will to a Mezzanine Certificate on any Distribution Date shall be effected through made by reducing the reduction Certificate Principal Balance thereof by the amount so allocated; any allocation of Realized Losses to a Class C Certificate shall be made by reducing the amount otherwise payable in respect thereof pursuant to Section 4.01(d)(v). No allocations of any Realized Losses shall be made to the Certificate Principal Balances of the applicable Class's Principal BalanceClass A Certificates or the Class P Certificates. (b) With respect All Realized Losses on the Mortgage Loans shall be deemed to any Distribution Datehave been allocated first, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group REMIC 1 Regular Interest II Mortgage Loan allocable in an amount equal to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any aggregate Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall be allocated among the Certificates of such Class based on their Percentage Interests. (d) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than and the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of Mezzanine Certificates until the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Uncertificated Principal Balance of a Class of Certificates REMIC 1 Regular Interest II has been reduced to zero, such Class shall not be entitled second, to any share of such Recovery. In REMIC 2 Regular Interest I in an amount equal to the event that the amount of such Recovery exceeds the amount of such Recovery aggregate Realized Losses allocated to each outstanding the Certificates other than the Class in accordance A Certificates and the Mezzanine Certificates until the Uncertificated Principal Balance of REMIC 2 Regular Interest I has been reduced to zero and third, to REMIC 2 Regular Interest I-1-A through I-71-B, starting with the preceding provisions, lowest numerical denomination until each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned REMIC 1 Regular Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, provided that, for REMIC 1 Regular Interests with the interest portion of same numerical denomination, such Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will shall be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentagespro rata between such REMIC 1 Regular Interests. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (ai) With respect to any Distribution Date, the principal portion of Realized Losses on the Group I Mortgage Loans (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class I-B-6 Certificates until the Class I-B-6 Principal Balance has been reduced to zero; second, to the Class I-B-5 Certificates until the Class I-B-5 Principal Balance has been reduced to zero; third, to the Class I-B-4 Certificates until the Class I-B-4 Principal Balance has been reduced to zero; fourth, to the Class I-B-3 Certificates until the Class I-B-3 Principal Balance has been reduced to zero; fifth, to the Class I-B-2 Certificates until the Class I-B-2 Principal Balance has been reduced to zero; sixth, to the Class I-B-1 Certificates until the Class I-B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO CertificatesComponent, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and . (ii) with With respect to such losses any Distribution Date, the principal portion of Realized Losses on the Group II Mortgage Loans (other than Debt Service Reductions) occurring with respect to Group II Mortgage LoansLoans will be allocated as follows: first, to the Class II-B-6 Certificates until the Class II-B-6 Principal Balance has been reduced to zero; second, to the Class II-B-5 Certificates until the Class II-B-5 Principal Balance has been reduced to zero; third, to the Class II-B-4 Certificates until the Class II-B-4 Principal Balance has been reduced to zero; fourth, to the Class II-B-3 Certificates until the Class II-B-3 Principal Balance has been reduced to zero; fifth, to the Class II-B-2 Certificates until the Class II-B-2 Principal Balance has been reduced to zero; sixth, to the Class II-B-1 Certificates until the Class II-B-1 Principal Balance has been reduced to zero; and seventh, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO CertificatesComponent, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's or Component's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall be allocated among the Certificates of such Class based on their Percentage Interests. (dc) In After the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates B Principal Balance or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan Loan, as applicable, will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on upon their Group I-A Interest Percentages and Group II-A Interest Percentages. (fd) Realized Losses allocated in accordance with this Section 4.02 will be allocated as follows: (i) Liquidated Loan Losses on Liquidated Loans for which the Liquidation Proceeds were received during, and Bankruptcy Losses incurred in a period corresponding to, an Unscheduled Principal Receipt Period for Full Unscheduled Principal Receipts that is a Mid-Month Receipt Period will be allocated on the Determination Date in the month following the month in which such Mid-Month Receipt Period ended and (ii) Liquidated Loan Losses on Liquidated Loans for which the Liquidation Proceeds were received during, and Bankruptcy Losses incurred in a period corresponding to, an Unscheduled Principal Receipt Period for Full Unscheduled Principal Receipts that is a Prior Month Receipt Period will be allocated on the Determination Date in the second month following the month in which is such loss was incurred with Prior Month Receipt Period. (e) With respect to the preceding any Distribution Date, the principal portion of Realized Losses and recoveries attributable to previously allocated Realized Losses allocated pursuant to this Section 4.02 will be allocated to each Uncertificated Lower-Tier Interest in an amount equal to the amount allocated to its respective Corresponding Upper-Tier Class or Classes as provided above. (f) With respect to any Distribution Date, the interest portion of Realized Losses allocated pursuant to this Section 4.02 will be allocated to each Uncertificated Lower-Tier Interest in the same relative proportions as interest is allocated to such Uncertificated Lower-Tier Interest.

Allocation of Realized Losses. (a) With respect All Realized Losses on the Mortgage Loans allocated to any Distribution Date, REMIC II Regular Interest pursuant to Section 5.05(c) on the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will shall be allocated by the Trustee on each Distribution Date as follows: first, to the Class B-6 Certificates until the Class B-6 Principal Balance has been reduced to zeroExcess Spread; second, to the Class B-5 Certificates CE Interest and Class CE Certificates, until the Class B-5 Certificate Principal Balance or Uncertificated Principal Balance thereof, as applicable, has been reduced to zero; third, to the Class B-4 Certificates M-8 Certificates, until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-3 Certificates M-7 Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 Certificates M-6 Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates M-5 Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO M-4 Certificates, pro rata, based on until the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect Certificate Principal Balance thereof has been reduced to such losses occurring with respect to Group II Mortgage Loans, concurrentlyzero; eighth, to the Group II-Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eleventh, to the related Class or Classes of Class A Certificates (other than Certificates, on a PRO RATA basis, until the Certificate Principal Balances thereof have been reduced to zero; and twelfth, to the unrelated Class or Classes of Class A Certificates, on a PRO RATA basis, until the Certificate Principal Balances thereof have been reduced to zero; provided, however, any such Realized Losses otherwise allocable to the Class II-A-PO Certificates) and A-1 Certificates shall be allocated first to the Class II-A-PO A-2 Certificates, pro ratauntil the Certificate Principal Balance thereof has been reduced to zero, based and then to the Class II-A-1 Certificates, and any such Realized Losses otherwise allocable to the Class III-A-1 Certificates shall be allocated first to the Class III-A-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero, and then to the Class III-A-1 Certificates. All Realized Losses to be allocated to the Certificate Principal Balances of all Classes on any Distribution Date shall be so allocated after the Non-PO Fraction and actual distributions to be made on such date as provided above. All references above to the PO Fraction Certificate Principal Balance of any Class of Certificates shall be to the Certificate Principal Balance of such Mortgage LoansClass immediately prior to the relevant Distribution Date, respectively. This allocation before reduction thereof by any Realized Losses, in each case to be allocated to such Class of Realized Losses will be effected through the reduction of the applicable Class's Principal BalanceCertificates, on such Distribution Date. (b) With respect Any allocation of Realized Losses to a Class of Certificates on any Distribution Date, Date shall be made by reducing the principal portion Certificate Principal Balance thereof by the amount so allocated; any allocation of Excess Special Hazard Losses, Excess Fraud Realized Losses to a Class CE Interest and Excess Bankruptcy Class CE Certificates shall be made by reducing the amount otherwise payable in respect thereof pursuant to clause (G) of Section 5.04(a)(4). No allocations of any Realized Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable shall be made to the Class I-A-PO Certificate Principal Balance or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO CertificatesUncertificated Principal Balance, as applicable, in accordance with of the preceding sentence Class P Interest and the Class P Certificates. Notwithstanding the foregoing, no such allocation of any Realized Loss shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each made on a Distribution Date to any Class of Class B Certificates based on to the Group I-A Non-PO extent that such allocation would result in the reduction of the aggregate Certificate Principal Balance or Group II-A Non-PO Principal Balance in of all the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Distribution Date, after giving effect to all distributions and prior allocations of Realized Losses on the Mortgage Loans on such date, to an amount less than the aggregate Stated Principal Balance of all of the Mortgage Loans as of the first day of the month of such Distribution Date (such limitation, the "Loss Allocation Limitation"). In addition in no event will the Certificate Principal Balance of any Certificate be reduced more than once in respect of any particular amount both (i) allocable to such Certificate in respect of Realized Losses and any such loss allocated (ii) payable as principal to the Group II-A Holder of such Certificate from Remaining Excess Spread. As used herein, an allocation of a Realized Loss on a "PRO RATA basis" among two or more specified Classes of Certificates shall be allocated means an allocation on a PRO RATA basis, among the various 128 Classes so specified, to each such Class of Certificates on the subsequent Determination Date basis of their then outstanding Certificate Principal Balances prior to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of giving effect to distributions to be made on such Determination Distribution Date. (c) Any . All Realized Losses and all other losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (di) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated I Loans shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based allocated on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the each Distribution Date in to REMIC I Regular Interest I-1-A through REMIC I Regular Interest I-60-B, starting with the month following the month in which lowest numerical denomination until such recovery is received. When the Principal Balance of a Class of Certificates REMIC I Regular Interest has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance provided that, for REMIC I Regular Interests with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loansame numerical denomination, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) PRO RATA between such REMIC I Regular Interests. All Realized Losses on the Group II Loans shall be allocated on each Class of Group IDistribution Date to REMIC I Regular Interest II-1-A Certificates or Group IIthrough REMIC I Regular Interest II-60-A CertificatesB, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group starting with the lowest numerical denomination until such REMIC I Apportioned Regular Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, provided that, for REMIC I Regular Interests with the interest portion same numerical denomination, such Realized Losses shall be allocated PRO RATA between such REMIC I Regular Interests. All Realized Losses on the Group III Loans shall be allocated on each Distribution Date to REMIC I Regular Interest III-1-A through REMIC I Regular Interest III-60-B, starting with the lowest numerical denomination until such REMIC I Regular Interest has been reduced to zero, provided that, for REMIC I Regular Interests with the same numerical denomination, such Realized Losses shall be allocated PRO RATA between such REMIC I Regular Interests. (ii) The REMIC II Marker Percentage of all Realized Losses on the Mortgage Loans (without duplication of losses allocated pursuant to Section 1.02) shall be allocated by the Trustee on each Distribution Date to the following REMIC II Regular Interests in the specified percentages, as follows: first, to Uncertificated Accrued Interest payable to the REMIC II Regular Interest AA and REMIC II Regular Interest ZZ up to an aggregate amount equal to the REMIC II Interest Loss Allocation Amount, 98.00% and 2.00%, respectively; second, to the Uncertificated Principal Balances of the REMIC II Regular Interest AA and REMIC II Regular Interest ZZ up to an aggregate amount equal to the REMIC II Principal Loss Allocation Amount, 98.00% and 2.00%, respectively; third, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-8 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-8 has been reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-7 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-7 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-6 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-6 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-5 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-5 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-4 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated (iii) The REMIC II Sub WAC Allocation Percentage of all Realized Losses shall be applied after all distributions have been made on each Distribution Date first, so as to keep the Uncertificated Principal Balance of each REMIC II Regular Interest ending with the designation "B" equal to 0.01% of the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group; second, to each REMIC II Regular Interest ending with the designation "A" so that the Uncertificated Principal Balance of each such REMIC II Regular Interest is equal to 0.01% of the excess of (x) the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group over (y) the current Certificate Principal Balances of the Class A Certificates related to such Loan Group (except that if any such excess is a larger number than in the preceding distribution period, the least amount of Realized Losses (other than Excess Special Hazard Lossesshall be applied to such REMIC II Regular Interests such that the REMIC II Subordinated Balance Ratio is maintained); and third, Excess Fraud any remaining Realized Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will shall be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A to REMIC II Regular Interest Percentages and Group II-A Interest PercentagesXX. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect Prior to any Distribution each Determination Date, the Servicer shall determine (i) the total amount of Realized Losses, if any, incurred during the related Principal Prepayment Period; (ii) whether and to what extent such Realized Losses constitute Excess Losses; and (iii) the respective portions of such Realized Losses allocable to interest and to principal. (b) The principal portion of any Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will shall be allocated as follows: first, to the Class B-6 B-5 Certificates until the Class B-6 Outstanding Certificate Principal Balance of the Class B-5 Certificates has been reduced to zero; second, to the Class B-5 B-4 Certificates until the Class B-5 Outstanding Certificate Principal Balance of the Class B-4 Certificates has been reduced to zero; third, to the Class B-4 B-3 Certificates until the Class B-4 Outstanding Certificate Principal Balance of the Class B-3 Certificates has been reduced to zero; fourth, to the Class B-3 B-2 Certificates until the Class B-3 Outstanding Certificate Principal Balance of the Class B-2 Certificates has been reduced to zero; fifth, to the Class B-2 B-1 Certificates until the Class B-2 Outstanding Certificate Principal Balance of the Class B-1 Certificates has been reduced to zero; sixth, to the Class B-1 M Certificates until the Class B-1 Outstanding Certificate Principal Balance of the Class M Certificates has been reduced to zero; and seventh, to the Non-PO Class A Certificates on a pro rata basis until the Outstanding Certificate Principal Balance of the Non-PO Class A Certificates has been reduced to zero; provided, however, that any portion of any Realized Loss that would otherwise be allocated to the Class A-13, Class A-17 or Class A-19 Certificates in accordance with this paragraph will instead be allocated (i) in the case of the Class A-13 Certificates, to the Class A-14 Certificates until the Outstanding Certificate Principal Balance of the Class A-14 Certificates has been reduced to zero, (ii) in the case of the Class A-17 Certificates, to the Class A-18 Certificates until the Outstanding Certificate Principal Balance of the Class A-18 Certificates has been reduced to zero and (iii) in the case of the Class A-19 Certificates, to the Class A-20 Certificates until the Outstanding Certificate Principal Balance of the Class A-20 Certificates has been reduced to zero; provided further, however, that if a Realized Loss occurs with respect to a Discount Mortgage Loan (A) the amount of such Realized Loss equal to the product of (i) the amount of such Realized Loss and (ii) the PO Percentage with respect to such losses occurring with respect Discount Mortgage Loan will be allocated to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO CertificatesP Certificates and (B) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction remainder of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses Loss will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loanallocated as described above. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated among all Classes of Certificates on a pro rata among basis; provided, however, that the Group I-A Certificates (other than the Class I-A-applicable PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class Percentage of Class B Certificates based any Excess Losses on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates Discount Mortgage Loans shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO P Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any As used herein, an allocation of a Realized Loss on a "pro rata basis" among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their Outstanding Certificate Principal Balances (or, in the case of Class A-29 Certificates, the lesser of (i) the Original Certificate Principal Balance of such Class and (ii) the Outstanding Certificate Principal Balance of such Class) prior to giving effect to distributions to be made on such Distribution Date. All Realized Losses and all other losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby; provided, however, that the interest portion of any Excess Loss that would otherwise be allocated to the Class A-13, Class A-17 or Class A-19 in accordance with this Section 6.05(c) will instead be allocated (i) in the case of the Class A-13 Certificates, to the Class A-14 Certificates so long as the Class A-14 Certificates are outstanding, (ii) in the case of the Class A-17 Certificates, to the Class A-18 Certificates so long as the Class A-18 Certificates are outstanding and (iii) in the case of the Class A-19 Certificates, to the Class A-20 Certificates so long as the Class A-20 Certificates are outstanding. (d) In the event that there a recovery is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (made with respect to the Class I-A-PO and Class II-A-PO Certificatesany Realized Loss, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as Prepayment and deposited into the case may be, the Realized Loss previously recognized may be reversed Collection Account and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions distributed on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date OCCURS. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. (b) All Realized Losses on the Mortgage Loans shall be allocated as follows: (i) first, to Excess Cash Flow in the amounts and priority as provided in Section 4.02; (ii) second, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; (iii) third, to the Class M-10 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (iv) fourth, to the Class M-9 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (v) fifth, to the Class M-8 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (vi) sixth, to the Class M-7 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (vii) seventh, to the Class M-6 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (viii) eighth, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (ix) ninth, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (x) tenth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (xi) eleventh, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (xii) twelfth, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and (xiii) thirteenth, for losses on the Group I Loans to the Class A-I-1, Class A-I-2, Class A-I-3 and Class A-I-4 Certificates on a pro rata basis, based on their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date, until the Certificate Principal Balance of each such Class has been reduced to zero and for losses on the Group II Loans, to the Class A-II Certificates, until the Certificate Principal Balance thereof has been reduced to zero. (c) An allocation of a Realized Loss on a "pro rata basis" among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Accrued Certificate Interest thereon payable on such Distribution Date in the case of an interest portion of a Realized Loss. Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates until or Class M Certificates shall be made by reducing the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will shall be effected through the reduction made by operation of the applicable Class's Principal Balance. (b) With respect to any definition of "Accrued Certificate Interest" for each Class for such Distribution Date, . Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the priority of payment provisions of Section 4.02(c). Allocations of the principal portion of Excess Special Hazard Losses, Excess Fraud Debt Service Reductions shall be made by operation of the priority of payment provisions of Section 4.02(c). All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (d) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect allocated on each Distribution Date to the Class I-A-PO REMIC I Regular Interests, the REMIC II Regular Interests and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date REMIC III Regular Interests as provided in the month following the month in which such recovery is received. When the Principal Balance definition of a Class of Certificates has been reduced to zeroREMIC I Realized Losses, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisionsREMIC II Realized Losses and REMIC III Realized Losses, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loanrespectively. (e) The interest portion Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of Excess Special Hazard Lossesthis Section, Excess Fraud Losses the definition of Accrued Certificate Interest and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan the operation of Section 4.02(c) shall be deemed allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after to the Class B Principal Balance has SB Certificates. Realized Losses allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to REMIC IV Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued Certificate Interest on REMIC IV Regular Interest SB-IO. Realized Losses allocated to the Overcollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce the principal balance of REMIC IV Regular Interest SB-PO until such principal balance shall have been reduced to zero, the zero and thereafter to reduce accrued and unpaid interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group Ion REMIC IV Regular Interest SB-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest PercentagesIO. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect to any Distribution Date, the principal portion of Any Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II on the Mortgage Loans will be allocated on any Distribution Date, first, to the Class M-8 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, second, to the Class M-7 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, third, to the Class M-6 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, fourth, to the Class M-5 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, fifth, to the Class M-4 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, sixth, to the Class M-3 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, seventh, to the Class M-2 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, and eighth, to the Class M-1 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero. Thereafter, any remaining Realized Losses with respect to the Group I Loans will be allocated on any Distribution Date, first, to the Class I-A-3 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, and second, pro rata, to the Class I-A-2-2 Certificates, and the Class I-A-2-1 Certificates, in each case, in reduction of the Certificate Principal Balance thereof, until reduced to zero. Any remaining Realized Losses with respect to the Group II Loans will be allocated on any Distribution Date, first, pro rata, to the Class II-A-3-2 Certificates, and Class II-A-3-1 Certificates, in each case, in reduction of the Certificate Principal Balance thereof, until reduced to zero, and second, to the Class II-A-2 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero. Any remaining Realized Losses with respect to the Group III Loans will be allocated on any distribution date, first, pro rata, to the Class III-A-3-2 Certificates and Class III-A-3-1 Certificates, in each case, in reduction of the Certificate Principal Balance thereof, until reduced to zero, and second, to the Class III-A-2 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero. Any allocation of a Realized Loss to a Certificate will be made by reducing the Certificate Principal Balance thereof by the amount so allocated as of the Distribution Date in the month following the calendar month in which such Realized Loss was incurred. If, after taking into account Subsequent Recoveries, the amount of a Realized Loss is reduced, the amount of such Subsequent Recoveries will be applied to increase the Certificate Principal Balance of the Class M Certificates with the highest payment priority to which Realized Losses have been allocated, and then to increase the Certificate Principal Balance of the Class A Certificates with the highest payment priority to which Realized Losses have been allocated, but not by more than the amount of Realized Losses previously allocated to that Class of Certificates. The amount of any remaining Subsequent Recoveries will be applied to increase the Certificate Principal Balance of the Class of Certificates with the next highest payment priority, up to the amount of such Realized Losses previously allocated to that Class of Certificates, and so on. Holders of the Certificates will not be entitled to any payment in respect of any Accrued Certificate Interest on the amount of such increases for any Accrual Period preceding the Distribution Date on which such increase occurs. Any such increases shall be applied to the Certificate Principal Balance of each Certificate of such Class in accordance with its respective percentage interest. On each Distribution Date, if the aggregate Certificate Principal Balances of all Classes of the Class A Certificates and Class M Certificates exceeds the Aggregate Stated Principal Balances of the Mortgage Loans in Loan Group I, Loan Group II and Loan Group III after giving effect to distributions of principal and the allocation of all losses to these Certificates on that Distribution Date, that excess will be deemed a principal loss and will be allocated to the most junior Class of Class M Certificates then outstanding. With respect to the REMIC 1 Regular Interests, all Realized Losses on the Mortgage Loans shall be allocated by the Trustee on each Distribution Date as follows: first, to Uncertificated Accrued Interest payable to the Class B-6 Certificates REMIC 1 Regular Interest LT-AA and REMIC 1 Regular Interest LT-ZZ up to an aggregate amount equal to the REMIC 1 Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA and REMIC 1 Regular Interest LT-ZZ up to an aggregate amount equal to the REMIC 1 Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest LT-M8 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Class B-6 Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M8 has been reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest LT-M7 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M7 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest LT-M6 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M6 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest LT-M5 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M5 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest LT-M4 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M4 has been reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest LT-M3 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M3 has been reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest LT-M2 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M2 has been reduced to zero; tenth, to the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest LT-M1 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M1 has been reduced to zero; eleventh, (a) with respect to Realized Losses on the Group 1 Loans, first, to the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest LT-I-A-3 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 1 Regular Interest LT-I-A-3 has been reduced to zero, second, to the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest LT-I-A-2-2 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 1 Regular Interest LT-I-A-2-2 has been reduced to zero and third, to the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest LT-I-A-2-1 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 1 Regular Interest LT-I-A-2-1 has been reduced to zero and (b) with respect to Realized Losses on the Group 2 Loans, first, to the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest LT-II-A-3-2 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 1 Regular Interest LT-II-A-3-2 has been reduced to zero; second, to the Class B-5 Certificates until the Class B-5 Uncertificated Principal Balance has been reduced to zero; thirdBalances of REMIC 1 Regular Interest LT-AA, to the Class B-4 Certificates until the Class B-4 Principal Balance has been reduced to zero; fourthREMIC 1 Regular Interest LT-II-A-3-1 and REMIC 1 Regular Interest LT-ZZ, to the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth98%, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; 1% and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans1%, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to until the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall be allocated among the Certificates of such Class based on their Percentage Interests. (d) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Uncertificated Principal Balance of a Class of Certificates REMIC 1 Regular Interest LT-II-A-3-1 has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisionsand third, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount Uncertificated Principal Balances of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisionsREMIC 1 Regular Interest LT-AA, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group IREMIC 1 Regular Interest LT-A Certificates or Group II-A CertificatesA-2 and REMIC 1 Regular Interest LT-ZZ, as applicable98%, 1% and (ii) each Class of Class B Certificates1%, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentagerespectively, as applicable for until the related Distribution Date. In addition, after the Class B Uncertificated Principal Balance of REMIC 1 Regular Interest LT-II-A-2 has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect to any Distribution Date, the principal portion of All Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to on the Group I Mortgage Loans and allocated to any REMIC III Group II Mortgage Loans will I Regular Interest pursuant to Section 5.05(c) shall be allocated by the Trustee on each Distribution Date as follows: first, to Excess Spread with respect to Loan Group I as part of the Class B-6 Certificates until payment in respect of the Class B-6 Group I Extra Principal Balance has been reduced to zeroDistribution Amount for such Distribution Date; second, to the Class B-5 Certificates I-CE Interest and Class I-CE Certificates, until the Class B-5 Certificate Principal Balance or Uncertificated Principal Balance thereof, as applicable, has been reduced to zero; third, to the Class B-4 Certificates I-M-10 Certificates, until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-3 Certificates I-M-9 Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 Certificates I-M-8 Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates I-M-7 Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO M-6 Certificates) and , until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class I-A-PO M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class I-M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class I-M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eleventh, to the Class I-M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; twelfth, to the Class I-M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; thirteenth, to the related Class or Classes of Class I-A Certificates, on a pro ratarata basis, based until the Certificate Principal Balances thereof have been reduced to zero; and fourteenth, to the unrelated Class or Classes of Class I-A Certificates, on a pro rata basis, until the Certificate Principal Balances thereof have been reduced to zero. All Realized Losses on the Non-PO Fraction and Group II Mortgage Loans allocated to any REMIC III Group II Regular Interest pursuant to Section 5.05(d) shall be allocated by the PO Fraction of such Mortgage LoansTrustee on each Distribution Date as follows: first, respectively, and (ii) to Excess Spread with respect to such losses occurring with respect to Loan Group II Mortgage Loans, concurrentlyas part of the payment in respect of the Group II Extra Principal Distribution Amount for such Distribution Date; second, to the Group II-A Certificates (other than the Class II-A-PO Certificates) CE Interest and Class II-A-PO CE Certificates, until the Certificate Principal Balance or Uncertificated Principal Balance thereof, as applicable, has been reduced to zero; third, to the Class II-M-10 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class II-M-9 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class II-M-8 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class II-M-7 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class II-M-6 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class II-M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class II-M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class II-M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eleventh, to the Class II-M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; twelfth, to the Class II-M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; thirteenth, to the Class or Classes of Class II-A Certificates, on a pro ratarata basis, based until the Certificate Principal Balances thereof have been reduced to zero. All Realized Losses to be allocated to the Certificate Principal Balances of all Classes on any Distribution Date shall be so allocated after the Non-PO Fraction and actual distributions to be made on such date as provided above. All references above to the PO Fraction Certificate Principal Balance of any Class of Certificates shall be to the Certificate Principal Balance of such Mortgage LoansClass immediately prior to the relevant Distribution Date, respectively. This allocation before reduction thereof by any Realized Losses, in each case to be allocated to such Class of Realized Losses will be effected through the reduction of the applicable Class's Principal BalanceCertificates, on such Distribution Date. (b) With respect Any allocation of Realized Losses to a Class of Certificates or to a Class CE Interest on any Distribution DateDate shall be made by reducing the Certificate Principal Balance or Uncertificated Principal Balance thereof by the amount so allocated; any allocation of Realized Losses to Excess Spread shall be made by reducing the amount otherwise payable in respect of the related Class CE Interest and the related Class CE Certificates pursuant to clause (G) of Section 5.04(a)(4) or clause (G) of 5.04(b)(3), the principal portion as applicable. No allocations of Excess Special Hazard Losses, Excess Fraud any Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable shall be made to the Class I-A-PO Certificate Principal Balance or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO CertificatesUncertificated Principal Balance, as applicable, in accordance with of the preceding sentence Class P Interests and the Class P Certificates. Notwithstanding the foregoing, no such allocation of any Realized Loss shall be allocated pro rata among made on a Distribution Date to any Class of Certificates to the Group I-A extent that such allocation would result in the reduction of the aggregate Certificate Principal Balance of all the related Certificates as of such Distribution Date (other than the related Class I-A-PO Certificates) or Group II-A CE Certificates (other than the and related Class II-A-PO P Certificates), respectivelyafter giving effect to all distributions and prior allocations of Realized Losses on the Mortgage Loans on such date, to an amount less than the aggregate Stated Principal Balance of all of the related Mortgage Loans as of the first day of the month of such Distribution Date (such limitation, the “Loss Allocation Limitation”). In addition in no event will the Certificate Principal Balance of any Certificate be reduced more than once in respect of any particular amount both (i) allocable to such Certificate in respect of Realized Losses and (ii) payable as principal to the Holder of such Certificate from Remaining Excess Spread. As used herein, an allocation of a Realized Loss on a “pro rata basis” among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Class B Certificates based on the Group I-A Non-PO basis of their then outstanding Certificate Principal Balance or Group II-A Non-PO Principal Balance in the case of Balances prior to giving effect to distributions to be made on such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectivelyDistribution Date. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any All Realized Losses and all other losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based in proportion to the Percentage Interests evidenced thereby. (i) All Realized Losses on their the Group I Mortgage Loans in Subgroup I-1 shall be allocated on each Distribution Date to REMIC I Regular Interest I-1-A through REMIC I Regular Interest I-60-B, starting with the lowest numerical denomination, until the Uncertificated Principal Balance of each such REMIC I Group I Regular Interest has been reduced to zero; provided that, for REMIC I Group I Regular Interests with the same numerical denomination, such Realized Losses shall be allocated pro rata between such REMIC I Group I Regular Interests. All Realized Losses on the Group I Mortgage Loans in Subgroup I-2 shall be allocated on each Distribution Date to REMIC I Regular Interest II-1-A through REMIC I Regular Interest II-60-B, starting with the lowest numerical denomination, until the Uncertificated Principal Balance of each such REMIC I Group II Regular Interest has been reduced to zero; provided that, for REMIC I Group II Regular Interests with the same numerical denomination, such Realized Losses shall be allocated pro rata between such REMIC I Group II Regular Interests (ii) The REMIC III Group I Marker Allocation Percentage Interestsof all Realized Losses on the Group I Mortgage Loans shall be allocated by the Trustee on each Distribution Date to the following REMIC III Group I Regular Interests in the following specified percentages: first, to Uncertificated Accrued Interest payable to REMIC III Regular Interest I-AA and REMIC III Regular Interest I-ZZ up to an aggregate amount equal to the REMIC III Group I Interest Loss Allocation Amount (without duplication of shortfalls allocated pursuant to Section 1.02), 98.00% and 2.00%, respectively; second, to the Uncertificated Principal Balances of REMIC III Regular Interest I-AA and REMIC III Regular Interest I-ZZ up to an aggregate amount equal to the REMIC III Group I Principal Loss Allocation Amount, 98.00% and 2.00%, respectively; third, to the Uncertificated Principal Balances of REMIC III Regular Interest I-AA, REMIC III Regular Interest I-M-10 and REMIC III Regular Interest I-ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC III Regular Interest I-M-10 has been reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC III Regular Interest I-AA, REMIC III Regular Interest I-M-9 and REMIC III Regular Interest I-ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC III Regular Interest I-M-9 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC III Regular Interest I-AA, REMIC III Regular Interest I-M-8 and REMIC III Regular Interest I-ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC III Regular Interest I-M-8 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC III Regular Interest I-AA, REMIC III Regular Interest I-M-7 and REMIC III Regular Interest I-ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC III Regular Interest I-M-7 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC III Regular Interest I-AA, REMIC III Regular Interest I-M-6 and REMIC III Regular Interest I-ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC III Regular Interest I-M-6 has been reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC III Regular Interest I-AA, REMIC III Regular Interest I-M-5 and REMIC III Regular Interest I-ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC III Regular Interest I-M-5 has been reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC III Regular Interest I-AA, REMIC III Regular Interest I-M-4 and REMIC III Regular Interest I-ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC III Regular Interest I-M-4 has been reduced to zero; tenth, to the Uncertificated Principal Balances of REMIC III Regular Interest I-AA, REMIC III Regular Interest I-M-3 and REMIC III Regular Interest I-ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC III Regular Interest I-M-3 has been reduced to zero; eleventh, to the Uncertificated Principal Balances of REMIC III Regular Interest I-AA, REMIC III Regular Interest I-M-2 and REMIC III Regular Interest I-ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC III Regular Interest I-M-2 has been reduced to zero; twelfth, to the Uncertificated Principal Balances of REMIC III Regular Interest I-AA, REMIC III Regular Interest I-M-1 and REMIC III Regular Interest I-ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC III Regular Interest I-M-1 has been reduced to zero; thirteenth, to the Uncertificated Principal Balance of REMIC III Regular Interest I-AA, 98.00%, to the Uncertificated Principal Balances of the related REMIC III Regular Interests I-1A-1, I-1A-2, I-1A-3 and I-2A, 1.00% pro rata, and to the Uncertificated Principal Balance of REMIC III Regular Interest I-ZZ, 1.00%, until the Uncertificated Principal Balances of such REMIC III Regular Interests I-1A-1, I-1A-2, I-1A-3 and I-2A have been reduced to zero; and fourteenth, to the Uncertificated Principal Balance of REMIC III Regular Interest I-AA, 98.00%, to the Uncertificated Principal Balances of the unrelated REMIC III Regular Interests I-1A-1, I-1A-2, I-1A-3 and I-2A, 1.00% pro rata, and to the Uncertificated Principal Balance of REMIC III Regular Interest I-ZZ, 1.00%, until the Uncertificated Principal Balances of such REMIC III Regular Interests I-1A-1, I-1A-2, I-1A-3 and I-2A have been reduced to zero. (iii) The REMIC III Group I Sub WAC Allocation Percentage of all Realized Losses on the Group I Mortgage Loans shall be allocated by the Trustee on each Distribution Date after all distributions have been made on each Distribution Date first, so as to keep the Uncertificated Principal Balance of each REMIC III Group I Regular Interest ending with the designation “Grp” equal to 0.01% of the aggregate Stated Principal Balance of the Group I Mortgage Loans in the related Subgroup; second, to each REMIC III Group I Regular Interest ending with the designation “Sub”, so that the Uncertificated Principal Balance of each such REMIC III Group I Regular Interest is equal to 0.01% of the excess of (x) the aggregate Stated Principal Balance of the Group I Mortgage Loans in the related Subgroup over (y) the current aggregate Certificate Principal Balance of the Class I-A Certificates related to such Subgroup (except that if any such excess is a larger number than in the preceding distribution period, the least amount of Realized Losses shall be applied to such REMIC III Group I Regular Interests such that the REMIC III Group I Subordinated Balance Ratio is maintained); and third, to REMIC III Regular Interest I-XX. (d) In (i)All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Group II Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based allocated on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the each Distribution Date in to REMIC II Regular Interest I-1-A through REMIC II Regular Interest I-60-B, starting with the month following lowest numerical denomination, until the month in which such recovery is received. When the Uncertificated Principal Balance of a Class of Certificates each such REMIC II Regular Interest has been reduced to zero; provided that, for REMIC II Regular Interests with the same numerical denomination, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group between such REMIC II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest PercentagesRegular Interests. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect All Realized Losses on the Mortgage Loans allocated to any Distribution Date, the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will Regular Certificate shall be allocated by the Trustee on each Distribution Date as follows: first, to the Class B-6 Certificates until the Class B-6 Principal Balance has been reduced to zeroNet Monthly Excess Cashflow; second, to the Class B-5 Certificates C Certificates, until the Class B-5 Certificate Principal Balance thereof has been reduced to zero; third, to the Class B-4 Certificates Certificates, until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-3 Certificates Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 Certificates Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class M-10 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class M-9 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class M-8 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class M-7 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eleventh, to the Class M-6 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; twelfth, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; thirteenth, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fourteenth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fifteenth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero and sixteenth, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero. All Realized Losses to be allocated to the Certificate Principal Balances of all Classes on any Distribution Date shall be so allocated after the actual distributions to be made on such date as provided above. All references above to the Certificate Principal Balance of any Class of Certificates shall be to the Certificate Principal Balance of such Class immediately prior to the relevant Distribution Date, before reduction thereof by any Realized Losses, in each case to be allocated to such Class of Certificates, on such Distribution Date. Any allocation of Realized Losses to a Mezzanine Certificate on any Distribution Date shall be made by reducing the Certificate Principal Balance thereof by the amount so allocated; any allocation of Realized Losses to a Class C Certificates shall be made first by reducing the amount otherwise payable in respect thereof pursuant to Section 4.01(d)(iv). No allocations of any Realized Losses shall be made to the Certificate Principal Balances of the Class A Certificates or the Class P Certificates. (b) All Realized Losses on the Group I Mortgage Loans shall be allocated by the Trustee on each Distribution Date to the REMIC 1 Regular Interest LT1 and REMIC 1 Regular Interest LT1PF until the Uncertificated Principal Balance of each such REMIC 1 Regular Interest has been reduced to zero; provided however, with respect to the first three Distribution Dates, all Realized Losses on the Initial Group I Mortgage Loans shall be allocated to REMIC 1 Regular Interest LT1 until the Uncertificated Principal Balance of each such REMIC 1 Regular Interest has been reduced to zero, and all Realized Losses on the Subsequent Group I Mortgage Loans shall be allocated to REMIC 1 Regular Interest LT1PF until the Uncertificated Principal Balance thereof has been reduced to zero. All Realized Losses on the Group II Mortgage Loans shall be allocated by the Trustee on each Distribution Date to the REMIC 1 Regular Interest LT2 and REMIC 1 Regular Interest LT2PF until the Uncertificated Principal Balance of each such REMIC 1 Regular Interest has been reduced to zero; provided however, with respect to the first three Distribution Dates, all Realized Losses on the Initial Group II Mortgage Loans shall be allocated to REMIC 1 Regular Interest LT2 until the Uncertificated Principal Balance of each such REMIC 1 Regular Interest has been reduced to zero, and all Realized Losses on the Subsequent Group II Mortgage Loans shall be allocated to REMIC 1 Regular Interest LT2PF until the Uncertificated Principal Balance thereof has been reduced to zero. (c) All Realized Losses on the Mortgage Loans shall be deemed to have been allocated in the specified percentages, as follows: first, to Uncertificated Accrued Interest payable to the REMIC 2 Regular Interest LTAA and REMIC 2 Regular Interest LTZZ up to an aggregate amount equal to the REMIC 2 Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA and REMIC 2 Regular Interest LTZZ up to an aggregate amount equal to the REMIC 2 Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTB4 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTB4 has been reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTB3 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTB3 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTB2 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTB2 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTB1 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTB1 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM10 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM10 has been reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM9 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM9 has been reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM8 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM8 has been reduced to zero; tenth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM7 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM7 has been reduced to zero; eleventh, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM6 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM6 has been reduced to zero; twelfth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM5 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM5 has been reduced to zero; thirteenth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM4 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM4 has been reduced to zero; fourteenth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM3 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM3 has been reduced to zero; fifteenth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM2 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM2 has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrentlysixteenth, to the Group I-A Certificates (other than the Class I-A-PO Certificates) Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM1 and Class I-A-PO CertificatesREMIC 2 Regular Interest LTZZ, pro rata98%, based on the Non-PO Fraction 1% and the PO Fraction of such Mortgage Loans1%, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to until the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall be allocated among the Certificates of such Class based on their Percentage Interests. (d) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Uncertificated Principal Balance of a Class of Certificates REMIC 2 Regular Interest LTM1 has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. Prior to each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modification, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due during the related Due Period. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. All Realized Losses shall be allocated as follows: first, to the Class B-3 Certificates until the Certificate Principal Balance thereof has been reduced to zero; second, to the Class B-2 Certificates until the Certificate Principal Balance thereof has been reduced to zero; third, to the Class B-1 Certificates until the Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class M-3 Certificates until the Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class M-2 Certificates until the Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class M-1 Certificates until the Certificate Principal Balance thereof has been reduced to zero; and, thereafter, such Realized Losses shall be allocated (aA) With respect in the case of a Group I Loan, to the Group I Certificates and the Class X-PO-I Component, on a pro rata basis, and (B) in the case of a Group II Loan, to the Group II Certificates and the Class X-PO-II Component, on a pro rata basis; provided, however, that after the Credit Support Depletion Date, Realized Losses otherwise allocable to the Class I-A-1 Certificates will be allocated to the Class I-A-2 Certificates until the Certificate Principal Balance of the Class I-A-2 Certificates has been reduced to zero; Realized Losses otherwise allocable to the Class II-A-1 Certificates and Class II-A-2 Certificates will be allocated to the Class II-A-3 Certificates until the Certificate Principal Balance of the Class II-A-3 Certificates has been reduced to zero; and, thereafter, Realized Losses otherwise allocable to the Class II-A-1 Certificates will be allocated to the Class II-A-2 Certificates until the Certificate Principal Balance of the Class II-A-2 Certificates has been reduced to zero. On any Distribution Date, Realized Losses will be allocated as set forth herein before distributions of principal on the Certificates as set forth herein. As used herein, an allocation of a Realized Loss on a "pro rata basis" among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Accrued Certificate Interest thereon payable on such Distribution Date (without regard to any Compensating Interest for such Distribution Date) in the case of an interest portion of a Realized Loss. Except as provided in the following sentence, any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will a Class of Certificates shall be allocated as follows: first, to made by reducing the Class B-6 Certificates until the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; second, to provided that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This Any allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable (other than Debt Service Reductions) to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal Subordinate Certificates then outstanding with the product Lowest Priority shall be made by operation of the definition of "Certificate Principal Balance" and by operation of the provisions of Section 4.02(a). Allocations of the interest portions of Realized Losses (other than any interest rate reduction resulting from a Servicing Modification) shall be made in proportion to the amount of any such principal loss Accrued Certificate Interest and by operation of the PO Fraction for such Mortgage Loandefinition of "Accrued Certificate Interest" and by operation of the provisions of Section 4.02(a). The Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the provisions of Section 4.02(a). Allocations of the principal portion of any Excess Special Hazard Losses, Excess Fraud Debt Service Reductions shall be made by operation of the provisions of Section 4.02(a). All Realized Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their Percentage Interests. (d) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect proportion to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Percentage Interests evidenced thereby. Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, the Uncertificated REMIC I Regular Interests as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date specified in the second month following the month in which such loss was incurred with respect to the preceding Distribution Datedefinition of REMIC I Realized Losses.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the principal portion Master Servicer, based solely on the information provided by the related Servicer, shall determine the amount of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring if any, with respect to Group I Mortgage each Loan. (b) Realized Losses on Loans and Group II Mortgage Loans will shall be allocated as follows: (i) for losses allocable to principal, (A) first, sequentially, to the Class B-6 Certificates B-12, Class B-11, Class B-10, Class B-9, Class B-8, Class B-7, Class B-6, Class B-5, Class B-4, Class B-3, Class B-2 and Class B-1 Certificates, in that order, until the Class B-6 Certificate Principal Balance has of each such Class been reduced to zero; , (B) second, to the Class B-5 A-2 and Class AI-2 Certificates until the Class B-5 their Certificate Principal Balance has been reduced to zero; third, to the Class B-4 Certificates until the Class B-4 Principal Balance has been reduced to zero; fourth, to the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has Balances have been reduced to zero; and seventh(C) third, to the Class A-1 and Class AI-1 Certificates until their Certificate Principal Balances have been reduced to zero; provided, however, that following the Credit Support Depletion Date, if any loss is incurred (ix) with respect to such losses occurring with respect to Group I Mortgage Loansa Discount Loan, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Discount Fraction of such Mortgage Loans, respectively, loss will first be allocated to the Class PO Certificates and the remainder of such loss will be allocated as described above in clauses (i)(B) and (i)(C); and (ii) with respect for losses allocable to such losses occurring with respect to Group II Mortgage Loansinterest, concurrently(a) first, sequentially, to the Group II-A Certificates (other than the Class II-A-PO Certificates) B-12, Class B-11, Class B-10, Class B-9, Class B-8, Class B-7, Class B-6, Class B-5, Class B-4, Class B-3, Class B-2 and Class II-A-PO B-1 Certificates, pro ratain that order, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the in reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of accrued but unpaid interest thereon until the amount of any interest accrued on such principal loss and the PO Fraction for Certificate on such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall be allocated among the Certificates of such Class based on their Percentage Interests. (d) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share and then in reduction of the Certificate Principal Balance of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to Certificate until the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance thereof has been reduced to zero, (b) second, to the interest portion of Class A-2 and Class AI-2 Certificates for which such Realized Losses were incurred, by Pro Rata Allocation, in reduction of accrued but unpaid interest thereon until the amount of interest accrued on such Certificate has been reduced to zero and then with respect to the Class A-2 and Class AI-2 Certificates, in reduction of the Certificate Principal Balance of each such Certificate until the aggregate of the Certificate Principal Balances thereof have been reduced to zero; and (other than Excess Special Hazard Lossesc) third, Excess Fraud to the Class A-1 and Class AI-1 Certificates for which such Realized Losses were incurred, by Pro Rata Allocation, in reduction of accrued but unpaid interest thereon until the amount of interest accrued on such Certificate has been reduced to zero and Excess Bankruptcy Losses) occurring then with respect to the Class A-1 and Class AI-1 Certificates, in reduction of the Certificate Principal Balance of each such Certificate until the aggregate of the Certificate Principal Balances thereof have been reduced to zero. In addition, to the extent the related Servicer receives Subsequent Recoveries with respect to any Group I Mortgage Loan or Group II Mortgage defaulted Loan, the amount of the Realized Loss with respect to that defaulted Loan will be allocated among reduced to the outstanding Classes extent such Subsequent Recoveries are applied to reduce the Certificate Principal Balance of Group I-A any Class of Certificates on any Distribution Date. In the event that a Servicer receives any Subsequent Recoveries, such Subsequent Recoveries shall be distributed as part of the Available Distribution Amount in accordance with the priorities in Section 4.1, and Group II-A Certificatesthe Certificate Principal Balance of each Class of Subordinate Certificates that has been reduced by the allocation of a Realized Loss to such Certificate shall be increased, respectivelyin order of seniority, based by the amount of such Subsequent Recoveries. Holders of such Certificates are not entitled to any payment in respect of current interest on their Group I-A the amount of such increases for any Interest Percentages and Group II-A Interest PercentagesAccrual Period preceding the Distribution Date on which such increase occurs. (fc) Realized Losses allocated in accordance with this Section 4.02 On each Distribution Date, if the aggregate Certificate Principal Balance of the Senior Certificates (other than the Interest Only Certificates) and Subordinate Certificates exceeds the aggregate Principal Balance of the Loans and any remaining Pre-Funded Amount (after giving effect to distributions of principal and the allocation and reimbursement of all losses on the related Certificates on such Distribution Date), such excess will be deemed a principal loss and will be allocated to the Subordinate Certificates in reverse order of seniority until the Certificate Principal Balance of each such Class has been reduced to zero. If the Certificate Principal Balance of each Class of Subordinate Certificates has been reduced to zero and the aggregate Certificate Principal Balance of the Senior Certificates (other than the Interest Only Certificates) exceeds the aggregate Principal Balance of the Loans (after giving effect to distributions of principal and the allocation and reimbursement of all losses on the Determination Date in the second month following the month in which Certificates on such Distribution Date), such excess will be deemed a principal loss was incurred with respect and will be allocated, (i) first, to the preceding Distribution DateClass A-2 and Class AI-2 Certificates, by Pro Rata Allocation, until their respective Certificate Principal Balances have been reduced to zero and (ii) second, to the Class A-1 and Class AI-1 Certificates, by Pro Rata Allocation, until their respective Certificate Principal Balances have been reduced to zero.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the principal portion Master Servicer, based solely on the information provided by the related Servicer, shall determine the amount of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring if any, with respect to Group I Mortgage each Loan. Realized Losses on the Loans for any Distribution Date will first, cause a reduction in Net Monthly Excess Cash Flow for that Distribution Date, second, reduce the available Net Swap Payments from the Certificate Swap Provider, if any, for that Distribution Date, and Group II Mortgage third cause a reduction in the Certificate Principal Balance of the Class CE Certificates for that Distribution Date, until the Certificate Principal Balance thereof has been reduced to zero. To the extent that Realized Losses on a Distribution Date cause the aggregate Certificate Principal Balance of the Class A Certificates, Class M and Class P Certificates, after taking into account all distributions on such Distribution Date, to exceed the aggregate Principal Balance of the Loans (including amounts on deposit in the Pre-Funding Account) as of the last day of the related Due Period, such excess will be allocated as follows: first, to the Class B-6 Certificates until the Class B-6 Principal Balance has been reduced to zero; secondM-10 Certificates, second to the Class B-5 Certificates until the Class B-5 Principal Balance has been reduced to zero; M-9 Certificates, third, to the Class B-4 Certificates until the Class B-4 Principal Balance has been reduced to zero; M-8 Certificates, fourth, to the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; M-7 Certificates, fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; M-6 Certificates, sixth, to the Class B-1 Certificates until M-5 Certificates, seventh, to the Class B-1 M-4 Certificates; eighth, to the Class M-3 Certificates, ninth, to the Class M-2 Certificates; tenth, to the Class M-1 Certificates, eleventh, to the Class A-3 Certificates, twelfth to the Class A-2, Class A-6 and Class A-7 Certificates, on a pro rata basis, and thirteenth to the Class A-1, Class A-4 and Class A-5 Certificates, on a pro rata basis. In addition, to the extent the related Servicer receives Subsequent Recoveries with respect to any defaulted Loan, the amount of the Realized Loss with respect to that defaulted Loan will be reduced to the extent such Subsequent Recoveries are applied to reduce the Certificate Principal Balance has of any Class of Certificates on any Distribution Date. Any allocation of Realized Losses to a Class A Certificate or Class M Certificate on any Distribution Date shall be made by reducing the Certificate Principal Balance thereof by the amount so allocated as of such Distribution Date after all distributions on such Distribution Date have been made. Any allocation of Realized Losses to a Class CE Certificates shall be made by reducing the amount otherwise payable in respect thereof pursuant to Section 4.1(a)(iii)(i). No allocations of Realized Losses shall be made to the Class P Certificates. Notwithstanding anything to the contrary in this Agreement, in no event will the Certificate Principal Balance of any Class A Certificate or Class M Certificate be reduced to zero; and seventh, more than once in respect of any particular amount both (i) with respect allocable to such losses occurring with Class A Certificate or Class M Certificate in respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, Realized Losses and (ii) with respect payable as principal to the Holder of such losses occurring with respect to Group II Mortgage LoansCertificate from Net Monthly Excess Cashflow and amounts on deposit in the Certificate Swap Account. As used herein, concurrentlyany allocation of a Realized Loss on a “pro rata basis” among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to the Group II-A each such Class of Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Mortgage Loans, respectivelyDistribution Date. This allocation of All Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage Interests. (d) Interests evidenced thereby. Any Subsequent Recoveries collected by the Servicers will be distributed as part of the Available Distribution Amount in accordance with the priorities described under Section 4.1. In addition, the event Certificate Principal Balance of each Class of Certificates that there is a Recovery has been reduced by the allocation of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificatessuch Certificate will be increased, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, on a pro rata basis based on the PO Fraction of such Mortgage Loan and, related Allocated Realized Loss Amount with respect to the Class A Certificates (other than Certificates, and in order of seniority with respect to the Class I-A-PO and Class II-A-PO Certificates) and Class B M Certificates, based on their pro rata share of by the Non-PO Fraction amount of such Mortgage Loan) of Subsequent Recoveries, but only to the extent that such Recovery up to Certificate has not been reimbursed for the amount of such Realized Loss previously (or a portion thereof) allocated to such Class Certificate from Net Monthly Excess Cashflow or from amounts on the Distribution Date deposit in the month following the month in which Certificate Swap Account. Holders of such recovery is received. When the Principal Balance of a Class of Certificates has been reduced to zero, such Class shall will not be entitled to any share payment in respect of such Recovery. In the event that current interest on the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of increases for any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day Interest Accrual Period preceding the Distribution Date following on which such increase occurs. All reductions in the Applicable Unscheduled Certificate Principal Receipt Period in which the Mortgage Loan became Balance of a Liquidated Loan, such Recovery may, at the sole discretion Certificate effected by distributions of the Master Servicer, be treated as a repurchase principal or an Unscheduled Principal Receipt allocations of Realized Losses with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may Loans made on any Distribution Date shall be reversed and treated for binding upon all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment Holders of such amount as a repurchase Certificate and of any Certificate issued upon the registration of transfer or as an Unscheduled Principal Receiptexchange therefor or in lieu thereof, as the case may be; provided that whether or not such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of distribution is noted on such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated LoanCertificate. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (aA) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. All Realized Losses on the Mortgage Loans shall be allocated as follows: first, to the Excess Cash Flow as part of the Principal Distribution Amount as provided in Section 4.02(c), to the extent of the Excess Cash Flow for such Distribution Date; second, to Net Swap Payments received by the Supplemental Interest Trust on that Distribution Date; third, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; fourth, to the Class B Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class M-8 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class M-7 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class M-6 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eleventh, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; twelfth, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; thirteenth, to the Class A-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and fourteenth, to the Class A-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero. No Realized Losses will be allocated to the Class A-1 Certificates. (B) Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 M Certificates or Class B Certificates on any Distribution Date shall be made by reducing the Certificate Principal Balance thereof by the amount so allocated, which allocation shall be deemed to have occurred on such Distribution Date, until the Class B-6 Certificate Principal Balance thereof has been reduced to zero; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class M Certificates or Class B Certificates based on any Distribution Date shall be made by operation of the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case definition of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of "Accrued Certificate Interest" for each Class for such Distribution Date. Allocations of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be allocated on made by operation of the subsequent Determination Date to the outstanding Classes priority of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as payment provisions of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Section 4.02(c). All Realized Losses and all other losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (dC) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Losses shall be entitled allocated among the REMIC I Regular Interests pursuant to its share the definition of REMIC I Realized Losses and the REMIC II Regular Interests pursuant to the definition of REMIC II Realized Losses. (with respect D) Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of this Section, the definition of Accrued Certificate Interest and the operation of Section 4.02(c) shall be deemed allocated to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A SB Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisionsNotional Amount thereof. Realized Losses allocated to the Class SB Certificates shall, each outstanding Class to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to REMIC III Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section shall be entitled deemed to its pro rata share reduce Accrued Certificate Interest on REMIC III Regular Interest SB-IO. Realized Losses allocated to the Overcollateralization Amount pursuant to paragraph (determined as described aboveb) of such excess up this Section shall be deemed first to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to reduce the principal balances balance of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of REMIC III Regular Interest SB-PO until such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would balance shall have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the zero and thereafter to reduce accrued and unpaid interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group Ion REMIC III Regular Interest SB-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest PercentagesIO. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect All Realized Losses on the Mortgage Loans allocated to any Distribution Date, the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will Regular Certificate shall be allocated by the Trustee on each Distribution Date as follows: first, as provided in Section 1.03, to the Class B-6 Certificates until interest accrued on the Class B-6 Principal Balance has been reduced to zeroC Certificates after the allocation thereto of certain interest shortfalls as provided in Section 1.03; second, to the Class B-5 C Certificates (determined for purposes of this Section 4.07 as the amount by which (A) the aggregate Uncertificated Principal Balance of the REMIC 1 Regular Interests immediately preceding such Distribution Date exceeds (B) the aggregate Certificate Principal Balance of the Class A Certificates, the Mezzanine Certificates and the Class P Certificates immediately preceding such Distribution Date), until the Class B-5 Certificate Principal Balance thereof has been reduced to zero; third, to the Class B-4 Certificates M-9 Certificates, until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-3 Certificates M-8 Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 Certificates M-7 Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates M-6 Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrentlyeleventh, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO M-1 Certificates, pro rata, based until the Certificate Principal Balance thereof has been reduced to zero. All Realized Losses to be allocated to the Certificate Principal Balances of all Classes on any Distribution Date shall be so allocated after the Non-PO Fraction and actual distributions to be made on such date as provided above. All references above to the PO Fraction Certificate Principal Balance of any Class of Certificates shall be to the Certificate Principal Balance of such Mortgage LoansClass immediately prior to the relevant Distribution Date, respectivelybefore reduction thereof by any Realized Losses, and (ii) with respect in each case to be allocated to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO of Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectivelyDistribution Date. This Any allocation of Realized Losses will to a Mezzanine Certificate on any Distribution Date shall be effected through made by reducing the reduction Certificate Principal Balance thereof by the amount so allocated; any allocation of Realized Losses to a Class C Certificate shall be made by reducing the amount otherwise payable in respect thereof pursuant to Section 4.01(d)(v). No allocations of any Realized Losses shall be made to the Certificate Principal Balances of the applicable Class's Principal BalanceClass A Certificates or the Class P Certificates. (b) With respect All Realized Losses on the Mortgage Loans shall be deemed to any Distribution Datehave been allocated first, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group REMIC 1 Regular Interest II Mortgage Loan allocable in an amount equal to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any aggregate Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall be allocated among the Certificates of such Class based on their Percentage Interests. (d) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than and the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of Mezzanine Certificates until the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Uncertificated Principal Balance of a Class of Certificates REMIC 1 Regular Interest II has been reduced to zero, such Class shall not be entitled second, to any share of such Recovery. In REMIC 2 Regular Interest I in an amount equal to the event that the amount of such Recovery exceeds the amount of such Recovery aggregate Realized Losses allocated to each outstanding the Certificates other than the Class in accordance A Certificates and the Mezzanine Certificates until the Uncertificated Principal Balance of REMIC 2 Regular Interest I has been reduced to zero and third, to REMIC 2 Regular Interest I-1-A through I-63-B, starting with the preceding provisions, lowest numerical denomination until each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned REMIC 1 Regular Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, provided that, for REMIC 1 Regular Interests with the interest portion of same numerical denomination, such Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will shall be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentagespro rata between such REMIC 1 Regular Interests. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the principal portion Master Servicer shall determine, based on information provided to it by a Servicer, as to each Mortgage Loan and REO Property: (i) the total amount of Realized Losses, if any, incurred in connection with any Final Recovery Determinations made during the related Prepayment Period; and (ii) the respective portions of such Realized Losses allocable to interest and allocable to principal. Prior to each Distribution Date, the Master Servicer, based on information provided to it by the related Servicer, shall also determine as to each Mortgage Loan: (other than i) the total amount of Realized Losses, if any, incurred in connection with any Deficient Valuations made during the related Prepayment Period; and (ii) the total amount of Realized Losses, if any, incurred in connection with Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Reductions in respect of Monthly Payments due during the related Due Period. (b) All Realized Losses and Excess Bankruptcy Losses) occurring with respect to Group I on the Mortgage Loans and Group II Mortgage Loans will shall be allocated by the Trust Administrator on each Distribution Date as follows: first, to the Class B-6 Certificates until the Class B-6 Principal Balance has been reduced to zeroNet Monthly Excess Cashflow; second, to the Class B-5 Certificates CE Certificates, until the Class B-5 Certificate Principal Balance thereof has been reduced to zero; third, to the Class B-4 Certificates M-11 Certificates, until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-3 Certificates M-10 Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 Certificates M-9 Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates M-8 Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class M-7 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class M-6 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eleventh, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; twelfth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrentlythirteenth, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO M-1 Certificates, pro rata, based until the Certificate Principal Balance thereof has been reduced to zero. All Realized Losses to be allocated to the Certificate Principal Balances of all Classes on any Distribution Date shall be so allocated after the Non-PO Fraction and actual distributions to be made on such date as provided above. All references above to the PO Fraction Certificate Principal Balance of any Class of Certificates shall be to the Certificate Principal Balance of such Mortgage LoansClass immediately prior to the relevant Distribution Date, respectivelybefore reduction thereof by any Realized Losses, and (ii) with respect in each case to be allocated to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO of Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectivelyDistribution Date. This Any allocation of Realized Losses will to a Mezzanine Certificate on any Distribution Date shall be effected through made by reducing the reduction Certificate Principal Balance thereof by the amount so allocated; any allocation of Realized Losses to a Class CE Certificate shall be made by reducing the amount otherwise payable in respect thereof pursuant to Section 4.01(a)(5)(iv). No allocations of any Realized Losses shall be made to the Certificate Principal Balances of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A the Class P Certificates. As used herein, an allocation of a Realized Loss on a "PRO RATA basis" among two or more specified Classes of Certificates and means an allocation on a PRO RATA basis, among the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of various Classes so specified, to each such Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date basis of their then outstanding Certificate Principal Balances prior to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of giving effect to distributions to be made on such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Distribution Date. (c) Any . All Realized Losses and all other losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (d1) In The REMIC I Marker Percentage of all Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect allocated by the Trust Administrator on each Distribution Date to the Class following REMIC I Regular Interests in the specified percentages, as follows: first, to Uncertificated Interest payable to the REMIC I Regular Interest I-ALTAA and REMIC I Regular Interest I-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect LTZZ up to an aggregate amount equal to the Class A Certificates (other than REMIC I Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the Class Uncertificated Balances of the REMIC I Regular Interest I-ALTAA and REMIC I Regular Interest I-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery LTZZ up to an aggregate amount equal to the amount REMIC I Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated Balances of such Realized Loss previously allocated to such Class on REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM11 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance Uncertificated Balances of a Class of Certificates REMIC I Regular Interest I-LTM11 has been reduced to zero; fourth, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount Uncertificated Balances of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group REMIC I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group Regular Interest I-A Certificates or Group IILTAA, REMIC I Regular Interest I-A CertificatesLTM10 and REMIC I Regular Interest I-LTZZ, as applicable98%, 1% and (ii) each Class 1%, respectively, until the Uncertificated Balances of Class B Certificates, pro rata based upon each Class's Group REMIC I Apportioned Regular Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance I-LTM10 has been reduced to zero; fifth, to the interest portion Uncertificated Balances of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group REMIC I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group Regular Interest I-A Certificates LTAA, REMIC I Regular Interest I-LTM9 and Group IIREMIC I Regular Interest I-A CertificatesLTZZ, 98%, 1% and 1%, respectively, based on their Group until the Uncertificated Balance of REMIC I Regular Interest I-A LTM9 has been reduced to zero; sixth, to the Uncertificated Balances of REMIC I Regular Interest Percentages I-LTAA, REMIC I Regular Interest I-LTM8 and Group REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC I Regular Interest I-LTM8 has been reduced to zero; seventh, to the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM7 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC I Regular Interest I-LTM7 has been reduced to zero; eighth to the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM6 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC I Regular Interest I-LTM6 has been reduced to zero; ninth to the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM5 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC I Regular Interest I-LTM5 has been reduced to zero; tenth to the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM4 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC I Regular Interest I-LTM4 has been reduced to zero; eleventh to the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM3 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC I Regular Interest I-LTM3 has been reduced to zero; twelfth to the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM2 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC I Regular Interest I-LTM2 has been reduced to zero; and thirteenth to the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM1 and REMIC I Regular Interest II-A LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC I Regular Interest PercentagesI-LTM1 has been reduced to zero. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect to any Distribution Date, the principal portion of All Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I on the Mortgage Loans and Group II Mortgage Loans will shall be allocated by the Trustee on each Distribution Date as follows: first, to Net Monthly Excess Cashflow, through a distribution of the Class B-6 Certificates until the Class B-6 Extra Principal Balance has been reduced to zeroDistribution Amount for that Distribution Date; second, to the Overcollateralized Amount by a reduction of the Certificate Principal Balance of the Class B-5 Certificates C Certificates, until the Class B-5 Certificate Principal Balance thereof has been reduced to zero; third, to the Class B-4 B Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, fourth, to the Class M-8 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, fifth, to the Class M-7 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, sixth, to the Class M-6 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, seventh, to the Class M-5 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, eighth, to the Class M-4 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, ninth, to the Class M-3 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, tenth, to the Class M-2 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, eleventh, to the Class M-1 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, and twelfth, to the Class A Certificates, on a pro rata basis, in reduction of the Certificate Principal Balance of each such Class, until reduced to zero, provided, however, that (i) any Realized Losses on the Mortgage Loans that would otherwise be allocated to the Class A-1 Certificates will instead be allocated to the Class A-1M Certificates, until its certificate principal balance has been reduced to zero and (ii) any Realized Losses allocable to the Class A-1W Certificates will be covered by the Certificate Guaranty Insurance Policy. All Realized Losses to be allocated to the Certificate Principal Balances of all Classes on any Distribution Date shall be so allocated after the actual distributions to be made on such date as provided above. All references above to the Certificate Principal Balance of any Class of Certificates shall be to the Certificate Principal Balance of such Class immediately prior to the relevant Distribution Date, before reduction thereof by any Realized Losses, in each case to be allocated to such Class of Certificates, on such Distribution Date. Any allocation of Realized Losses to an Offered Certificate on any Distribution Date shall be made by reducing the Certificate Principal Balance thereof by the amount so allocated. Any allocation of Realized Losses to a Class C Certificate shall be made by first, reducing the amount otherwise payable in respect thereof pursuant to Section 4.01(e)(vii), and second, by reducing the Certificate Principal Balance thereof by the amount so allocated. No allocations of any Realized Losses shall be made to the Certificate Principal Balances of the Class P Certificates. (b) All Realized Losses on the Mortgage Loans shall be allocated on each Distribution Date to REMIC 1 Regular Interest A-I until the Class B-4 Uncertificated Principal Balance of such REMIC 1 Regular Interest has been reduced to zero and second, to REMIC 1 Regular Interest I-1-A through REMIC 1 Regular Interest I-59-B, starting with the lowest numerical denomination until such REMIC 1 Regular Interest has been reduced to zero, provided that, for REMIC 1 Regular Interests with the same numerical denomination, such Realized Losses shall be allocated PRO RATA between such REMIC 1 Regular Interests. (c) All Realized Losses on the REMIC 1 Regular Interests shall be allocated to the following REMIC 2 Regular Interests in the specified percentages, as follows: first to Uncertificated Accrued Interest payable to the REMIC 2 Regular Interest AA and REMIC 2 Regular Interest ZZ up to an aggregate amount equal to the REMIC 2 Interest Loss Allocation Amount, 98% and 2% respectively; second, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA and REMIC 2 Regular Interest ZZ up to an aggregate amount equal to the REMIC 2 Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest B and REMIC 2 Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest B has been reduced to zero; fourth, to the Class B-3 Certificates Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-8 and REMIC 2 Regular Interest MT-ZZ, 98%, 1% and 1%, respectively, until the Class B-3 Uncertificated Principal Balance of REMIC 2 Regular Interest M-8 has been reduced to zero; fifth, to the Class B-2 Certificates Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-7 and REMIC 2 Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Class B-2 Uncertificated Principal Balance of REMIC 2 Regular Interest M-7 has been reduced to zero; sixth, to the Class B-1 Certificates Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-6 and REMIC 2 Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Class B-1 Uncertificated Principal Balance of REMIC 2 Regular Interest M-6 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-5 and REMIC 2 Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest M-5 has been reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-4 and REMIC 2 Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest M-4 has been reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-3 and REMIC 2 Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest M-3 has been reduced to zero; tenth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-2 and REMIC 2 Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest M-2 has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrentlyeleventh, to the Group I-A Certificates (other than the Class I-A-PO Certificates) Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-1 and Class I-A-PO CertificatesREMIC 2 Regular Interest ZZ, pro rata98%, based on the Non-PO Fraction 1% and the PO Fraction of such Mortgage Loans1%, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to until the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall be allocated among the Certificates of such Class based on their Percentage Interests. (d) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Uncertificated Principal Balance of a Class of Certificates REMIC 2 Regular Interest M-1 has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (ai) With respect to On any Distribution Date, (x) the related Applicable Fraction of the principal portion of each Realized Losses Loss (other than Debt Service Reductions, any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy LossesLoss) occurring with in respect to of a Mortgage Loan in Collateral Group I Mortgage Loans and Group II Mortgage Loans P will be allocated as followsto and reduce the Class Principal Amount of the Class AP Certificates until their Class Principal Amount has been reduced to zero; and (y) the remaining principal portion of such Realized Loss (other than any Excess Loss) in respect of a Mortgage Loan in any Collateral Group (other than Collateral Group P), shall be allocated in the following order of priority: first, to the Class B-6 Certificates B8 Certificates, in reduction of their Class Principal Amount, until the Class B-6 Principal Balance Amount thereof has been reduced to zero; second, to the Class B-5 Certificates B7 Certificates, in reduction of their Class Principal Amount, until the Class B-5 Principal Balance Amount thereof has been reduced to zero; third, to the Class B-4 Certificates B6 Certificates, in reduction of their Class Principal Amount, until the Class B-4 Principal Balance Amount thereof has been reduced to zero; fourth, to the Class B-3 Certificates B5 Certificates, in reduction of their Class Principal Amount, until the Class B-3 Principal Balance Amount thereof has been reduced to zero; fifth, to the Class B-2 Certificates B4 Certificates, in reduction of their Class Principal Amount, until the Class B-2 Principal Balance Amount thereof has been reduced to zero; sixth, to the Class B-1 Certificates B3 Certificates, in reduction of their Class Principal Amount, until the Class B-1 Principal Balance Amount thereof has been reduced to zero; seventh, to the Class B2 Certificates, in reduction of their Class Principal Amount, until the Class Principal Amount thereof has been reduced to zero; eighth, to the Class B1 Certificates, in reduction of their Class Principal Amount, until the Class Principal Amount thereof has been reduced to zero; and seventhninth, to the related Classes of Non-AP Senior Certificates, the related Applicable Fraction of such Realized Loss pro rata, in accordance with their respective Class Principal Amounts; provided, however, that (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, any Realized Loss that would otherwise be allocated to the Group IClass 2-A A2, Class 2-A3 or Class 2-A4 Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO Certificateswill instead be allocated, pro rata, based on to the NonClass 2-PO Fraction and A5 Certificates until the PO Fraction Class Principal Amount of such Mortgage Loansthe Class 2-A5 Certificates has been reduced to zero, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, any Realized Loss that would otherwise be allocated to the Group IIClass 4-A A6, or Class 4-A9 Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificateswill instead be allocated, pro rata, based on to the NonClass 4-PO Fraction and A10 Certificates until the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction Class Principal Amount of the applicable Class's Class 4-A10 Certificates has been reduced to zero, and (iii) any Realized Loss that would otherwise be allocated to the Class 5-A1 Certificates will instead be allocated to the Class 5-A2 Certificates until the Class Principal BalanceAmount of the Class 5-A2 Certificates has been reduced to zero. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product related Applicable Fraction of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with Loss in respect to any of a Mortgage Loan in any Collateral Group (other than Collateral Group P) shall be allocated, pro rata, to the Subordinate Certificates and related Non-AP Senior Certificate or Certificates on the basis of the Apportioned Principal Balances of the Classes of Subordinate Certificates and Class Principal Amounts of the Non-AP Senior Certificates. The related Applicable Fraction of the principal portion of an Excess Loss (other than a Debt Service Reduction) in respect of a Mortgage Loan in Collateral Group I or Loan Group II, respectively, remaining after allocation P will be applied to the Class I-A-PO or Class II-A-PO AP Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than until the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated Amount thereof has been reduced to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Datezero. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a5.03(a) or Section 4.02(b(b) shall be allocated among the Certificates of such Class based in proportion to their respective Certificate Principal Amounts. Any allocation of Realized Losses pursuant to this paragraph (c) shall be accomplished by reducing the Certificate Principal Amounts of the related Certificates on their Percentage Intereststhe related Distribution Date in accordance with Section 5.03(d). (d) In the event that there is a Recovery of an amount Realized Losses allocated in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated accordance with this Section 5.03 shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When loss was incurred and, in the Principal Balance case of a Class of Certificates has been reduced the principal portion thereof, after giving effect to zerodistributions made on such Distribution Date, such Class shall not be entitled to any share of such Recovery. In the event except that the aggregate amount of such Recovery exceeds the amount of such Recovery Realized Losses to be allocated to each outstanding the Class AP Certificates on such Distribution Date will be taken into account in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received determining distributions in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, any related AP Deferred Amount for such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loandate. (e) The interest portion On each Distribution Date, the Subordinate Certificate Writedown Amount for such date shall effect a corresponding reduction in the Class Principal Amount of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each the lowest ranking Class of Group I-A Certificates or Group II-A outstanding Subordinate Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related which reduction shall occur on such Distribution Date. In addition, Date after the Class B Principal Balance has been reduced giving effect to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based distributions made on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect All Realized Losses on the Mortgage Loans allocated to any Distribution Date, the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will Regular Certificate shall be allocated by the Trustee on each Distribution Date as follows: first, as provided in Section 1.03, to the Class B-6 Certificates until interest accrued on the Class B-6 Principal Balance has been reduced to zeroC Certificates after the allocation thereto of certain interest shortfalls as provided in Section 1.03; second, to the Class B-5 Certificates until Net Swap Payment received under the Class B-5 Principal Balance has been reduced to zeroInterest Rate Swap Agreement after payment of Section 4.01(e)(i) and (ii) and Section 4.01(f)(i) and (ii); third, to the Class B-4 C Certificates (determined for purposes of this section 4.08 as the amount by which (A) the aggregate Uncertificated Principal Balance of the REMIC 2 Regular Interests immediately preceding such Distribution Date exceed (B) the aggregate Certificate Principal Balances of the Class A Certificates, the Mezzanine Certificates and the Class P Certificates immediately preceding such Distribution Date), until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-3 Certificates M-11 Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 Certificates M-10 Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates M-9 Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class M-8 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class M-7 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class M-6 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eleventh, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; twelfth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; thirteenth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrentlyfourteenth, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO M-1 Certificates, pro rata, based until the Certificate Principal Balance thereof has been reduced to zero. All Realized Losses to be allocated to the Certificate Principal Balances of all Classes on any Distribution Date shall be so allocated after the Non-PO Fraction and actual distributions to be made on such date as provided above. All references above to the PO Fraction Certificate Principal Balance of any Class of Certificates shall be to the Certificate Principal Balance of such Mortgage LoansClass immediately prior to the relevant Distribution Date, respectivelybefore reduction thereof by any Realized Losses, and (ii) with respect in each case to be allocated to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO of Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectivelyDistribution Date. This Any allocation of Realized Losses will to a Mezzanine Certificate on any Distribution Date shall be effected through made by reducing the reduction Certificate Principal Balance thereof by the amount so allocated; any allocation of Realized Losses to a Class C Certificate shall be made by reducing the amount otherwise payable in respect thereof pursuant to Section 4.01(d)(v). No allocations of any Realized Losses shall be made to the Certificate Principal Balances of the applicable Class's Principal BalanceClass A Certificates or the Class P Certificates. (b) With respect to any Distribution Date, All Realized Losses on the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence Loans shall be allocated pro rata among by the Group I-A Certificates (other than Trustee on each Distribution Date first to the Class I-A-PO Certificates) or Group II-A Certificates (other than REMIC 1 Regular Interest LT1 and then to the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on REMIC 1 Regular Interest LT1PF until the Group I-A Non-PO Uncertificated Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated REMIC 1 Regular Interest has been reduced to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall be allocated among the Certificates of such Class based on their Percentage Interests. (d) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan andzero; provided however, with respect to the Class A Certificates (other than first three Distribution Dates, all Realized Losses on the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Initial Group I Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously Loans shall be allocated to such Class on REMIC 1 Regular Interest LT1 until the Distribution Date in the month following the month in which such recovery is received. When the Uncertificated Principal Balance of a Class of Certificates each such REMIC 1 Regular Interest has been reduced to zero, such Class and all Realized Losses on the Subsequent Group I Mortgage Loans shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with REMIC 1 Regular Interest LT1PF until the preceding provisions, each outstanding Class Uncertificated Principal Balance thereof has been reduced to zero. All Realized Losses on the Group II Mortgage Loans shall be entitled allocated by the Trustee on each Distribution Date first to its pro rata share the REMIC 1 Regular Interest LT2 and then to the REMIC 1 Regular Interest LT2PF until the Uncertificated Principal Balance of each such REMIC 1 Regular Interest has been reduced to zero; provided however, with respect to the first three Distribution Dates, all Realized Losses on the Initial Group II Mortgage Loans shall be allocated to REMIC 1 Regular Interest LT2 until the Uncertificated Principal Balance of each such REMIC 1 Regular Interest has been reduced to zero, and all Realized Losses on the Subsequent Group II Mortgage Loans shall be allocated to REMIC 1 Regular Interest LT2PF until the Uncertificated Principal Balance thereof has been reduced to zero. (determined as described abovec) of such excess up With respect to the REMIC 2 Regular Interests, all Realized Losses on the Mortgage Loans shall be allocated shall be allocated on each Distribution Date, first to REMIC 2 Regular Interest I-1-C in an amount equal to the amount of any unrecovered Realized Loss previously Losses allocated to the Class C Certificates for such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following until the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Uncertificated Principal Balance has been reduced to zero, the interest portion of and second, to REMIC 2 Regular Interest I-1-A and REMIC 2 Regular Interest I-1-B pro rata between such REMIC 2 Regular Interests. (d) All Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I on the Mortgage Loan or Group II Mortgage Loan will Loans shall be allocated among by the outstanding Classes Trustee on each Distribution Date to the following REMIC 3 Regular Interests in the specified percentages, as follows: first, to Uncertificated Accrued Interest payable to the REMIC 3 Regular Interest LTAA and REMIC 3 Regular Interest LTZZ up to an aggregate amount equal to the REMIC 3 Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated Principal Balances of Group I-A Certificates the REMIC 3 Regular Interest LTAA and Group II-A CertificatesREMIC 3 Regular Interest LTZZ up to an aggregate amount equal to the REMIC 3 Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM11 and REMIC 3 Regular Interest LTZZ, 98%, 1.00% and 1.00%, respectively, based on their Group I-A until the Uncertificated Principal Balance of REMIC 3 Regular Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect LTM11 has been reduced to zero; fourth, to the preceding Distribution DateUncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM10 and REMIC 3 Regular Interest LTZZ, 98%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM10 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM9 and REMIC 3 Regular Interest LTZZ, 98%, 1.00%, and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM9 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM8 and REMIC 3 Regular Interest LTZZ, 98%, 1.00%, and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM8 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM7 and REMIC 3 Regular Interest LTZZ, 98%, 1.00%, and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM7 has been reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM6 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM6 has been reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM5 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM5 has been reduced to zero; tenth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM4 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM4 has been reduced to zero; eleventh, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM3 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM3 has been reduced to zero; twelfth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM2 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM2 has been reduced to zero and twelfth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest LTAA, REMIC 3 Regular Interest LTM1 and REMIC 3 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest LTM1 has been reduced to zero.

Allocation of Realized Losses. (a) With respect to any Distribution Date, the principal portion of All Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I on the Mortgage Loans and Group II Mortgage Loans will shall be allocated by the Trustee on each Distribution Date as follows: first, to Net Monthly Excess Cashflow, through a distribution of the Class B-6 Certificates until the Class B-6 Extra Principal Balance has been reduced to zeroDistribution Amount for that Distribution Date; second, to the Overcollateralized Amount by a reduction of the Certificate Principal Balance of the Class B-5 Certificates C Certificates, until the Class B-5 Certificate Principal Balance thereof has been reduced to zero; third, to the Class B-4 B Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, fourth, to the Class M-8 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, fifth, to the Class M-7 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, sixth, to the Class M-6 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, seventh, to the Class M-5 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, eighth, to the Class M-4 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, ninth, to the Class M-3 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, tenth, to the Class M-2 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, eleventh, to the Class M-1 Certificates, in reduction of the Certificate Principal Balance thereof, until reduced to zero, and twelfth, to the Class A Certificates, on a pro rata basis, in reduction of the Certificate Principal Balance of each such Class, until reduced to zero, provided, however, that (i) any Realized Losses on the Mortgage Loans that would otherwise be allocated to the Class A-1 Certificates will instead be allocated to the Class A-1M Certificates, until its certificate principal balance has been reduced to zero and (ii) any Realized Losses allocable to the Class A-1W Certificates will be covered by the Certificate Guaranty Insurance Policy. All Realized Losses to be allocated to the Certificate Principal Balances of all Classes on any Distribution Date shall be so allocated after the actual distributions to be made on such date as provided above. All references above to the Certificate Principal Balance of any Class of Certificates shall be to the Certificate Principal Balance of such Class immediately prior to the relevant Distribution Date, before reduction thereof by any Realized Losses, in each case to be allocated to such Class of Certificates, on such Distribution Date. Any allocation of Realized Losses to an Offered Certificate on any Distribution Date shall be made by reducing the Certificate Principal Balance thereof by the amount so allocated. Any allocation of Realized Losses to a Class C Certificate shall be made by first, reducing the amount otherwise payable in respect thereof pursuant to Section 4.01(e)(vii), and second, by reducing the Certificate Principal Balance thereof by the amount so allocated. No allocations of any Realized Losses shall be made to the Certificate Principal Balances of the Class P Certificates. (b) All Realized Losses on the Mortgage Loans shall be allocated on each Distribution Date to REMIC 1 Regular Interest A-I until the Class B-4 Uncertificated Principal Balance of such REMIC 1 Regular Interest has been reduced to zero and second, to REMIC 1 Regular Interest I-1-A through REMIC 1 Regular Interest I-59-B, starting with the lowest numerical denomination until such REMIC 1 Regular Interest has been reduced to zero, provided that, for REMIC 1 Regular Interests with the same numerical denomination, such Realized Losses shall be allocated pro rata between such REMIC 1 Regular Interests. (c) All Realized Losses on the REMIC 1 Regular Interests shall be allocated to the following REMIC 2 Regular Interests in the specified percentages, as follows: first to Uncertificated Accrued Interest payable to the REMIC 2 Regular Interest AA and REMIC 2 Regular Interest ZZ up to an aggregate amount equal to the REMIC 2 Interest Loss Allocation Amount, 98% and 2% respectively; second, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA and REMIC 2 Regular Interest ZZ up to an aggregate amount equal to the REMIC 2 Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest B and REMIC 2 Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest B has been reduced to zero; fourth, to the Class B-3 Certificates Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-8 and REMIC 2 Regular Interest MT-ZZ, 98%, 1% and 1%, respectively, until the Class B-3 Uncertificated Principal Balance of REMIC 2 Regular Interest M-8 has been reduced to zero; fifth, to the Class B-2 Certificates Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-7 and REMIC 2 Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Class B-2 Uncertificated Principal Balance of REMIC 2 Regular Interest M-7 has been reduced to zero; sixth, to the Class B-1 Certificates Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-6 and REMIC 2 Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Class B-1 Uncertificated Principal Balance of REMIC 2 Regular Interest M-6 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-5 and REMIC 2 Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest M-5 has been reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-4 and REMIC 2 Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest M-4 has been reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-3 and REMIC 2 Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest M-3 has been reduced to zero; tenth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-2 and REMIC 2 Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest M-2 has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrentlyeleventh, to the Group I-A Certificates (other than the Class I-A-PO Certificates) Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-1 and Class I-A-PO CertificatesREMIC 2 Regular Interest ZZ, pro rata98%, based on the Non-PO Fraction 1% and the PO Fraction of such Mortgage Loans1%, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to until the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall be allocated among the Certificates of such Class based on their Percentage Interests. (d) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Uncertificated Principal Balance of a Class of Certificates REMIC 2 Regular Interest M-1 has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect Prior to each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modification, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due during the related Due Period. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. All Realized Losses, other than Excess Special Hazard Losses, Extraordinary Losses, Excess Bankruptcy Losses or Excess Fraud Losses, shall be allocated as follows: first, to the Class B-3 Certificates until the Certificate Principal Balance thereof has been reduced to zero; second, to the Class B-2 Certificates until the Certificate Principal Balance thereof has been reduced to zero; third, to the Class B-1 Certificates until the Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class M-9 Certificates until the Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class M-8 Certificates until the Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class M-7 Certificates until the Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class M-6 Certificates until the Certificate Principal Balance thereof has been reduced to zero; eight, to the Class M-5 Certificates until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class M-4 Certificates until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class M-3 Certificates until the Certificate Principal Balance thereof has been reduced to zero; eleventh, to the Class M-2 Certificates until the Certificate Principal Balance thereof has been reduced to zero; twelfth, to the Class M-1 Certificates until the Certificate Principal Balance thereof has been reduced to zero; and, thereafter, such Realized Losses shall be allocated to all the remaining Senior Certificates, on a pro rata basis; provided, however, that after the Credit Support Depletion Date, Realized Losses otherwise allocable to the Class A-1, Class A-2 and Class A-3 Certificates will be allocated to the Class A-4 Certificates until the Certificate Principal Balance of the Class A-4 Certificates has been reduced to zero, and, thereafter, Realized Losses otherwise allocable to the Class A-1 Certificates and Class A-2 Certificates will be allocated to the Class A-3 Certificates until the Certificate Principal Balance of the Class A-3 Certificates has been reduced to zero. The Senior Percentage of any Excess Special Hazard Losses, Excess Bankruptcy Losses, Excess Fraud Losses or Extraordinary Losses on the Mortgage Loans shall be allocated to the Senior Certificates on a pro rata basis. The remainder of such Realized Losses will be allocated among the Class M Certificates and Class B Certificates, on a pro rata basis. On any Distribution Date, Realized Losses will be allocated as set forth herein before distributions of principal on the Certificates as set forth herein. As used herein, an allocation of a Realized Loss on a "pro rata basis" among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Accrued Certificate Interest thereon payable on such Distribution Date (without regard to any Compensating Interest for such Distribution Date) in the case of an interest portion of a Realized Loss. Except as provided in the following sentence, any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will a Class of Certificates shall be allocated as follows: first, to made by reducing the Class B-6 Certificates until the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; second, to provided that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This Any allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable (other than Debt Service Reductions) to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal Subordinate Certificates then outstanding with the product Lowest Priority shall be made by operation of the definition of "Certificate Principal Balance" and by operation of the provisions of Section 4.02(a). Allocations of the interest portions of Realized Losses (other than any interest rate reduction resulting from a Servicing Modification) shall be made in proportion to the amount of any such principal loss Accrued Certificate Interest and by operation of the PO Fraction for such Mortgage Loandefinition of "Accrued Certificate Interest" and by operation of the provisions of Section 4.02(a). The Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the provisions of Section 4.02(a). Allocations of the principal portion of any Excess Special Hazard Losses, Excess Fraud Debt Service Reductions shall be made by operation of the provisions of Section 4.02(a). All Realized Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their Percentage Interests. (d) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect proportion to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Percentage Interests evidenced thereby. Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, the Uncertificated REMIC I Regular Interests as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date specified in the second month following the month in which such loss was incurred with respect to the preceding Distribution Datedefinition of REMIC I Realized Losses.

Allocation of Realized Losses. (a) With respect All Realized Losses on the Mortgage Loans allocated to any Distribution Date, the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy LossesREMIC II Regular Interest pursuant to Section 6.05(c) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will shall be allocated by the Trustee on each Distribution Date as follows: first, to Excess Spread through an increased distribution of the Class B-6 Certificates until the Class B-6 Extra Principal Balance has been reduced to zeroDistribution Amount for such Distribution Date; second, to the Class B-5 Certificates CE Interest and Class CE Certificates, until the Class B-5 Certificate Principal Balance or Uncertificated Principal Balance thereof, as applicable, has been reduced to zero; third, to the Class B-4 Certificates M-9 Certificates, until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-3 Certificates M-8 Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 Certificates M-7 Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates M-6 Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO M-5 Certificates, pro rata, based on until the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect Certificate Principal Balance thereof has been reduced to such losses occurring with respect to Group II Mortgage Loans, concurrentlyzero; eighth, to the Group II-A Certificates (other than Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class II-A-PO Certificates) and Class II-A-PO M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eleventh, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; twelfth, to the related Class or Classes of Class A Certificates, on a pro ratarata basis, based on until the Non-PO Fraction and the PO Fraction of such Mortgage LoansCertificate Principal Balances thereof have been reduced to zero, respectively. This allocation of provided, however, any Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan otherwise allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, A-1 Certificates will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation first be allocated to the Class I-AA-2 Certificates, until the Certificate Principal Balance of that Class has been reduced to zero, and then to the Class I-PO A-1 Certificates; and thirteenth, to the unrelated Class or Classes of Class IIA Certificates, on a pro rata basis, until the Certificate Principal Balances thereof have been reduced to zero, provided, however, any Realized Losses otherwise allocable to the Class I-AA-1 Certificates will first be allocated to the Class I-PO A-2 Certificates, until the Certificate Principal Balance of that Class has been reduced to zero, and then to the Class I-A-1 Certificates. All Realized Losses to be allocated to the Certificate Principal Balances of all Classes on any Distribution Date shall be so allocated after the actual distributions to be made on such date as provided above. All references above to the Certificate Principal Balance of any Class of Certificates shall be to the Certificate Principal Balance of such Class immediately prior to the relevant Distribution Date, before reduction thereof by any Realized Losses, in each case to be allocated to such Class of Certificates, on such Distribution Date. (b) Any allocation of Realized Losses to a Class of Certificates or to a Class CE Interest on any Distribution Date shall be made by reducing the Certificate Principal Balance or Uncertificated Principal Balance thereof by the amount so allocated; any allocation of Realized Losses to Excess Spread shall be made by reducing the amount otherwise payable in respect of the Class CE Interest and the Class CE Certificates pursuant to clause (G) of Section 6.04(a)(4). No allocations of any Realized Losses shall be made to the Certificate Principal Balance or Uncertificated Principal Balance, as applicable, in accordance with of the preceding sentence Class P Interest and the Class P Certificates. Notwithstanding the foregoing, no such allocation of any Realized Loss shall be allocated pro rata among made on a Distribution Date to any Class of Certificates to the Group I-A extent that such allocation would result in the reduction of the aggregate Certificate Principal Balance of all the Certificates as of such Distribution Date, (other than the Class I-A-PO CE Certificates and Class P Certificates) or Group II-A Certificates (other after giving effect to all distributions and prior allocations of Realized Losses on the Mortgage Loans on such date, to an amount less than the Class II-A-PO Certificatesaggregate Stated Principal Balance of all of the Mortgage Loans as of the first day of the month of such Distribution Date (such limitation, the “Loss Allocation Limitation”). In addition in no event will the Certificate Principal Balance of any Certificate be reduced more than once in respect of any particular amount both (i) allocable to such Certificate in respect of Realized Losses and (ii) payable as principal to the Holder of such Certificate from Remaining Excess Spread. As used herein, respectivelyan allocation of a Realized Loss on a “pro rata basis” among two or more specified Classes of Certificates means an allocation on a pro rata basis, and among the various Classes so specified, to each such Class of Class B Certificates based on the Group I-A Non-PO basis of their then outstanding Certificate Principal Balance or Group II-A Non-PO Principal Balance in the case of Balances prior to giving effect to distributions to be made on such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectivelyDistribution Date. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any All Realized Losses and all other losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (di) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated I Loans shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based allocated on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the each Distribution Date in to REMIC I Regular Interest I-1-A through REMIC I Regular Interest I-60-B, starting with the month following lowest numerical denomination, until the month in which such recovery is received. When the Uncertificated Principal Balance of a Class of Certificates each such REMIC I Regular Interest has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance provided that, for REMIC I Group I Regular Interests with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loansame numerical denomination, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) on a pro rata basis between such REMIC I Regular Interests. All Realized Losses on the Group II Loans shall be allocated on each Class of Group IDistribution Date to REMIC I Regular Interest II-1-A Certificates or Group IIthrough REMIC I Regular Interest II-60-A CertificatesB, as applicablestarting with the lowest numerical denomination, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for until the related Distribution Date. In addition, after the Class B Uncertificated Principal Balance of each such REMIC I Regular Interest has been reduced to zero, provided that, for REMIC I Group II Regular Interests with the interest portion same numerical denomination, such Realized Losses shall be allocated on a pro rata basis between such REMIC I Regular Interests. (i) The REMIC II Marker Percentage of all Realized Losses on the Mortgage Loans shall be allocated by the Trustee on each Distribution Date to the following REMIC II Regular Interests in the following specified percentages: first, to Uncertificated Accrued Interest payable to the REMIC II Regular Interest AA and REMIC II Regular Interest ZZ up to an aggregate amount equal to the REMIC II Interest Loss Allocation Amount (without duplication of shortfalls allocated pursuant to Section 1.02), 98.00% and 2.00%, respectively; second, to the Uncertificated Principal Balances of the REMIC II Regular Interest AA and REMIC II Regular Interest ZZ up to an aggregate amount equal to the REMIC II Principal Loss Allocation Amount, 98.00% and 2.00%, respectively; third, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-9 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-9 has been reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-8 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-8 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-7 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-7 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-6 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-6 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-5 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-5 has been reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-4 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-4 has been reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-3 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-3 has been reduced to zero; tenth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-2 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-2 has been reduced to zero; eleventh, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-1 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-1 has been reduced to zero; twelfth, to the Uncertificated Principal Balance of REMIC II Regular Interest AA, 98.00%, to the Uncertificated Principal Balances of the related REMIC II Regular Interests I-A-1, I-A-2 and II-A, 1.00% on a pro rata basis, and to the Uncertificated Principal Balance of REMIC II Regular Interest ZZ, 1.00%, until the Uncertificated Principal Balances of such REMIC II Regular Interests I-A-1, I-A-2 and II-A have been reduced to zero, provided, however, any Realized Losses otherwise allocable to REMIC II Regular Interest I-A-1 will first be allocated to REMIC II Regular Interest Class I-A-2, until the Uncertificated Principal Balance of such REMIC II Regular Interest has been reduced to zero, and then to REMIC II Regular Interest I-A-1; and thirteenth, to the Uncertificated Principal Balance of REMIC II Regular Interest AA, 98.00%, to the Uncertificated Principal Balances of the unrelated REMIC II Regular Interests I-A-1, I-A-2 and II-A, 1.00% on a pro rata basis, and to the Uncertificated Principal Balance of REMIC II Regular Interest ZZ, 1.00%, until the Uncertificated Principal Balances of such REMIC II Regular Interests I-A-1, I-A-2 and II-A have been reduced to zero, provided, however, any Realized Losses otherwise allocable to REMIC II Regular Interest I-A-1 will first be allocated to REMIC II Regular Interest Class I-A-2, until the Uncertificated Principal Balance of such REMIC II Regular Interest has been reduced to zero, and then to REMIC II Regular Interest I-A-1. (ii) The REMIC II Sub WAC Allocation Percentage of all Realized Losses on the Mortgage Loans shall be allocated by the Trustee on each Distribution Date after all distributions have been made on each Distribution Date first, so as to keep the Uncertificated Principal Balance of each REMIC II Regular Interest ending with the designation “Grp” equal to 0.01% of the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group; second, to each REMIC II Regular Interest ending with the designation “Sub”, so that the Uncertificated Principal Balance of each such REMIC II Regular Interest is equal to 0.01% of the excess of (x) the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group over (y) the current aggregate Certificate Principal Balance of the Class A Certificates related to such Loan Group (except that if any such excess is a larger number than in the preceding distribution period, the least amount of Realized Losses (other than Excess Special Hazard Lossesshall be applied to such REMIC II Regular Interests such that the REMIC II Subordinated Balance Ratio is maintained); and third, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group REMIC II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Regular Interest Percentages and Group II-A Interest PercentagesXX. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. (b) [All Realized Losses on the Mortgage Loans shall be allocated as follows: (i) first, to Excess Cash Flow in the amounts and priority as provided in Section 4.02; (ii) second, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; (iii) third, to the Class B-2 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (iv) fourth, to the Class B-1 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (v) fifth, to the Class M-9 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vi) sixth, to the Class M-8 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vii) seventh, to the Class M-7 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (viii) eighth, to the Class M-6 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (ix) ninth, to the Class M-5 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (x) tenth, to the Class M-4 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xi) eleventh, to the Class M-3 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xii) twelfth, to the Class M-2 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xiii) thirteenth, to the Class M-1 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; and (xiv) fourteenth, to the Class A-1, Class A-2 and Class A-3 Certificates on a pro rata basis, until the aggregate Certificate Principal Balance of each such Class has been reduced to zero.] (c) An allocation of a Realized Loss on a "pro rata basis" among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Accrued Certificate Interest thereon payable on such Distribution Date in the case of an interest portion of a Realized Loss. Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the [Class B-6 A Certificates, Class M Certificates until or Class B Certificates] shall be made by reducing the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will shall be effected through the reduction made by operation of the applicable Class's Principal Balance. (b) With respect to any definition of "Accrued Certificate Interest" for each Class for such Distribution Date, . Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the priority of payment provisions of Section 4.02(c). Allocations of the principal portion of Excess Special Hazard Losses, Excess Fraud Debt Service Reductions shall be made by operation of the priority of payment provisions of Section 4.02(c). All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (d) In [All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect allocated on each Distribution Date to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date REMIC I Regular Interests as provided in the month following the month in which such recovery is received. When the Principal Balance definition of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered REMIC I Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated LoanLosses.] (e) The interest portion [Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of Excess Special Hazard Lossesthis Section, Excess Fraud Losses the definition of Accrued Certificate Interest and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan the operation of Section 4.02(c) shall be deemed allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after to the Class B Principal Balance has SB Certificates. Realized Losses allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to the REMIC II Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued Certificate Interest on the REMIC I Regular Interest SB-IO. Realized Losses allocated to the Overcollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce the principal balance of the REMIC II Regular Interest SB-PO until such principal balance shall have been reduced to zero, the zero and thereafter to reduce accrued and unpaid interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution DateREMIC II Regular Interest SB-IO.]

Allocation of Realized Losses. (a) With respect On or prior to any Distribution each Determination Date, the principal Master Servicer shall determine the amount of any Realized Loss in respect of each Loan Group in respect of each related Mortgage Loan that occurred during the immediately preceding calendar month. (b) The interest portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to each Loan Group shall be allocated to the related Certificates as described in Section 1.02 hereof. (c) The principal portion of all Realized Losses on Loan Group I Mortgage Loans and Group II Mortgage Loans will shall be allocated on each Distribution Date as follows: first, to Net Monthly Excess Cashflow as part of the Class B-6 Certificates until payment of the Class B-6 Principal Balance has been reduced to zeroGroup I Overcollateralization Increase Amount; second, to in reduction of the Class B-5 Certificates Group I Overcollateralized Amount, until the Class B-5 Principal Balance has been reduced to zero; third, to the Class I-B-4 Certificates Certificates, until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class I-B-3 Certificates Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class I-B-2 Certificates Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class I-B-1 Certificates Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class I-M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class I-M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrentlyninth, to the Group Class I-A M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero. (d) The PO Percentage of the principal portion of all Realized Losses on Discount Mortgage Loans and Class II-PO Certificate Cash Shortfall in Loan Group II shall be allocated to the Class II-PO Certificates until the Certificate Principal Balance of the Class II-PO Certificates is reduced to zero. With respect to any Distribution Date through the related Cross-Over Date, the aggregate of all amounts so allocable to the Class II-PO Certificates on such date in respect of any Realized Losses and any Class II-PO Certificate Cash Shortfalls and all amounts previously allocated in respect of such Realized Losses or Class II-PO Certificate Cash Shortfalls and not distributed on prior Distribution Dates shall be the “Class II-PO Certificate Deferred Amount.” To the extent funds are available therefor on any Distribution Date through the related Cross-Over Date, distributions in respect of the Class II-PO Certificate Deferred Amount for the Class II-PO Certificates shall be made in accordance with priority sixth of clause (b) of Section 6.07. No interest shall accrue on the Class II-PO Certificate Deferred Amount. On each Distribution Date through the related Cross-Over Date, the Certificate Principal Balance of the lowest ranking class of Group II Subordinate Certificates then outstanding shall be reduced by the amount of any distributions in respect of any Class II-PO Certificate Deferred Amount on such Distribution Date in accordance with the priorities set forth above, through the operation of the Subordinate Certificate Writedown Amount. After the related Cross-Over Date, no more distributions shall be made in respect of, and applicable Realized Losses and Class II-PO Certificate Cash Shortfalls allocable to the Class II-PO Certificates will not be added to, the Class II-PO Certificate Deferred Amount. (e) The Non-PO Percentage of the principal portion of Realized Losses on the Mortgage Loans in Loan Group II shall be allocated on any Distribution Date as follows: first, to the Class II-B-6 Certificates; second, to the Class II-B-5 Certificates; third, to the Class II-B-4 Certificates; fourth, to the Class II-B-3 Certificates; fifth, to the Class II-B-2 Certificates; and sixth, to the Class II-B-1 Certificates, in each case until the Certificate Principal Balance of such Class has been reduced to zero. Thereafter, the principal portion of Realized Losses on the Mortgage Loans in Loan Group II shall be allocated on any Distribution Date to the outstanding Class or Classes of Group II Senior Certificates (other than the Interest Only Certificates and the Class III-A-PO R Certificates) and Class I-A-PO Certificates), pro rata, based on upon their respective Certificate Principal Balances. (f) No reduction of the Non-PO Fraction Certificate Principal Balance of any Class of a Group II Senior Certificate (other than related the Interest Only Certificates and the PO Fraction Class II-R Certificates) shall be made on any Distribution Date on account of Realized Losses to the extent that such reduction would have the effect of reducing the aggregate Certificate Principal Balance of all of the Classes of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Senior Certificates (other than the related Interest Only Certificates and the Class II-A-PO R Certificates) and as of such Distribution Date to an amount less than the Stated Principal Balances of the Mortgage Loans in Loan Group II as of the related Due Date. (g) All Realized Losses to be allocated to the Certificate Principal Balances of all related Classes on any Distribution Date shall be so allocated after the actual distributions to be made on such date as provided above. All references above to the Certificate Principal Balance of any Class II-A-PO of Certificates shall be to the Certificate Principal Balance of such Class immediately prior to the relevant Distribution Date, before reduction thereof by any Realized Losses, in each case to be allocated to such Class of Certificates, pro rata, based on such Distribution Date. (h) Any allocation of the Non-PO Fraction and principal portion of Realized Losses with respect to each Loan Group to a related Subordinate Certificate on any Distribution Date shall be made by reducing the PO Fraction of such Mortgage Loans, respectively. This Certificate Principal Balance thereof by the amount so allocated; any allocation of Realized Losses will to a Class I-C Certificate shall be effected through made by reducing the reduction amount otherwise payable in respect thereof pursuant to priority third of Section 6.07(a). No allocations of any Realized Losses shall be made to the Certificate Principal Balances of the applicable Class's Principal BalanceGroup I Senior Certificates or Class I-P Certificates. (bi) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) hereunder shall be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (dj) In addition, in the event that there is a Recovery of an amount the Master Servicer receives any Subsequent Recoveries in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as from the Company or the related Servicer, the Master Servicer shall deposit such funds for such Loan Group into the Master Servicer Collection Account pursuant to Section 5.06. If, after taking into account such Subsequent Recoveries, the amount of a Realized Loss is reduced, the amount of such Subsequent Recoveries shall be applied to any Classes increase the Certificate Principal Balance of the related Class A of Subordinate Certificates or any Classes with the highest payment priority to which Realized Losses with respect to such Loan Group have been allocated, but not by more than the amount of Realized Losses previously allocated to that Class B of Subordinate Certificates pursuant to this Section 6.05 and, in the case of the Group I Subordinate Certificates, each outstanding not previously reimbursed to such Class of Subordinate Certificates with Net Monthly Excess Cashflow pursuant to which priority third of Section 6.07(a); provided, however, in the case of the Group I Subordinate Certificates, to the extent that no reductions to a Certificate Principal Balance of such Class of Subordinate Certificates currently exists as the result of a prior allocation of a Realized Loss had previously been allocated with respect to Loan Group I, such Subsequent Recoveries with respect to such Loan Group shall be applied as Excess Spread to such Loan Group. Holders of Certificates will not be entitled to any payment in respect of current interest on the amount of increases described herein for any Interest Accrual Period preceding the Distribution Date on which such increase occurs. Any such increases shall be applied to the Certificate Principal Balance of each related Subordinate Certificate of such Class in accordance with its share respective Percentage Interest. (with respect k) (i) The interest portion of Realized Losses on the Mortgage Loans in Loan Group I shall be allocated on each Distribution Date first, to Uncertificated Accrued Interest payable to REMIC I Regular Interest AA and REMIC I Regular Interest ZZ up to an aggregate amount equal to the REMIC I Interest Loss Allocation Amount (without duplication of any such amount attributable to allocations of Net Interest Shortfalls on such Distribution Date pursuant to Section 1.02), 98% and 2%, respectively, and thereafter, to Uncertificated Accrued Interest payable to the REMIC I Regular Interests (other than REMIC I Regular Interest I-P), pro rata, based on the Uncertificated Accrued Interest for each such REMIC I Regular Interest prior to such allocation. The principal portion of Realized Losses on the Mortgage Loans in Loan Group I shall be allocated on each Distribution Date to the following REMIC I Regular Interests in the specified percentages, as follows: first, to the Uncertificated Principal Balances of REMIC I Regular Interest AA and REMIC I Regular Interest ZZ up to an aggregate amount equal to the REMIC I Principal Loss Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest I-B-4 and REMIC I Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest I-B-4 has been reduced to zero; third, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest I-B-3 and REMIC I Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest I-B-3 has been reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest I-B-2 and REMIC I Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest I-B-2 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest I-B-1 and REMIC I Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest I-B-1 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest I-M-3 and REMIC I Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest I-M-3 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest I-M-2 and REMIC I Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest I-M-2 has been reduced to zero; and eighth, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest I-M-1 and REMIC I Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest I-M-1 has been reduced to zero. All Realized Losses on the Mortgage Loans in Loan Group I shall be allocated on each Distribution Date to the REMIC II Regular Interests in the same manner as Realized Losses are allocated to the Corresponding Certificates pursuant to Sections 1.02, 6.05(b) and 6.05(c); provided that, solely for purposes of allocating the interest portion of such Realized Losses to the REMIC II Regular Interests, any such portion otherwise allocable to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect A-5 Certificates under Section 1.02 shall be deemed to the Class A Certificates (other than be allocated entirely to the Class I-A-PO A-1 Certificates and Class III-A-PO Certificates) and Class B Certificates, based A-2 Certificates on their a pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loanbasis. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers’ Certificate. (b) [All Realized Losses on the Mortgage Loans shall be allocated as follows: (i) first, to Excess Cash Flow in the amounts and priority as provided in Section 4.02; (ii) second, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; (iii) third, the Class B Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (iv) fourth, to the Class M-9 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (v) fifth, to the Class M-8 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (vi) sixth, to the Class M-7 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (vii) seventh, to the Class M-6 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (viii) eighth, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (ix) ninth, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (x) tenth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (xi) eleventh, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; (xii) twelfth, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and (xiii) thirteenth, to the Class A Certificates on a pro rata basis, based on their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date, until the aggregate Certificate Principal Balance thereof has been reduced to zero.] (c) An allocation of a Realized Loss on a “pro rata basis” among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Accrued Certificate Interest thereon payable on such Distribution Date in the case of an interest portion of a Realized Loss. Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates, Class M Certificates until or Class B Certificates shall be made by reducing the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will shall be effected through the reduction made by operation of the applicable Class's Principal Balance. (b) With respect to any definition of “Accrued Certificate Interest” for each Class for such Distribution Date, . Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the priority of payment provisions of Section 4.02(c). Allocations of the principal portion of Excess Special Hazard Losses, Excess Fraud Debt Service Reductions shall be made by operation of the priority of payment provisions of Section 4.02(c). All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (d) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect allocated on each Distribution Date to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date REMIC I Regular Interests as provided in the month following the month in which such recovery is received. When the Principal Balance definition of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered REMIC I Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated LoanLosses. (e) The interest portion Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of Excess Special Hazard Lossesthis Section, Excess Fraud Losses the definition of Accrued Certificate Interest and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan the operation of Section 4.02(c) shall be deemed allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after to the Class B Principal Balance has SB Certificates. Realized Losses allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to the REMIC II Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued Certificate Interest on the REMIC II Regular Interest SB-IO. Realized Losses allocated to the Overcollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce the principal balance of the REMIC II Regular Interest SB-PO until such principal balance shall have been reduced to zero, the zero and thereafter to reduce accrued and unpaid interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution DateREMIC II Regular Interest SB-IO.

Allocation of Realized Losses. Prior to each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modification, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due during the related Due Period. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. All Realized Losses on Mortgage Loans in a Loan Group, other than Excess Special Hazard Losses, Extraordinary Losses, Excess Bankruptcy Losses or Excess Fraud Losses, shall be allocated to the Certificates in the related Certificate Group as follows: first, to the Class I-B-3 Certificates or the Class II-B-3 Certificates, as applicable, until the Certificate Principal Balance thereof has been reduced to zero; second, to the Class I-B-2 Certificates or the Class II-B-2 Certificates, as applicable, until the Certificate Principal Balance thereof has been reduced to zero; third, to the Class I-B-1 Certificates or the Class II-B-1 Certificates, as applicable, until the Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class I-M-3 Certificates or the Class II-M-3 Certificates, as applicable, until the Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class I-M-2 Certificates or the Class II-M-2 Certificates, as applicable, until the Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class I-M-1 Certificates or the Class II-M-1 Certificates, as applicable, until the Certificate Principal Balance thereof has been reduced to zero; and, thereafter, if any such Realized Loss is on a Discount Mortgage Loan, to the related Class A-P Certificates in an amount equal to the related Discount Fraction of the principal portion of the Realized Loss until the Certificate Principal Balance of such Class A-P Certificates has been reduced to zero, and the remainder of such Realized Losses on the Discount Mortgage Loans in the related Loan Group and the entire amount of such Realized Losses on Non-Discount Mortgage Loans in the related Loan Group will be allocated among (i) the Group I Senior (other than the Class I-A-P Certificates) and, in the case of the interest portion of such Realized Loss, the Class I-A-V Certificates (in the case of a Group I Loan) on a pro rata basis, (ii) Group II Senior Certificates (other than the Class II-A-P Certificates) and, in the case of the interest portion of such Realized Loss, Class II-A-V Certificates (in the case of a Group II Loan) on a pro rata basis; provided, however, that (a) With such Realized Losses otherwise allocable to the Class I-A-13 Certificates will be allocated to the Class I-A-14 Certificates, until the Certificate Principal Balance of the Class I-A-14 Certificates has been reduced to zero, and (b) up to $4,000,000 of such Realized Losses otherwise allocable to the Class I-A-1 Certificates, up to $844,000 of such Realized Losses otherwise allocable to the Class I-A-6 Certificates, up to $1,725,000 of such Realized Losses otherwise allocable to the Class I-A-7 Certificates, up to $407,000 of such Realized Losses otherwise allocable to the Class I-A-8 Certificates and up to $2,700,000 of such Realized Losses otherwise allocable to the Class I-A-9 Certificates will be allocated to the Class I-A-17 Certificates, until the Certificate Principal Balance of the Class I-A-17 Certificates has been reduced to zero. The principal portion of any Excess Special Hazard Losses, Excess Bankruptcy Losses, Excess Fraud Losses and Extraordinary Losses on Discount Mortgage Loans will be allocated to the related Class A-P Certificates in an amount equal to the related Discount Fraction thereof. The Class I-A Percentage or Class II-A Percentage (as applicable) of the remainder of the principal portion of such losses on Discount Mortgage Loans and the Class I-A Percentage or Class II-A Percentage (as applicable) of the entire amount of the principal portion of such losses on Non-Discount Mortgage Loans will be allocated to (i) the Group I Senior Certificates (other than the Class I-A-P Certificates and the Class I-A-V Certificates), on a pro rata basis (in the case of a Realized Loss on a Group I Loan), or (ii) the Group II Senior Certificates (other than the Class II-A-P Certificates and the Class II-A-V Certificates), on a pro rata basis (in the case of a Realized Loss on a Group II Loan). The remainder of the principal portion of such losses on Discount Mortgage Loans and Non-Discount Mortgage Loans will be allocated to the Class M Certificates in the related Certificate Group and Class B Certificates in the related Certificate Group on a pro rata basis. The interest portion of such losses will be allocated to all of the Certificates in the related Certificate Group, on a pro rata basis based on the Accrued Certificate Interest thereon payable from the related Loan Group in respect of the related Distribution Date. As used herein, an allocation of a Realized Loss on a "pro rata basis" among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Accrued Certificate Interest thereon payable from the related Loan Group in respect of such Distribution Date (without regard to any Compensating Interest allocated to the Available Distribution Amount of such Loan Group for such Distribution Date) in the case of an interest portion of a Realized Loss. Except as provided in the following sentence, any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will a Class of Certificates shall be allocated as follows: first, to made by reducing the Class B-6 Certificates until the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; second, to provided that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to the Class B-4 Certificates until the Class B-4 Principal Balance has been reduced to zero; fourth, to the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect Certificates in the Certificate Group related to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, below the aggregate Stated Principal Balance of the Mortgage Loans in accordance with the preceding sentence shall be allocated pro rata among related Loan Group. Any allocation of the Group I-A Certificates principal portion of Realized Losses (other than Debt Service Reductions) to the Class I-A-PO Certificates) or Group II-A related Subordinate Certificates then outstanding with the Lowest Priority shall be made by operation of the definition of "Certificate Principal Balance" and by operation of the provisions of Section 4.02(a). Allocations of the interest portions of Realized Losses (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance any interest rate reduction resulting from a Servicing Modification) shall be made in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated proportion to the Group I-A Certificates amount of Accrued Certificate Interest and by operation of the definition of "Accrued Certificate Interest" and by operation of the provisions of Section 4.02(a). Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be allocated on made by operation of the subsequent Determination Date to provisions of Section 4.02(a). Allocations of the outstanding Classes principal portion of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates Debt Service Reductions shall be allocated on made by operation of the subsequent Determination Date to the outstanding Classes provisions of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Section 4.02(a). All Realized Losses and all other losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage Interests. (d) In Interests evidenced thereby; provided that if any Subclasses of the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously Class A-V Certificates have been allocated as a Realized Loss issued pursuant to any Classes of Class A Certificates or any Classes of Class B CertificatesSection 5.01(c), each outstanding Class to which such Realized Loss had previously been Losses and other losses allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A V Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated such Subclasses in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect proportion to the preceding respective amounts of Accrued Certificate Interest payable on such Distribution DateDate that would have resulted absent such reductions.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. All Realized Losses on the Group I Loans (other than Group I Excess Losses) shall be allocated as follows: first, to the Group I Excess Cash Flow as provided in Section 4.02(c)(ix), to the extent of the Group I Excess Cash Flow for such Distribution Date, second, to the Group II Excess Cash Flow as provided in Section 4.02(d)(x), to the extent of the Group II Excess Cash Flow for such Distribution Date remaining after distributions pursuant to Section 4.02(d)(ix); third, in reduction of the Group I Overcollateralization Amount, until such amount has been reduced to zero; fourth, in reduction of the Group II Overcollateralization Amount, until such amount has been reduced to zero; fifth, to the Class M-I-3 Certificates; sixth, to the Class M-I-2 Certificates; seventh, to the Class M-I-1 Certificates; and thereafter, to the Class A-I Certificates on a pro rata basis; provided that any Realized Loss allocated to the Insured Certificates shall be covered by the Certificate Policy. Any Group I Excess Losses on the Mortgage Loans will be allocated to the Class A-I Certificates on a pro rata basis, in an amount equal to a fraction of such losses equal to (x) the aggregate Certificate Principal Balance of the Class A-I Certificates over (y) the aggregate Stated Principal Balance of the Group I Loans, and the remainder of such losses shall be allocated to the Group I Overcollateralization Amount in reduction of the amount thereof. All Realized Losses on the Group II Loans (other than Group II Excess Losses) shall be allocated as follows: first, to the Group II Excess Cash Flow as provided in Section 4.02(d)(ix), to the extent of the Group II Excess Cash Flow for such Distribution Date, second, to the Group I Excess Cash Flow as provided in Section 4.02(c)(x), to the extent of the Group I Excess Cash Flow for such Distribution Date remaining after distributions pursuant to Section 4.02(c)(ix); third, in reduction of the Group II Overcollateralization Amount, until such amount has been reduced to zero; fourth, in reduction of the Group I Overcollateralization Amount, until such amount has been reduced to zero; fifth, to the Class M-II-3 Certificates; sixth, to the Class M-II-2 Certificates; seventh, to the Class M-II-1 Certificates and thereafter, to the Class A-II Certificates. Any Group II Excess Losses 115 on the Mortgage Loans will be allocated to the Class A-II Certificates, in an amount equal to a fraction of such losses equal to (x) the Certificate Principal Balance of the Class A-II Certificates over (y) the aggregate Stated Principal Balance of the Group II Loans, and the remainder of such losses shall be allocated to the Group II Overcollateralization Amount in reduction of the amount thereof. (b) Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates until or Class M Certificates shall be made by reducing the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zero; second, to have occurred on such Distribution Date. Allocations of the Class B-5 Certificates until the Class B-5 Principal Balance has been reduced to zero; third, to the Class B-4 Certificates until the Class B-4 Principal Balance has been reduced to zero; fourth, to the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation interest portions of Realized Losses will shall be effected through the reduction made by operation of the applicable Class's Principal Balance. definition of "Accrued Certificate Interest" and by operation of the provisions of Section 4.02(c) and (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud d). All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (dc) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated I Loans shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based allocated on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the each Distribution Date in to REMIC I Regular Interest LT-A-1 until the month following the month in which such recovery is received. When the Uncertificated Principal Balance of a Class of Certificates thereof has been reduced to zero and then to REMIC I Regular Interest LT-A-2 and LT-A-3 until the Uncertificated Principal Balances thereof has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered All Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions Losses on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan Loans shall be allocated among (i) on each Class of Group IDistribution Date to REMIC I Regular Interest LT-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for until the related Distribution Date. In addition, after the Class B Uncertificated Principal Balance thereof has been reduced to zero, the interest portion of . (i) All Realized Losses on the Group I Loans shall be allocated on each Distribution Date to the following REMIC III Group I Regular Interests (other than Excess Special Hazard LossesREMIC III Regular Interests MT- IO-1, Excess Fraud Losses MT-IO-2, MT-XX-0, XX-XX-0, XX-XX-0, XX-XX-0, XX-XX-0 xxx XX-XX-8) in the specified percentages, as follows: first, to Uncertificated Accrued Interest payable to the REMIC III Regular Interests MT-I-1 and Excess Bankruptcy LossesMT-1-10 up to an aggregate amount equal to the excess of (a) occurring with respect to any the REMIC III Group I Mortgage Loan or Interest Loss Allocation Amount over (b) Prepayment Interest Shortfalls (to the extent not covered by Compensating Interest) relating to the Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates I Loans for such Distribution Date, 98% and Group II-A Certificates2%, respectively; second, based on their to the Uncertificated Principal Balances of the REMIC III Regular Interests MT-I-1 and MT-I-10 up to an aggregate amount equal to the REMIC III Group II Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated Principal Balances of REMIC III Regular Interests MT-A Interest Percentages I-1, 98%, MT-I-2, MT-I-3, MT-X-0, XX-X-0, XX-X-0, XX-X-0, XX-X-0 xxx XX-X-0, 0% xxx rata, and Group IIMT-A Interest PercentagesI-10, 1%, until the Uncertificated Balance of each of REMIC III Regular Interests MT-I-2, MT-I-3, MT-X-0, XX-X-0, XX-X-0, XX-X-0, XX-X-0 xxx XX-X-0 have been reduced to zero. (fii) All Realized Losses allocated in accordance with this Section 4.02 will on the Group II Loans shall be allocated on each Distribution Date to the Determination Date following REMIC III Group II Regular Interests in the second month following the month in which such loss was incurred with respect specified percentages, as follows: first, to Uncertificated Accrued Interest payable to the preceding REMIC III Regular Interests MT-II-1 and MT- II-6 up to an aggregate amount equal to the excess of (a) the REMIC III Group II Interest Loss Allocation Amount over (b) Prepayment Interest Shortfalls (to the extent not covered by Compensating Interest) relating to the Group II Loans for such Distribution Date., 98% and 2%, respectively; second, to the Uncertificated Principal Balances of the REMIC III Regular Interests MT-II-1 and MT-II-6 up to an aggregate amount equal to the REMIC III Group II Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated Principal Balances of 116

Allocation of Realized Losses. (a) With respect to any Distribution Date, the principal portion of All Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I on the Mortgage Loans and Group II Mortgage Loans will shall be allocated by the Trustee on each Distribution Date as follows: first, to Net Monthly Excess Cashflow, through a distribution of the Extra Principal Distribution Amount for that Distribution Date; second, to the Overcollateralized Amount by a reduction of the Certificate Principal Balance of the Class B-6 Certificates C Certificates, until the Class B-6 Certificate Principal Balance thereof has been reduced to zero; third, to the Class B Certificates, until the Certificate Principal Balance thereof has been reduced to zero; second, to the Class B-5 Certificates M-8 Certificates, until the Class B-5 Certificate Principal Balance thereof has been reduced to zero; third, to the Class B-4 Certificates M-7 Certificates, until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-3 Certificates M-6 Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 Certificates M-5 Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates M-4 Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable ninth to the Class I-A-PO or Class II-A-PO M-1 Certificates, respectively, will equal until the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Certificate Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall be allocated among the Certificates of such Class based on their Percentage Interests. (d) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates thereof has been reduced to zero; thereafter, such any Realized Losses on the Mortgage Loans will be allocated on any Distribution Date to the Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding A-1, Class in accordance with the preceding provisionsA-2, each outstanding Class shall be entitled to its A-2M, Class A-3, Class A-3M, Class A-4, Class A-4M, Class A-5, Class A-5M, Class A-6, Class A-6M and Class A-7 Certificates, on a pro rata share basis, based on the Certificate Principal Balances thereof, in each case in reduction of the Certificate Principal Balances thereof, until reduced to zero; provided however, that (determined as described abovea) of such excess up any Realized Loss applied to the amount of Class A-1 Certificates will be covered by the Certificate Guaranty Insurance Policy, (b) any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise been applied to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit Class A-2 Certificates will be applied to the Class A-2M Certificates until its Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, and then to the interest portion Class A-2 Certificates, (c) any Realized Loss that would have been applied to the Class A-3 Certificates will be applied to the Class A-3M Certificates until its Certificate Principal Balance has been reduced to zero, and then to the Class A-3 Certificates, (d) any Realized Loss that would have been applied to the Class A-4 Certificates will be applied to the Class A-4M Certificates until its Certificate Principal Balance has been reduced to zero, and then to the Class A-4 Certificates, (e) any Realized Loss that would have been applied to the Class A-5 Certificates will be applied to the Class A-5M Certificates until its Certificate Principal Balance has been reduced to zero, and then to the Class A-5 Certificates and (f) any Realized Loss that would have been applied to the Class A-6 Certificates will be applied to the Class A-6M Certificates until its Certificate Principal Balance has been reduced to zero, and then to the Class A-6 Certificates. (b) Any allocation of Realized Losses to an Offered Certificate on any Distribution Date shall be made by reducing the Certificate Principal Balance thereof by the amount so allocated. Any allocation of Realized Losses to Net Monthly Excess Cashflow shall be made by reducing the amount otherwise payable in respect of the Class C Certificates pursuant to Section 4.01(e)(vii), and any allocation of Realized Losses to the Overcollateralized Amount shall be made by reducing the Certificate Principal Balance of the Class C Certificates by the amount so allocated. (other than Excess Special Hazard Losses, Excess Fraud c) All Realized Losses and Excess Bankruptcy Losses) occurring with respect to any Group I on the Mortgage Loan or Group II Mortgage Loan will Loans shall be allocated among on each Distribution Date, first, to REMIC 1 Regular Interest OC, until the outstanding Classes of Group IUncertificated Principal Balance thereof has been reduced to zero, and second, to REMIC 1 Regular Interest I-1-A Certificates through REMIC 1 Regular Interest 1-81-B, starting with the lowest numerical denomination, until the Uncertificated Principal Balance of each such REMIC 1 Regular Interest has been reduced to zero, provided that, for REMIC 1 Regular Interests with the same numerical denomination, such Realized Losses shall be allocated pro rata between such REMIC 1 Regular Interests, and Group II-A Certificatesthird, to REMIC 1 Regular Interest P until the Uncertificated Principal Balance thereof has been reduced to zero. (d) All Realized Losses on the Mortgage Loans shall be allocated by the Trustee on each Distribution Date to the following REMIC 2 Regular Interests in the specified percentages, as follows: first, to Uncertificated Accrued Interest payable to the REMIC 2 Regular Interest AA and REMIC 2 Regular Interest ZZ up to an aggregate amount equal to the REMIC 2 Interest Loss Allocation Amount (without duplication of shortfalls allocated pursuant to Section 1.03), 98.00% and 2.00%, respectively, based on their Group Iand to the extent of any amount equal to the REMIC 2 Interest Loss Allocation Amount remaining after the foregoing allocations to REMIC 2 Regular Interests AA and ZZ, to Uncertificated Accrued Interest payable to REMIC 2 Regular Interest P to the extent of such remaining amount; second, to the Uncertificated Principal Balances of the REMIC 2 Regular Interest AA and REMIC 2 Regular Interest ZZ up to an aggregate amount equal to the REMIC 2 Principal Loss Allocation Amount, 98.00% and 2.00%, respectively; third, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest B and REMIC 2 Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest B has been reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-8 and REMIC 2 Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest M-8 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-7 and REMIC 2 Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest M-7 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-6 and REMIC 2 Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest M-6 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-5 and REMIC 2 Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest M-5 has been reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-4 and REMIC 2 Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest M-4 has been reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest AA, REMIC 2 Regular Interest M-3 and REMIC 2 Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest M-3 has been reduced to zero; tenth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest 1-A AA, REMIC 2 Regular Interest Percentages M-2 and Group IIREMIC 2 Regular Interest 1-A ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest Percentages. M-2 has been reduced to zero; eleventh, to the Uncertificated Principal Balance of REMIC 2 Regular Interest M-1 and REMIC 2 Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest M-1 has been reduced to zero; and twelfth, REMIC 2 Regular Interest 1-AA, 98.00%, to the Uncertificated Principal Balances of REMIC 2 Regular Interests X-0, X-0, X-0X, X-0, X-0X, X-0, A-4M, X-0, X-0X, X-0, X-0X and A-7, 1.00% pro rata, and to the Uncertificated Principal Balance of REMIC 2 Regular Interest ZZ, 1.00%, until the Uncertificated Principal Balances of such REMIC 2 Regular Interests X-0, X-0, X-0X, X-0, X-0X, X-0, A-4M, X-0, X-0X, X-0, X-0X and A-7 have been reduced to zero, provided that (fi) any such Realized Losses otherwise allocable to REMIC 2 Regular Interest A-2 shall be first allocated in accordance with this Section 4.02 will to REMIC 2 Regular Interest A-2M, until the Uncertificated Principal Balance thereof has been reduced to zero, (ii) any such Realized Losses otherwise allocable to REMIC 2 Regular Interest A-3 shall be first allocated on to REMIC 2 Regular Interest A-3M, until the Determination Date in Uncertificated Principal Balance thereof has been reduced to zero, (iii) any such Realized Losses otherwise allocable to REMIC 2 Regular Interest A-4 shall be first allocated to REMIC 2 Regular Interest A-4M, until the second month following Uncertificated Principal Balance thereof has been reduced to zero, (iv) any such Realized Losses otherwise allocable to REMIC 2 Regular Interest A-5 shall be first allocated to REMIC 2 Regular Interest A-5M, until the month in which Uncertificated Principal Balance thereof has been reduced to zero, and (v) any such loss was incurred with respect Realized Losses otherwise allocable to REMIC 2 Regular Interest A-6 shall be first allocated to REMIC 2 Regular Interest A-6M, until the preceding Distribution DateUncertificated Principal Balance thereof has been reduced to zero.

Allocation of Realized Losses. (a) With respect On or prior to any Distribution each Determination Date, the principal Master Servicer shall determine the amount of any Realized Loss in respect of each Loan Group in respect of each related Mortgage Loan that occurred during the immediately preceding calendar month. (b) The interest portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to each Loan Group shall be allocated to the related Certificates as described in Section 1.02 hereof. (c) The principal portion of all Realized Losses on Loan Group I Mortgage Loans and Group II Mortgage Loans will shall be allocated on each Distribution Date as follows: first, to Net Monthly Excess Cashflow as part of the Class B-6 Certificates until payment of the Class B-6 Principal Balance has been reduced to zeroGroup I Overcollateralization Increase Amount; second, to in reduction of the Class B-5 Certificates Group I Overcollateralized Amount, until the Class B-5 Principal Balance has been reduced to zero; third, to the Class I-B-4 Certificates Certificates, until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class I-B-3 Certificates Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class I-B-2 Certificates Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class I-B-1 Certificates Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class I-M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class I-M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrentlyninth, to the Group Class I-A M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero. (d) The related PO Percentage of the principal portion of all Realized Losses on Discount Mortgage Loans in the related Loan Group and the Class II-1PO Certificate Cash Shortfall in Loan Group II-1 or the Class II-1PO Certificate Cash Shortfall in Loan Group II-2, as applicable, shall be allocated to the Class II-1PO Certificates or Class II-2PO Certificates, as applicable, until the Certificate Principal Balance of the Class II-1PO Certificates or Class II-2PO Certificates, as applicable, is reduced to zero. With respect to any Distribution Date through the related Cross-Over Date, the aggregate of all amounts so allocable to the Class II-1PO Certificates and Class II-2PO Certificates on such date in respect of any Realized Losses and any Class II-1PO Certificate Cash Shortfalls and Class II-2PO Certificate Cash Shortfalls, as applicable, and all amounts previously allocated in respect of such Realized Losses or Class II-1PO Certificate Cash Shortfalls or Class II-2PO Certificate Cash Shortfalls, as applicable, and not distributed on prior Distribution Dates shall be the “Class II-1PO Certificate Deferred Amount” or “Class II-2PO Certificate Deferred Amount,” as applicable. To the extent funds are available therefor on any Distribution Date through the related Cross-Over Date, distributions in respect of the Class II-1PO Certificate Deferred Amount for the Class II-1PO Certificates and in respect of the Class II-2PO Certificate Deferred Amount for the Class II-2PO Certificates shall be made in accordance with priority fifth of clauses (b) and (c), respectively, of Section 6.07. No interest shall accrue on the Class II-1PO Certificate Deferred Amount and Class II-2PO Certificate Deferred Amount. On each Distribution Date through the related Cross-Over Date, the Certificate Principal Balance of the lowest ranking class of Group II Subordinate Certificates then outstanding shall be reduced by the amount of any distributions in respect of any Class II-1PO Certificate Deferred Amount and Class II-2PO Certificate Deferred Amount on such Distribution Date in accordance with the priorities set forth above, through the operation of the Subordinate Certificate Writedown Amount. After the related Cross-Over Date, no more distributions shall be made in respect of, and applicable Realized Losses and Class II-1PO Certificate Cash Shortfalls allocable to the Class II-1PO Certificates and Class II-2PO Certificate Cash Shortfalls allocable to the Class II-2PO Certificates will not be added to, the Class II-1PO Certificate Deferred Amount or the Class II-2PO Certificate Deferred Amount, respectively. (e) The Non-PO Percentage of the principal portion of Realized Losses on the Mortgage Loans in Loan Group II shall be allocated on any Distribution Date as follows: first, to the Class II-B-6 Certificates; second, to the Class II-B-5 Certificates; third, to the Class II-B-4 Certificates; fourth, to the Class II-B-3 Certificates; fifth, to the Class II-B-2 Certificates; and sixth, to the Class II-B-1 Certificates, in each case until the Certificate Principal Balance of such Class has been reduced to zero. Thereafter, the Non-PO Percentage of the principal portion of Realized Losses on the Mortgage Loans in Loan Group II-1 shall be allocated among the Group II-1 Senior Certificates (other than the Class I-A-PO II-1X Certificates) in proportion to their remaining Certificate Principal Balances and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and Percentage of the PO Fraction principal portion of such the Realized Losses on the Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Loans in Loan Group II Mortgage Loans, concurrently, to II-2 shall be allocated among the Group II-A II-2 Senior Certificates (other than the Class II-A-PO II-2X Certificates) and in proportion to their remaining Certificate Principal Balances. (f) No reduction of the Certificate Principal Balance of any Class II-A-PO of a related Group II Senior Certificate (other than related the Interest Only Certificates, pro rata, based ) shall be made on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation any Distribution Date on account of Realized Losses will be effected through to the extent that such reduction would have the effect of reducing the aggregate Certificate Principal Balance of all of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, Classes of the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or related Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Senior Certificates (other than the Class I-A-PO related Interest Only Certificates) or and Group II-A II Subordinate Certificates (other as of such Distribution Date to an amount less than the Class II-A-PO Certificates), respectively, and each Class Stated Principal Balances of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance related Mortgage Loans in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Loan Group II Apportioned Principal Balance in as of the case of each Class of Class B Certificates, respectively. Any such loss related Due Date. (g) All Realized Losses to be allocated to the Group I-A Certificate Principal Balances of all related Classes on any Distribution Date shall be so allocated after the actual distributions to be made on such date as provided above. All references above to the Certificate Principal Balance of any Class of Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes Certificate Principal Balance of such Class immediately prior to the relevant Distribution Date, before reduction thereof by any Realized Losses, in each case to be allocated to such Class of Certificates, on such Distribution Date. (h) Any allocation of the principal portion of Realized Losses with respect to each Loan Group I-A Certificates (other than to a related Certificate on any Distribution Date shall be made by reducing the Certificate Principal Balance thereof by the amount so allocated; any allocation of Realized Losses to Net Monthly Excess Cashflow shall be made by reducing the amount otherwise payable in respect of the Class I-A-PO Certificates) in accordance with C Certificates pursuant to priority third of Section 6.07(a). No allocations of any Realized Losses shall be made to the Certificate Principal Balances of the Group I Senior Certificates, Class I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the P, Class II-A-PO Certificates) in accordance with the Group P, Class II-A Loss Percentages as of such Determination DateB, Class I-R or Class II-R Certificates. (ci) Any All Realized Losses and all other losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) hereunder shall be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (dj) In addition, in the event that there is a Recovery of an amount the Master Servicer receives any Subsequent Recoveries in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as from the Company or the related Servicer, the Master Servicer shall deposit such funds for such Loan Group into the Distribution Account pursuant to Section 5.08. If, after taking into account such Subsequent Recoveries, the amount of a Realized Loss is reduced, the amount of such Subsequent Recoveries shall be applied to any Classes increase the Certificate Principal Balance of the related Class A of Subordinate Certificates or any Classes with the highest payment priority to which Realized Losses with respect to such Loan Group have been allocated, but not by more than the amount of Realized Losses previously allocated to that Class B of Subordinate Certificates pursuant to this Section 6.05 and, in the case of the Group I Subordinate Certificates, each outstanding not previously reimbursed to such Class of Subordinate Certificates with Net Monthly Excess Cashflow pursuant to which priority third of Section 6.07(a); provided, however, in the case of the Group I Subordinate Certificates, to the extent that no reductions to a Certificate Principal Balance of such Class of Subordinate Certificates currently exists as the result of a prior allocation of a Realized Loss had previously been allocated with respect to Loan Group I, such Subsequent Recoveries with respect to such Loan Group shall be applied as Excess Spread to such Loan Group. Holders of Certificates will not be entitled to its share (with any payment in respect of current interest on the amount of increases described herein for any Interest Accrual Period preceding the Distribution Date on which such increase occurs. Any such increases shall be applied to the Certificate Principal Balance of each related Subordinate Certificate of such Class in accordance with its respective Percentage Interest. (i) The interest portion of Realized Losses on the Mortgage Loans in Loan Group I shall be allocated on each Distribution Date first, to Uncertificated Accrued Interest payable to REMIC I Regular Interest AA and REMIC I Regular Interest ZZ up to an aggregate amount equal to the REMIC I Interest Loss Allocation Amount (without duplication of any such amount attributable to allocations of Net Interest Shortfalls on such Distribution Date pursuant to Section 1.02), 98% and 2%, respectively, and thereafter, to Uncertificated Accrued Interest payable to the REMIC I Regular Interests (other than REMIC I Regular Interest I-A-PO and Class II-A-PO CertificatesP), pro rata, based on the PO Fraction Uncertificated Accrued Interest for each such REMIC I Regular Interest prior to such allocation. The principal portion of Realized Losses on the Mortgage Loans in Loan Group I shall be allocated on each Distribution Date to the following REMIC I Regular Interests in the specified percentages, as follows: first, to Uncertificated Accrued Interest payable to REMIC I Regular Interest AA and REMIC I Regular Interest ZZ up to an aggregate amount equal to the REMIC I Interest Loss Allocation Amount (without duplication of any such amount attributable to allocations of Net Interest Shortfalls or the interest portion of Realized Losses on such Distribution Date pursuant to Section 1.02 or the preceding sentence), 98% and 2%, respectively; second, to the Uncertificated Principal Balances of REMIC I Regular Interest AA and REMIC I Regular Interest ZZ up to an aggregate amount equal to the REMIC I Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest I-B-4 and REMIC I Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest I-B-4 has been reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest I-B-3 and REMIC I Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest I-B-3 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest I-B-2 and REMIC I Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest I-B-2 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest I-B-1 and REMIC I Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest I-B-1 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest I-M-3 and REMIC I Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest I-M-3 has been reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest I-M-2 and REMIC I Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest I-M-2 has been reduced to zero; and ninth, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest I-M-1 and REMIC I Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest I-M-1 has been reduced to zero. (ii) The interest portion of Realized Losses on the Mortgage Loans in Loan andGroup II shall be allocated on each Distribution Date among REMIC II Regular Interest 1-Sub, REMIC II Regular Interest 1-ZZZ, REMIC II Regular Interest 2-Sub, REMIC II Regular Interest 2-ZZZ, REMIC III Regular Interest I-X and REMIC III Regular Interest II-X, pro rata, based on the Uncertificated Accrued Interest for each such REMIC II Regular Interest prior to such allocation. The principal portion of Realized Losses on the Mortgage Loans in Loan Group II-1 and Loan Group II-2, as applicable, shall be applied on each Distribution Date, first, to the related REMIC II Regular Interest ending with respect the designation “Sub,” so that the Uncertificated Principal Balance of each such REMIC II Regular Interest is equal to 0.1% of the excess of (x) the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group (other than principal balance attributable to the Class A II-1PO Certificates and Class II-2PO Certificates) over (y) the aggregate Certificate Principal Balance of the related Group II Senior Certificates (other than the Class I-A-PO II-1PO Certificates and Class II-A-PO II-2PO Certificates) (except that if any such excess is a larger number than in the preceding distribution period, the least amount of Realized Losses shall be applied to such REMIC II Regular Interests such that the REMIC II Subordinated Balance Ratio is maintained); and Class B Certificatessecond, based any remaining Realized Losses on their pro rata share the Mortgage Loans in each of the Non-PO Fraction of such Mortgage Loan) of such Recovery up Loan Group II-1 and Loan Group II-2, as applicable, shall be allocated to the amount related REMIC II Regular Interests ending with the designation “ZZZ” (except that if a Realized Loss is recognized with respect to a Discount Mortgage Loan in Loan Group II-1 or Loan Group II-2, as applicable, the related PO Percentage of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group to REMIC II Regular Interest I-A Certificates PO or Group REMIC II Regular Interest II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A CertificatesPO, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages). (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect On or prior to any Distribution each Determination Date, the principal Securities Administrator shall determine the amount of any Realized Loss in respect of each Mortgage Loan that occurred during the immediately preceding calendar month, based solely on the reports delivered by the Servicer pursuant to this Agreement. (b) The interest portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I on the Mortgage Loans and Group II shall be allocated to the Certificates as described in Section 1.02 hereof. (c) The principal portion of all Realized Losses on the Mortgage Loans will shall be allocated on each Distribution Date as follows: first, to in reduction of the Class B-6 Certificates until the Class B-6 Principal Balance has been reduced to zeroMonthly Excess Cashflow; second, to the Class B-5 Certificates X Certificates, until the Class B-5 Certificate Principal Balance thereof has been reduced to zero; third, to the Class B-4 Certificates M-5 Certificates, until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-3 Certificates M-4 Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 Certificates M-3 Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates M-2 Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, with respect to Realized Losses on the Group I Mortgage Loans only, to the Class I-A-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, with respect to Realized Losses on the Group II Mortgage Loans only, to the Class II-A-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and seventhtenth, (i) with respect to such losses occurring with respect to Realized Losses on the Group I III Mortgage Loans, concurrentlyLoans only, to the Group IClass III-A Certificates (other than A-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero. All such Realized Losses to be allocated to the Certificate Principal Balances of the Class I-AA-2, Class II-PO Certificates) A-2 and Class III-A-4 Certificates and all Classes of Subordinate Certificates on any Distribution Date shall be so allocated after the actual distributions to be made on such date as provided above. All references above to the Certificate Principal Balance of any Class I-A-PO CertificatesA-2, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-AA-2, Class III-PO A-4 Certificates or any Class of Subordinate Certificates shall be to the Certificate Principal Balance of such Class immediately prior to the relevant Distribution Date, before reduction thereof by any Realized Losses, in each case to be allocated to such Class of Certificates) and , on such Distribution Date. Any allocation of the principal portion of Realized Losses to a Class I-A-2, Class II-AA-2 or Class III-PO Certificates, pro rata, based A-4 Certificate or a Subordinate Certificate on any Distribution Date shall be made by reducing the Non-PO Fraction and Certificate Principal Balance thereof by the PO Fraction of such Mortgage Loans, respectively. This amount so allocated; any allocation of Realized Losses will to a Class X Certificate shall be effected through made by reducing the reduction amount otherwise payable in respect thereof pursuant to Section 5.04(iii)(14). No allocations of any Realized Losses shall be made to the applicable Class's Certificate Principal Balance. (b) With respect to any Distribution Date, the principal portion Balances of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or A-1, Class II-AA-1, Class III-PO A-1, Class III-A-2, Class III-A-3 or Class P Certificates, respectively, will equal the product of the amount of any . All such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Realized Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (d) In Notwithstanding anything to the event contrary contained herein, if on any Distribution Date the Securities Administrator discovers, based solely on the reports delivered by the Servicer under this Agreement that there is a Recovery any Subsequent Recoveries have been collected by the Servicer with respect to the Mortgage Loans, the amount of an amount in such Subsequent Recoveries will be applied to increase the Certificate Principal Balance of (i) the Class I-A-2 Certificates with respect to Subsequent Recoveries relating to the Group I Mortgage Loans, (ii) the Class II-A-2 Certificates with respect to Subsequent Recoveries relating to the Group II Mortgage Loans, (iii) the Class III-A-4 Certificates with respect to Subsequent Recoveries relating to the Group III Mortgage Loans and (iv) the Class of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Subordinate Certificates or any Classes of Class B Certificates, each outstanding Class with the highest payment priority to which such Realized Loss had Losses on the Mortgage Loans have been allocated, but not by more than the amount of Realized Losses previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and A-2, Class II-AA-2 or Class III-PO CertificatesA-4 Certificates or that Class of Subordinate Certificates pursuant to this Section 5.05. After the Certificate Principal Balances of the Class I-A-2, based on Class II-A-2 and Class III-A-4 Certificates have been increased up to the PO Fraction amount of Realized Losses allocated thereto pursuant to this Section 5.05 to the extent that such Mortgage Loan andApplied Loss Amounts have not been paid to such certificates as a Deferred Amount, any additional Subsequent Recoveries with respect to the Class A Certificates (other than Mortgage Loans will be applied to increase the Certificate Principal Balance of the Subordinate Certificates, beginning with the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificatesof Subordinate Certificates with the next highest payment priority, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss Losses previously allocated to such Class on of Certificates pursuant to this Section 5.05 but only to the Distribution Date in the month following the month in which extent that any such recovery is received. When the Principal Balance of a Applied Loss Amount has not been paid to any Class of Certificates has been reduced to zero, as a Deferred Amount. Holders of such Class shall Certificates will not be entitled to any share payment in respect of such Recovery. In the event that current interest on the amount of such Recovery exceeds increases for any Accrual Period preceding the amount Distribution Date on which such increase occurs. Any such increases shall be applied to the Certificate Principal Balance of each Class I-A-2, Class II-A-2 or Class III-A-4 Certificate or each Subordinate Certificate of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loanrespective Percentage Interest. (e) The interest portion REMIC I Marker Allocation Percentage of Excess Special Hazard Losses, Excess Fraud all Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I on the Mortgage Loan or Group II Mortgage Loan Loans shall be allocated among (i) on each Class of Group I-A Certificates or Group II-A CertificatesDistribution Date to the following REMIC I Regular Interests in the specified percentages, as applicablefollows: first, to Uncertificated Accrued Interest payable to the REMIC I Regular Interest LTI-AA and (ii) each Class REMIC I Regular Interest LTI-ZZ up to an aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated Principal Balances of Class B CertificatesREMIC I Regular Interest LTI-AA, pro rata based upon each Class's Group REMIC I Apportioned Regular Interest Percentage or Group II Apportioned LTI-M5 and REMIC I Regular Interest PercentageLTI-ZZ, as applicable for 98%, 1% and 1%, respectively, until the related Distribution Date. In addition, after the Class B Uncertificated Principal Balance of REMIC I Regular Interest LTI-M5 has been reduced to zero; third, to the Uncertificated Principal Balances of the REMIC I Regular Interest LTI-AA and REMIC I Regular Interest LTI-ZZ up to an aggregate amount equal to the REMIC I Principal Loss Allocation Amount, 98% and 2%, respectively; fourth, to the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-M4 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest LTI-M4 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-M3 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest LTI-M3 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-M2 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest LTI- M2 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-M1 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest LTI-M1 has been reduced to zero; eighth, with respect to Realized Losses on the Group I Mortgage Loans only, to the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-IA2 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IA2 has been reduced to zero; ninth, with respect to Realized Losses on the Group II Mortgage Loans only, to the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-IIA2 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IIA2 has been reduced to zero; and tenth, with respect to Realized Losses on the Group III Mortgage Loans only, to the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-IIIA4 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IIIA4 has been reduced to zero. The REMIC I Sub WAC Allocation Percentage of all Realized Losses on the Mortgage Loans shall be applied after all distributions have been made on each Distribution Date first, so as to keep the Uncertificated Principal Balance of each REMIC I Regular Interest ending with the designation “GRP” equal to 0.01% of the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group; second, to each REMIC I Regular Interest ending with the designation “SUB,” so that the Uncertificated Balance of each such REMIC I Regular Interest is equal to 0.01% of the excess of (x) the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group over (y) the current Certificate Principal Balance of the Senior Certificate in the related Loan Group (except that if any such excess is a larger number than in the preceding distribution period, the interest portion least amount of Realized Losses (other than Excess Special Hazard Lossesshall be applied to such REMIC I Regular Interests such that the REMIC I Subordinated Balance Ratio is maintained); and third, Excess Fraud any remaining Realized Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will shall be allocated among the outstanding Classes of Group Ito REMIC I Regular Interest LTI-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest PercentagesXX. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect to any Distribution Date, the principal portion of All Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I on the Mortgage Loans and Group II Mortgage Loans will shall be allocated by the Trustee on each Distribution Date as follows: first, to related Net Monthly Excess Cashflow, through a distribution of the related Extra Principal Distribution Amount for that Distribution Date; second, to the unrelated Net Monthly Excess Cashflow; third, to the related Overcollateralized Amount by a reduction of the Certificate Principal Balance of the related Class C Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fourth, if such Realized Loss is on a Group 1 Loan, first, to the Class B-6 Certificates 1-B Certificates, until the Class B-6 Certificate Principal Balance thereof has been reduced to zero; second, to the Class B-5 Certificates 1-M-8 Certificates, until the Class B-5 Certificate Principal Balance thereof has been reduced to zero; third, to the Class B-4 Certificates 1-M-7 Certificates, until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-3 Certificates 1-M-6 Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 Certificates 1-M-5 Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates 1-M-4 Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class 1-M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class 1-M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, ninth to the Class 1-M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; thereafter, any Realized Losses on the Group I-A Certificates (other than 1 Loans will be allocated on any Distribution Date to the Class I1-A1-A, Class 1-PO Certificates) A1-B, Class 1-A1-C and Class I-A-PO [ ] Certificates, pro rata, based on the NonCertificate Principal Balances thereof, in each case in reduction of the Certificate Principal Balances thereof, until reduced to zero, provided that any such Realized Loss otherwise allocable to the Class 1-PO Fraction A1-A, Class 1-A1-B and Class 1-A1-C Certificates shall be first allocated to the PO Fraction of such Mortgage Loans[ ] Certificates, respectivelyuntil reduced to zero, and (ii) with respect to if such losses occurring with respect to Realized Loss is on a Group II Mortgage Loans, concurrently2 Loan, to the Group II-A [ ] Certificates; provided, however, that any Realized Loss applied to the [ ] Certificates will be covered by the Certificate Guaranty Insurance Policy. (other than the Class II-A-PO Certificatesa) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This Any allocation of Realized Losses will to an Offered Certificate or Class 1-B Certificates on any Distribution Date shall be effected through made by reducing the reduction Certificate Principal Balance thereof by the amount so allocated. Any allocation of Realized Losses to Net Monthly Excess Cashflow related to Loan Group 1 shall be made by reducing the amount otherwise payable in respect of the applicable Class's Class 1-C Certificates pursuant to Section 4.01(l)(xii), and any allocation of Realized Losses to Group 1 Overcollateralized Amount shall be made by reducing the Certificate Principal BalanceBalance of the Class 1-C Certificates by the amount so allocated. Any allocation of Realized Losses to Net Monthly Excess Cashflow related to Loan Group 2 shall be made by reducing the amount otherwise payable in respect of the Class 2-C Certificates pursuant to Section 4.01(m)(xi), and any allocation of Realized Losses to Group 2 Overcollateralized Amount shall be made by reducing the Certificate Principal Balance of the Class 2-C Certificates by the amount so allocated. No allocations of any Realized Losses shall be made to the Certificate Principal Balance of the Class 1-P Certificates and Class 2-P Certificates. (b) With respect to any All Realized Losses on the Group 1 Loans shall be allocated on each Distribution Date, first, to REMIC 1 Regular Interest OC until the principal portion of Excess Special Hazard LossesUncertificated Principal Balance thereof has been reduced to zero, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect second, to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class IREMIC 1 Regular Interest 1-A1-PO or Class IIA through REMIC 1 Regular Interest 1-A84-PO CertificatesB, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance starting with the preceding sentence lowest numerical denomination until the Uncertificated Principal Balance of each such REMIC 1 Regular Interest has been reduced to zero; provided that, for REMIC 1 Regular Interests with the same numerical denomination, such Realized Losses shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of between such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination DateREMIC 1 Regular Interests. (c) Any All Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) on the Group 2 Loans shall be allocated among on each Distribution Date, first, to REMIC 2 Regular Interest OC until the Certificates Uncertificated Principal Balance thereof has been reduced to zero, and second, to REMIC 2 Regular Interest 1-1-A through REMIC 2 Regular Interest 1-117-B, starting with the lowest numerical denomination until the Uncertificated Principal Balance of each such Class based on their Percentage REMIC 2 Regular Interest has been reduced to zero; provided that, for REMIC 2 Regular Interests with the same numerical denomination, such Realized Losses shall be allocated pro rata between such REMIC 2 Regular Interests. (d) In All Realized Losses on the event that there is a Recovery Group 1 Loans shall be allocated by the Trustee on each Distribution Date to the following REMIC 3 Group 1 Regular Interests in the following specified percentages: first, to Uncertificated Accrued Interest payable to the REMIC 3 Regular Interest 1-AA and REMIC 3 Regular Interest 1-ZZ up to an aggregate amount equal to the REMIC 3 Group 1 Interest Loss Allocation Amount (without duplication of shortfalls allocated pursuant to Section 1.03), [98.00]% and [2.00]%, respectively, and to the extent of any amount equal to the REMIC 3 Group 1 Interest Loss Allocation Amount remaining after the foregoing allocations to REMIC 3 Regular Interests 1-AA and 1-ZZ, to Uncertificated Accrued Interest payable to REMIC 3 Regular Interest 1-P to the extent of such remaining amount; second, to Uncertificated Accrued Interest payable to the REMIC 3 Regular Interest 2-AA and REMIC 3 Regular Interest 2-ZZ up to an aggregate amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss equal to any Classes portion of Class A Certificates or any Classes the REMIC 3 Group 2 Interest Loss Allocation Amount remaining after the allocation of Class B CertificatesRealized Losses on the Group 2 Loans pursuant to clause (e) below (without duplication of shortfalls allocated pursuant to Section 1.03), each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect [98.00]% and [2.00]%, respectively, and to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction extent of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the any amount of such Realized portion of the REMIC 3 Group 2 Interest Loss previously allocated Allocation Amount remaining after the foregoing allocations to REMIC 3 Regular Interests 2-AA and 2-ZZ, to Uncertificated Accrued Interest payable to REMIC 3 Regular Interest 2-P to the extent of such Class on remaining amount; third, to the Distribution Date in Uncertificated Principal Balances of REMIC 3 Regular Interest 1-AA and REMIC 3 Regular Interest 1-ZZ up to an aggregate amount equal to the month following REMIC 3 Group 1 Principal Loss Allocation Amount, [98.00]% and [2.00]%, respectively; fourth, to the month in which such recovery is received. When Uncertificated Principal Balances of REMIC 3 Regular Interest 1-AA, REMIC 3 Regular Interest 1-B and REMIC 3 Regular Interest 1-ZZ, [98.00]%, [ ]% and [ ]%, respectively, until the Uncertificated Principal Balance of a Class of Certificates REMIC 3 Regular Interest 1-B has been reduced to zero; fifth, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount Uncertificated Principal Balances of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisionsREMIC 3 Regular Interest 1-AA, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan.REMIC 3 Regular Interest (e) The interest portion of Excess Special Hazard Losses, Excess Fraud All Realized Losses and Excess Bankruptcy Losses occurring with respect to any on the Group I Mortgage Loan or Group II Mortgage Loan 2 Loans shall be allocated among by the Trustee on each Distribution Date to the following REMIC 3 Group 2 Regular Interests in the following specified percentages: first, to Uncertificated Accrued Interest payable to the REMIC 3 Regular Interest 2-AA and REMIC 3 Regular Interest 2-ZZ up to an aggregate amount equal to the REMIC 3 Group 2 Interest Loss Allocation Amount (iwithout duplication of shortfalls allocated pursuant to Section 1.03), [98.00]% and [2.00]%, respectively, and to the extent of any amount equal to the REMIC 3 Group 2 Interest Loss Allocation Amount remaining after the foregoing allocations to REMIC 3 Regular Interests 2-AA and 2-ZZ, to Uncertificated Accrued Interest payable to REMIC 3 Regular Interest 2-P to the extent of such remaining amount; second, to Uncertificated Accrued Interest payable to the REMIC 3 Regular Interest 1-AA and REMIC 3 Regular Interest 1-ZZ up to an aggregate amount equal to any portion of the REMIC 3 Group 1 Interest Loss Allocation Amount remaining after the allocation of Realized Losses on the Group 1 Loans pursuant to clause (d) each Class above (without duplication of shortfalls allocated pursuant to Section 1.03), [98.00]% and [2.00]%, respectively, and to the extent of any amount of such portion of the REMIC 3 Group I1 Interest Loss Allocation Amount remaining after the foregoing allocations to REMIC 3 Regular Interests 1-AA and 1-ZZ, to Uncertificated Accrued Interest payable to REMIC 3 Regular Interest 1-P to the extent of such remaining amount; third, to the Uncertificated Principal Balances of the REMIC 3 Regular Interest 2-AA and REMIC 3 Regular Interest 2-ZZ up to an aggregate amount equal to the REMIC 3 Group 2 Principal Loss Allocation Amount, [98.00]% and [2.00]%, respectively; and fourth, to the Uncertificated Principal Balances of REMIC 3 Regular Interest 2-AA, REMIC 3 Regular Interest 2-A Certificates or Group IIand REMIC 3 Regular Interest 2-ZZ, [98.00]%, [ ]% and [ ]%, respectively, until the Uncertificated Principal Balance of REMIC 3 Regular Interest 2-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect to On any Distribution Date, (x) the applicable AP Percentage of the principal portion of each Realized Losses Loss (other than Debt Service Reductions, any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy LossesLoss) occurring with in respect to Group I of a Mortgage Loans and Group II Loan in each Mortgage Loans Pool will be allocated as followsto the AP(1) Component, AP(2) Component and AP(3) Component until the Component Principal Amount thereof has been reduced to zero; and (y) the applicable Non-AP Percentage of the principal portion of each Realized Loss (other than any Excess Loss) in respect of a Mortgage Loan shall be allocated in the following order of priority: first, to the Class B-6 Certificates B6 Certificates, until the Class B-6 Principal Balance Amount thereof has been reduced to zero; second, to the Class B-5 Certificates B5 Certificates, until the Class B-5 Principal Balance Amount thereof has been reduced to zero; third, to the Class B-4 Certificates B4 Certificates, until the Class B-4 Principal Balance Amount thereof has been reduced to zero; fourth, to the Class B-3 Certificates B3 Certificates, until the Class B-3 Principal Balance Amount thereof has been reduced to zero; fifth, to the Class B-2 Certificates B2 Certificates, until the Class B-2 Principal Balance Amount thereof has been reduced to zero; sixth, to the Class B-1 Certificates B1 Certificates, until the Class B-1 Principal Balance Amount thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group IClasses of Non-A AP Senior Certificates (other than and Non-AP Senior Components of the Class I-A-PO Certificates) and Class I-A-PO Certificatesrelated Certificate Group, pro rata, based on in accordance with their Class Principal Amounts or Component Principal Amounts; provided, however, that (i) any Realized Loss that would otherwise be allocated to the NonClass 1-PO Fraction and A8 Certificates will be allocated to the PO Fraction Class 1-A10 Certificates until the Class Principal Amount of such Mortgage Loans, respectively, and the Class 1-A10 Certificates has been reduced to zero; (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, any Realized Loss that would otherwise be allocated to the Group IIClass 2-A A8 Certificates (other than will be allocated to the Class II2-AA9 Certificates until the Class Principal Amount of the Class 2-PO CertificatesA9 Certificates has been reduced to zero; and (iii) any Realized Loss that would otherwise be allocated to the Class 3-A7 Certificates will be allocated to the Class 3-A10 Certificates until the Class Principal Amount of the Class 3-A10 Certificates has been reduced to zero; and provided, further, that any such loss allocated to any Class II-A-PO Certificates, pro rata, based of Accrual Certificates or Accrual Component shall be allocated (subject to Section 5.03(c)) on the Non-PO Fraction basis of the lesser of (x) the Class Principal Amount (or Component Principal Amount) thereof immediately prior to the applicable Distribution Date and (y) the PO Fraction of such Mortgage Loans, respectively. This allocation of Class Principal Amount (or Component Principal Amount) thereof on the Closing Date (as reduced by any Realized Losses will be effected through the reduction of the applicable Class's Principal Balancepreviously allocated thereto). (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class Iapplicable Non-A-PO or Class II-A-PO Certificates, respectively, will equal the product AP Percentage of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with Loss in respect to any of a Mortgage Loan in Loan Group I or Loan Group IIshall be allocated, respectivelypro rata, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Subordinate Certificates and related Certificate Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO basis of the Apportioned Principal Balance or Group II-A Non-PO Principal Balance in Balances of the case Classes of such Group I-A Certificates or Group II-A Subordinate Certificates and Class Principal Amounts or Component Principal Amounts of the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B CertificatesSenior Certificates and Components; provided, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and that any such loss allocated to the Group II-A any Class of Accrual Certificates (and any Accrual Component) shall be allocated (subject to Section 5.03(c)) on the subsequent Determination Date basis of the lesser of (x) the Class Principal Amount or Component Principal Amount thereof immediately prior to the outstanding Classes of Group II-A Certificates applicable Distribution Date and (other than y) the Class II-A-PO CertificatesPrincipal Amount or Component Principal Amount thereof on the Closing Date (as reduced by any Realized Losses previously allocated thereto). The applicable AP Percentage of the principal portion of an Excess Loss in a Mortgage Pool will be applied to the AP(1) in accordance with Component, AP(2) Component and AP(3) Component until the Group II-A Loss Percentages as of such Determination DateClass Principal Amounts or the Component Principal Amounts thereof have been reduced to zero. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates Components pursuant to Section 4.02(a5.03(a) or Section 4.02(b(b) shall be allocated among the Certificates of such Class based or Component in proportion to their respective Certificate Principal Amounts or Component Principal Amounts. Any allocation of Realized Losses pursuant to this paragraph (c) shall be accomplished by reducing the Certificate Principal Amount or Component Principal Amounts of the related Certificates or Components on their Percentage Intereststhe related Distribution Date in accordance with Section 5.03(d). (d) Realized Losses allocated in accordance with this Section 5.03 shall be allocated on the Distribution Date in the month following the month in which such loss was incurred and, in the case of the principal portion thereof, after giving effect to distributions made on such Distribution Date, except that the aggregate amount of Realized Losses to be allocated to the Principal Only Certificates on such Distribution Date will be taken into account in determining distributions in respect of any related AP Deferred Amount for such date. (e) On each Distribution Date, the Subordinate Certificate Writedown Amount for such date shall effect a corresponding reduction in the Certificate Principal Amount of the lowest ranking Class of outstanding Subordinate Certificates, which reduction shall occur on such Distribution Date after giving effect to distributions made on such Distribution Date. (f) In the event that there is a Recovery recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group Loan, which amount had previously been allocated as a Realized Loss to any one or more Classes of Class A Certificates or any Classes of Class B CertificatesComponents, each outstanding Class or Component to which any portion of such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificatesreceive, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When , its pro rata share (based on the Class Principal Balance Amount thereof) of a Class such recovery, up to the amount of Certificates has been reduced the portion of such Realized Loss previously allocated to zero, such Class shall not be entitled to any share of such Recoveryor Component. In the event that the total amount of such Recovery recovery exceeds the amount of such Recovery Realized Loss allocated to each the outstanding Class Classes or Components in accordance with the preceding provisions, each outstanding Class of Certificates or Component shall be entitled to receive its pro rata share (determined as described above) of the amount of such excess excess, up to the amount of any unrecovered Realized Loss previously allocated to such ClassClass or Component. Notwithstanding Any such recovery allocated to a Class of Certificates shall not further reduce the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization Certificate Principal Amount or Component Principal Amount of such loss and (i) is the result Certificate. Any such amounts not otherwise allocated to any Class of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller Certificates pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, this subsection shall be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated Prepayments for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loanthis Agreement. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect All Realized Losses on the Mortgage Loans allocated to any Distribution Date, REMIC II Regular Interest pursuant to Section 5.05(c) on the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will shall be allocated by the Trustee on each Distribution Date as follows: first, to Excess Spread as part of the Class B-6 Certificates until payment in respect of the Class B-6 Extra Principal Balance has been reduced to zeroDistribution Amount for such Distribution Date; second, to the Class B-5 Certificates CE Interest and Class CE Certificates, until the Class B-5 Certificate Principal Balance or Uncertificated Principal Balance thereof, as applicable, has been reduced to zero; third, to the Class B-4 Certificates M-7 Certificates, until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-3 Certificates M-6 Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 Certificates M-5 Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates M-4 Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO M-3 Certificates, pro rata, based on until the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect Certificate Principal Balance thereof has been reduced to such losses occurring with respect to Group II Mortgage Loans, concurrentlyzero; eighth, to the Group II-Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the related Class or Classes of Class A Certificates (other than Certificates, on a pro rata basis, until the Certificate Principal Balances thereof have been reduced to zero; and eleventh, to the unrelated Class or Classes of Class A Certificates, on a pro rata basis, until the Certificate Principal Balances thereof have been reduced to zero; provided, however, any such Realized Losses otherwise allocable to the Class II-A-PO Certificates) and A-1 Certificates shall be allocated first to the Class II-A-PO A-2 Certificates, pro ratauntil the Certificate Principal Balance thereof has been reduced to zero, based and then to the Class II-A-1 Certificates. All Realized Losses to be allocated to the Certificate Principal Balances of all Classes on any Distribution Date shall be so allocated after the Non-PO Fraction and actual distributions to be made on such date as provided above. All references above to the PO Fraction Certificate Principal Balance of any Class of Certificates shall be to the Certificate Principal Balance of such Mortgage LoansClass immediately prior to the relevant Distribution Date, respectively. This allocation before reduction thereof by any Realized Losses, in each case to be allocated to such Class of Realized Losses will be effected through the reduction of the applicable Class's Principal BalanceCertificates, on such Distribution Date. (b) With respect Any allocation of Realized Losses to a Class of Certificates on any Distribution Date, Date shall be made by reducing the principal portion Certificate Principal Balance thereof by the amount so allocated; any allocation of Excess Special Hazard Losses, Excess Fraud Realized Losses to a Class CE Interest and Excess Bankruptcy Class CE Certificates shall be made by reducing the amount otherwise payable in respect thereof pursuant to clause (H) of Section 5.04(a)(4). No allocations of any Realized Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable shall be made to the Class I-A-PO Certificate Principal Balance or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO CertificatesUncertificated Principal Balance, as applicable, in accordance with of the preceding sentence Class P Interest and the Class P Certificates. Notwithstanding the foregoing, no such allocation of any Realized Loss shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each made on a Distribution Date to any Class of Class B Certificates based on to the Group I-A Non-PO extent that such allocation would result in the reduction of the aggregate Certificate Principal Balance or Group II-A Non-PO Principal Balance in of all the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Distribution Date, after giving effect to all distributions and prior allocations of Realized Losses on the Mortgage Loans on such date, to an amount less than the aggregate Stated Principal Balance of all of the Mortgage Loans as of the first day of the month of such Distribution Date (such limitation, the “Loss Allocation Limitation”). In addition in no event will the Certificate Principal Balance of any Certificate be reduced more than once in respect of any particular amount both (i) allocable to such Certificate in respect of Realized Losses and any such loss allocated (ii) payable as principal to the Group II-A Holder of such Certificate from Remaining Excess Spread. As used herein, an allocation of a Realized Loss on a “pro rata basis” among two or more specified Classes of Certificates shall be allocated means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the subsequent Determination Date basis of their then outstanding Certificate Principal Balances prior to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of giving effect to distributions to be made on such Determination Distribution Date. (c) Any . All Realized Losses and all other losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (di) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated I Loans shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based allocated on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the each Distribution Date in to REMIC I Regular Interest I-1-A through REMIC I Regular Interest I-60-B, starting with the month following the month in which lowest numerical denomination until such recovery is received. When the Principal Balance of a Class of Certificates REMIC I Regular Interest has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance provided that, for REMIC I Regular Interests with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loansame numerical denomination, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) pro rata between such REMIC I Regular Interests. All Realized Losses on the Group II Loans shall be allocated on each Class of Group IDistribution Date to REMIC I Regular Interest II-1-A Certificates or Group IIthrough REMIC I Regular Interest II-60-A CertificatesB, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group starting with the lowest numerical denomination until such REMIC I Apportioned Regular Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, provided that, for REMIC I Regular Interests with the interest portion of same numerical denomination, such Realized Losses shall be allocated pro rata between such REMIC I Regular Interests (other than Excess Special Hazard Lossesii) The REMIC II Marker Percentage of all Realized Losses on the Mortgage Loans (without duplication of losses allocated pursuant to Section 1.02) shall be allocated by the Trustee on each Distribution Date to the following REMIC II Regular Interests in the specified percentages, Excess Fraud Losses as follows: first, to Uncertificated Accrued Interest payable to the REMIC II Regular Interest AA and Excess Bankruptcy Losses) occurring REMIC II Regular Interest ZZ up to an aggregate amount equal to the REMIC II Interest Loss Allocation Amount, 98.00% and 2.00%, respectively; second, to the Uncertificated Principal Balances of the REMIC II Regular Interest AA and REMIC II Regular Interest ZZ up to an aggregate amount equal to the REMIC II Principal Loss Allocation Amount, 98.00% and 2.00%, respectively; third, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-7 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-7 has been reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-6 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-6 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-5 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-5 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-4 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-4 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-3 and REMIC II Regular Interest ZZ, 98.00%, 1.00%, and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-3 has been reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-2 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-2 has been reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-1 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC II Regular Interest M-1 has been reduced to zero; tenth, with respect to any Group I Realized Losses on the Mortgage Loan or Group Loans, to the Uncertificated Principal Balance of REMIC II Regular Interest AA, 98.00%, to the Uncertificated Principal Balances of the related REMIC II Regular Interests X-X-0, X-X-0, X-X-0, XX-X-0 xxx XX-X-0, 1.00% pro rata, and to the Uncertificated Principal Balance of REMIC II Regular Interest ZZ, 1.00%, until the Uncertificated Principal Balances of such REMIC II Regular Interests X-X-0, X-X-0, X-X-0, XX-X-0 and II-A-2 have been reduced to zero; and eleventh, with respect to any Realized Losses on the Mortgage Loan will Loans, to the Uncertificated Principal Balance of REMIC II Regular Interest AA, 98.00%, to the Uncertificated Principal Balances of the unrelated REMIC II Regular Interests X-X-0, X-X-0, X-X-0, XX-X-0 xxx XX-X-0, 1.00% pro rata, and to the Uncertificated Principal Balance of REMIC II Regular Interest ZZ, 1.00%, until the Uncertificated Principal Balances of such REMIC II Regular Interests X-X-0, X-X-0, X-X-0, XX-X-0 and II-A-2 have been reduced to zero; provided, however, any such Realized Losses otherwise allocable to REMIC II Regular Interest II-A-1 shall be allocated among the outstanding Classes of Group I-A Certificates and Group first to REMIC II Regular Interest II-A CertificatesA-2, respectivelyuntil the Uncertificated Principal Balance thereof has been reduced to zero, based on their Group I-A and then to REMIC II Regular Interest Percentages and Group II-A Interest PercentagesA-1. (fiii) The REMIC II Sub WAC Allocation Percentage of all Realized Losses allocated shall be applied after all distributions have been made on each Distribution Date first, so as to keep the Uncertificated Principal Balance of each REMIC II Regular Interest ending with the designation “Grp” equal to 0.01% of the aggregate Stated Principal Balance of the Mortgage Loans in accordance the related Loan Group; second, to each REMIC II Regular Interest ending with this Section 4.02 will the designation “Sub” so that the Uncertificated Principal Balance of each such REMIC II Regular Interest is equal to 0.01% of the excess of (x) the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group over (y) the current Certificate Principal Balances of the Class A Certificates related to such Loan Group (except that if any such excess is a larger number than in the preceding distribution period, the least amount of Realized Losses shall be applied to such REMIC II Regular Interests such that the REMIC II Subordinated Balance Ratio is maintained); and third, any remaining Realized Losses shall be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution DateREMIC II Regular Interest XX.

Allocation of Realized Losses. (a) With respect to On any Distribution Date, (i) the related Applicable Fraction of the principal portion of each Realized Losses Loss (other than Debt Service Reductions, any Excess Special Hazard Losses, Excess Fraud Losses Loss) in respect of a Mortgage Loan in Collateral Group P1 and Excess Bankruptcy Losses) occurring with respect to Collateral Group I Mortgage Loans and Group II Mortgage Loans P2 will be allocated as followsto and reduce the Certificate Principal Amount of the Class AP1 and Class AP2 Certificates, respectively, until the Certificate Principal Amount thereof has been reduced to zero; and (ii) the related Applicable Fraction of the principal portion of each Realized Loss (other than any Excess Loss) in respect of a Mortgage Loan, shall be allocated in the following order of priority: (A) Such losses experienced by Pool 1 shall be allocated in the following order of priority: first, to the Class B-6 Certificates 1B6 Certificates, in reduction of their Class Principal Amount, until the Class B-6 Principal Balance Amount thereof has been reduced to zero; second, to the Class B-5 Certificates 1B5 Certificates, in reduction of their Class Principal Amount, until the Class B-5 Principal Balance Amount thereof has been reduced to zero; third, to the Class B-4 Certificates 1B4 Certificates, in reduction of their Class Principal Amount, until the Class B-4 Principal Balance Amount thereof has been reduced to zero; fourth, to the Class B-3 Certificates 1B3 Certificates, in reduction of their Class Principal Amount, until the Class B-3 Principal Balance Amount thereof has been reduced to zero; fifth, to the Class B-2 Certificates 1B2 Certificates, in reduction of their Class Principal Amount, until the Class B-2 Principal Balance Amount thereof has been reduced to zero; sixth, to the Class B-1 Certificates 1B1 Certificates, in reduction of their Class Principal Amount, until the Class B-1 Principal Balance Amount thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group Irelated Classes of Non-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO AP Senior Certificates, pro rata, based on in accordance with their respective Class Principal Amounts; and (B) Such losses experienced by Pool 2 shall be allocated in the Non-PO Fraction and the PO Fraction following order of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrentlypriority: first, to the Group II-A Certificates (other than Class 2B6 Certificates, in reduction of their Class Principal Amount, until the Class IIPrincipal Amount thereof has been reduced to zero; second, to the Class 2B5 Certificates, in reduction of their Class Principal Amount, until the Class Principal Amount thereof has been reduced to zero; third, to the Class 2B4 Certificates, in reduction of their Class Principal Amount, until the Class Principal Amount thereof has been reduced to zero; fourth, to the Class 2B3 Certificates, in reduction of their Class Principal Amount, until the Class Principal Amount thereof has been reduced to zero; fifth, to the Class 2B2 Certificates, in reduction of their Class Principal Amount, until the Class Principal Amount thereof has been reduced to zero; sixth, to the Class 2B1 Certificates, in reduction of their Class Principal Amount, until the Class Principal Amount thereof has been reduced to zero; and seventh, to the related Classes of Non-A-PO Certificates) and Class II-A-PO AP Senior Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's in accordance with their respective Class Principal BalanceAmounts. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product related Applicable Fraction of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with Loss in respect to any of a Mortgage Loan in Loan any Collateral Group I or Loan Group IIshall be allocated, respectivelypro rata, remaining after allocation to the Class Irelated Subordinate Certificates and related Non-A-PO AP Senior Certificate or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A basis of the Apportioned Principal Balances of the Classes of Subordinate Certificates and Class Principal Amounts of the Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B AP Senior Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a5.03(a) or Section 4.02(b(b) shall be allocated among the Certificates of such Class based in proportion to their respective Certificate Principal Amounts. Any allocation of Realized Losses pursuant to this paragraph (c) shall be accomplished by reducing the Certificate Principal Amounts of the related Certificates on the related Distribution Date in accordance with Section 5.03(d). Realized Losses allocated to the Accrual Certificates will be allocated on the basis of the lesser of their Percentage Interestsoriginal Class Principal Amount and their current Class Principal Amount. (d) In the event that there is a Recovery of an amount Realized Losses allocated in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated accordance with this Section 5.03 shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When loss was incurred and, in the Principal Balance case of a Class of Certificates has been reduced the principal portion thereof, after giving effect to zerodistributions made on such Distribution Date, such Class shall not be entitled to any share of such Recovery. In the event except that the aggregate amount of such Recovery exceeds the amount of such Recovery Realized Losses to be allocated to each outstanding the Class AP1 and Class AP2 Certificates on such Distribution Date will be taken into account in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received determining distributions in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, any related AP Deferred Amount for such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loandate. (e) The interest portion On each Distribution Date, the Subordinate Certificate Writedown Amount for Subordinate Certificates for such date shall effect a corresponding reduction in the Class Principal Amount of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each the lowest ranking Class of Group I-A Certificates or Group II-A outstanding Subordinate Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related which reduction shall occur on such Distribution Date. In addition, Date after the Class B Principal Balance has been reduced giving effect to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based distributions made on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. (b) All Realized Losses on the Mortgage Loans shall be allocated as follows: (i) first, to Excess Cash Flow in the amounts and priority as provided in Section 4.02; (ii) second, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; (iii) third, to the Class M-11 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (iv) fourth, to the Class M-10 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (v) fifth, to the Class M-9 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vi) sixth, to the Class M-8 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vii) seventh, to the Class M-7 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (viii) eighth, to the Class M-6 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (ix) ninth, to the Class M-5 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (x) tenth, to the Class M-4 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xi) eleventh, to the Class M-3 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xii) twelfth, to the Class M-2 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xiii) thirteenth, to the Class M-1 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; and (xiv) fourteenth, for losses on the Group I Loans to the Class A-I-1, Class A-I-2, Class A-I-3 and Class A-I-4 Certificates on a pro rata basis, based on their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date, until the aggregate Certificate Principal Balance of each such Class has been reduced to zero and for losses on the Group II Loans, to the Class A-II Certificates, until the Certificate Principal Balance thereof has been reduced to zero. (c) An allocation of a Realized Loss on a "pro rata basis" among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Accrued Certificate Interest thereon payable on such Distribution Date in the case of an interest portion of a Realized Loss. Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates until or Class M Certificates shall be made by reducing the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will shall be effected through the reduction made by operation of the applicable Class's Principal Balance. (b) With respect to any definition of "Accrued Certificate Interest" for each Class for such Distribution Date, . Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the priority of payment provisions of Section 4.02(c). Allocations of the principal portion of Excess Special Hazard Losses, Excess Fraud Debt Service Reductions shall be made by operation of the priority of payment provisions of Section 4.02(c). All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (d) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect allocated on each Distribution Date to the Class I-A-PO REMIC I Regular Interests, the REMIC II Regular Interests and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date REMIC III Regular Interests as provided in the month following the month in which such recovery is received. When the Principal Balance definition of a Class of Certificates has been reduced to zeroREMIC I Realized Losses, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisionsREMIC II Realized Losses and REMIC III Realized Losses, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loanrespectively. (e) The interest portion Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of Excess Special Hazard Lossesthis Section, Excess Fraud Losses the definition of Accrued Certificate Interest and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan the operation of Section 4.02(c) shall be deemed allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after to the Class B Principal Balance has SB Certificates. Realized Losses allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to REMIC IV Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued Certificate Interest on REMIC IV Regular Interest SB-IO. Realized Losses allocated to the Overcollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce the principal balance of REMIC IV Regular Interest SB-PO until such principal balance shall have been reduced to zero, the zero and thereafter to reduce accrued and unpaid interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group Ion REMIC IV Regular Interest SB-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest PercentagesIO. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. All Realized Losses on the Mortgage Loans shall be allocated as follows: first, to the Excess Cash Flow as part of the Principal Distribution Amount as provided in Section 4.02(c), to the extent of the Excess Cash Flow for such Distribution Date, second, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; third, to the Class M-10 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class M-9 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class M-8 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class M-7 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class M-6 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eleventh, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and twelfth, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; thirteenth, to the Class A-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and fourteenth, to the Class A-1 Certificates and Class A-2 Certificates on a pro rata basis, based on their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date, until the aggregate Certificate Principal Balance of each such Class has been reduced to zero. (b) Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates or Class M Certificates on any Distribution Date shall be made by reducing the Certificate Principal Balance thereof by the amount so allocated, which allocation shall be deemed to have occurred on such Distribution Date, until the Class B-6 Certificate Principal Balance thereof has been reduced to zero; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B M Certificates pursuant on any Distribution Date shall be made by operation of the definition of "Accrued Certificate Interest" for each Class for such Distribution Date. Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the priority of payment provisions of Section 4.02(c). All Realized Losses and all other losses allocated to Section 4.02(a) or Section 4.02(b) shall a Class of Certificates hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (c) Realized Losses shall be allocated among the REMIC I Regular Interests pursuant to the definition of REMIC I Realized Losses and the REMIC II Regular Interests pursuant to the definition of REMIC II Realized Losses. (d) In Realized Losses allocated to the event that there is a Recovery Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of an amount in respect this Section, the definition of principal Accrued Certificate Interest and the operation of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Section 4.02(c) shall be entitled to its share (with respect deemed allocated to the Class I-A-PO and Class II-A-PO SB Certificates, based on the PO Fraction of such Mortgage Loan and, with respect . Realized Losses allocated to the Class A SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to REMIC III Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (other than b) of this Section shall be deemed to reduce Accrued Certificate Interest on REMIC III Regular Interest SB-IO. Realized Losses allocated to the Class I-AOvercollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce the principal balance of REMIC III Regular Interest SB-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of until such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates has principal balance shall have been reduced to zero, such Class shall not be entitled zero and thereafter to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss reduce accrued and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account unpaid interest on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated LoanREMIC III Regular Interest SB-IO. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the principal Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. (1) All Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to on the Group I Mortgage Loans and Group II Mortgage Loans will shall be allocated as follows: first, to Group I Excess Cash Flow as provided in Section 4.02(c)(vii), to the Class B-6 Certificates until extent of the Class B-6 Principal Balance has been reduced to zeroGroup I Excess Cash Flow for such Distribution Date; second, to the Class B-5 Certificates Group II Excess Cash Flow as provided in Section 4.02(d)(ix), to the extent of the Group II Excess Cash Flow for such Distribution Date remaining after distributions pursuant to Section 4.02(d)(viii); third, in reduction of the Group I Overcollateralization Amount, until the Class B-5 Principal Balance earlier of: (1) such amount has been reduced to zero; third, to zero or (2) the aggregate Certificate Principal Balance of the Class B-4 A Certificates until and Class M Certificates equals the Class B-4 aggregate Stated Principal Balance has been of the Group I Loans and Group II Loans; fourth, in reduction of the Group II Overcollateralization Amount until such amount is reduced to zero; fourth, to meaning, that no additional Realized Losses will be allocated under any subsequent clause until the aggregate Certificate Principal Balance of the Class B-3 A Certificates until and Class M Certificates equals the Class B-3 aggregate Stated Principal Balance has been reduced to zeroof the Group I Loans and Group II Loans; fifth, to the Class B-2 Certificates M-I-4 Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates M-I-3 Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall be allocated among the Certificates of such Class based on their Percentage Interests. (d) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.;

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. All Realized Losses on the Mortgage Loans shall be allocated as follows: first, to the Excess Cash Flow as part of the Principal Distribution Amount as provided in Section 4.02(c), to the extent of the Excess Cash Flow for such Distribution Date; second, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; third, to the Class M-9 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class M-8 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class M-7 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class M-6 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eleventh, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and twelfth, for Realized Losses on the Group I Loans, to all of the Class I-A Certificates on a pro rata basis (with respect to the Grantor Trust Certificates, indirectly through the related Underlying Certificates), and for Realized Losses on the Group II Loans, to the Class II-A Certificates, until the Certificate Principal Balances thereof have been reduced to zero; provided, however, that (a) such losses otherwise allocable to the Class I-A1AU, Class I-A2AU and Class I-A5AU Certificates will be allocated first to the Class I-A1B Certificates until the Certificate Principal Balance of the Class I-A1B Certificates has been reduced to zero, and then to the Class I-A1AU, Class I-A2AU and Class I-A5AU Certificates (and, therefore, to the Grantor Trust Certificates indirectly through the related Underlying Certificates) on a pro rata basis, (b) such losses otherwise allocable to the Class I-A3A Certificates will be allocated first to the Class I-A3B Certificates until the Certificate Principal Balance of the Class I-A3B Certificates has been reduced to zero, and then to the Class I-A3A Certificates, and (c) such losses otherwise allocable to the Class I-A4A Certificates will be allocated first to the Class I-A4B Certificates until the Certificate Principal Balance of the Class I-A4B Certificates has been reduced to zero, and then to the Class I-A4A Certificates. (b) Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring to the Class A Certificates (with respect to Group I Mortgage Loans and Group II Mortgage Loans will the Grantor Trust Certificates, indirectly through the related Underlying Certificates) or Class M Certificates on any Distribution Date shall be allocated as follows: firstmade by reducing the Certificate Principal Balance thereof by the amount so allocated, which allocation shall be deemed to the Class B-6 Certificates have occurred on such Distribution Date, until the Class B-6 Certificate Principal Balance thereof has been reduced to zero; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced of the Mortgage Loans. Allocations of the interest portions of Realized Losses (other than any interest rate reduction resulting from a Servicing Modification) to zero; fourth, to the any Class B-3 of Class A Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO Grantor Trust Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected indirectly through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO related Underlying Certificates) or Group II-A Class M Certificates (other than on any Distribution Date shall be made by operation of the Class II-A-PO Certificates), respectively, and definition of "Accrued Certificate Interest" for each Class for such Distribution Date. Allocations of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance interest portion of a Realized Loss resulting from an interest rate reduction in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates connection with a Servicing Modification shall be allocated on made by operation of the subsequent Determination Date to the outstanding Classes priority of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as payment provisions of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Section 4.02(c). All Realized Losses and all other losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based in proportion to the Percentage Interests evidenced thereby. (c) All Realized Losses on their Percentage Intereststhe Mortgage Loans shall be allocated on each Distribution Date to the REMIC I Regular Interests as provided in the definition of REMIC I Realized Losses. (d) In A Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect allocated on each Distribution Date to the Class I-A-PO and Class REMIC II-A-PO Certificates, based on A Regular Interests as provided in the PO Fraction definition of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class REMIC II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such A Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated LoanLosses. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud A Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I on the Mortgage Loan or Group II Mortgage Loan Loans shall be allocated among (i) on each Class of Group I-A Certificates or Group Distribution Date to the REMIC II-A Certificates, B Regular Interests as applicable, and (ii) each Class provided in the definition of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group REMIC II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest PercentagesB Realized Losses. (f) Realized Losses allocated in accordance with to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of this Section, the definition of Accrued Certificate Interest and the operation of Section 4.02(c) shall be deemed allocated to the Class SB Certificates. Realized Losses allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to the REMIC III Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section 4.02 will shall be allocated deemed to reduce Accrued Certificate Interest on the Determination Date in the second month following the month in which such loss was incurred with respect REMIC III Regular Interest SB-IO. Realized Losses allocated to the preceding Distribution DateOvercollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce the principal balance of the REMIC III Regular Interest SB-PO until such principal balance shall have been reduced to zero and thereafter to reduce accrued and unpaid interest on the REMIC III Regular Interest SB-IO.

Allocation of Realized Losses. (a) With respect to any Distribution Date, the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 Certificates until the Class B-6 Principal Balance has been reduced to zero; second, to the Class B-5 Certificates until the Class B-5 Principal Balance has been reduced to zero; third, to the Class B-4 Certificates until the Class B-4 Principal Balance has been reduced to zero; fourth, to the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO Certificates) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, ; and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will be effected through the reduction of the applicable Class's Principal Balance. (b) With respect to any Distribution Date, the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall be allocated among the Certificates of such Class based on their Percentage Interests. (dc) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When the Principal Balance of a Class of Certificates has been reduced to zero, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after After the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on upon their Group I-A Interest Percentages and Group II-A Interest Percentages. (fd) Realized Losses allocated in accordance with this Section 4.02 will be allocated as follows: (i) Liquidated Loan Losses on Liquidated Loans for which the Liquidation Proceeds were received during, and Bankruptcy Losses incurred in a period corresponding to, an Unscheduled Principal Receipt Period for Full Unscheduled Principal Receipts that is a Mid-Month Receipt Period will be allocated on the Determination Date in the month following the month in which such Mid-Month Receipt Period ended and (ii) Liquidated Loan Losses on Liquidated Loans for which the Liquidation Proceeds were received during, and Bankruptcy Losses incurred in a period corresponding to, an Unscheduled Principal Receipt Period for Full Unscheduled Principal Receipts that is a Prior Month Receipt Period will be allocated on the Determination Date in the second month following the month in which is such loss was incurred with Prior Month Receipt Period. (e) With respect to the preceding any Distribution Date, the principal portion of Realized Losses and recoveries attributable to previously allocated Realized Losses allocated pursuant to this Section 4.02 will be allocated to each Uncertificated Lower-Tier Interest in an amount equal to the amount allocated to its respective Corresponding Upper-Tier Class or Classes as provided above. (f) With respect to any Distribution Date, the interest portion of Realized Losses allocated pursuant to this Section 4.02 will be allocated to each Uncertificated Lower-Tier Interest in the same relative proportions as interest is allocated to such Uncertificated Lower-Tier Interest.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. (b) All Realized Losses on the Mortgage Loans shall be allocated as follows: (i) first, to Excess Cash Flow in the amounts and priority as provided in Section 4.02; (ii) second, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; (iii) third, to the Class M-9 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (iv) fourth, to the Class M-8 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (v) fifth, to the Class M-7 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vi) sixth, to the Class M-6 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vii) seventh, to the Class M-5 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (viii) eighth, to the Class M-4 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (ix) ninth, to the Class M-3 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (x) tenth, to the Class M-2 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xi) eleventh, to the Class M-1 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; and (xii) twelfth, to the Class A-1, Class A-1A, Class A-1B, Class A-2 and Class A-3 Certificates on x xxx xxxx xxxxx, based on their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date, until the aggregate Certificate Principal Balance of each such Class has been reduced to zero; provided, however, that any Realized Loss that would otherwise be allocated to the Class A-1A Certificates will first be allocated to the Class A-1B Certificates until the Certificate Principal Balance of the Class A-1B Certificates has been reduced to zero. (c) An allocation of a Realized Loss on a "pro rata basis" among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Accrued Certificate Interest thereon payable on such Distribution Date in the case of an interest portion of a Realized Loss. Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates until or Class M Certificates shall be made by reducing the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will shall be effected through the reduction made by operation of the applicable Class's Principal Balance. (b) With respect to any definition of "Accrued Certificate Interest" for each Class for such Distribution Date, . Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the priority of payment provisions of Section 4.02(c). Allocations of the principal portion of Excess Special Hazard Losses, Excess Fraud Debt Service Reductions shall be made by operation of the priority of payment provisions of Section 4.02(c). All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (d) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect allocated on each Distribution Date to the Class I-A-PO REMIC I Regular Interests and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date REMIC II Regular Interests as provided in the month following the month in which such recovery is received. When the Principal Balance definition of a Class of Certificates has been reduced to zeroREMIC I Realized Losses and REMIC II Realized Losses, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loanrespectively. (e) The interest portion Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of Excess Special Hazard Lossesthis Section, Excess Fraud Losses the definition of Accrued Certificate Interest and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan the operation of Section 4.02(c) shall be deemed allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after to the Class B Principal Balance has SB Certificates. Realized Losses allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to the REMIC III Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued Certificate Interest on the REMIC III Regular Interest SB-IO. Realized Losses allocated to the Overcollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce the principal balance of the REMIC III Regular Interest SB-PO until such principal balance shall have been reduced to zero, the zero and thereafter to reduce accrued and unpaid interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution DateREMIC III Regular Interest SB-IO.

Allocation of Realized Losses. (a) With respect All Realized Losses on the Mortgage Loans allocated to any Distribution Date, the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will Regular Certificate shall be allocated by the Trustee on each Distribution Date as follows: first, to the Class B-6 Certificates until the Class B-6 Principal Balance has been reduced to zeroNet Monthly Excess Cashflow; second, to the Class B-5 Certificates C Certificates, until the Class B-5 Certificate Principal Balance thereof has been reduced to zero; third, to the Class B-4 Certificates B-3 Certificates, until the Class B-4 Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-3 Certificates B-2 Certificates, until the Class B-3 Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 Certificates B-1 Certificates, until the Class B-2 Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates M-9 Certificates, until the Class B-1 Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class M-8 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class M-7 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class M-6 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eleventh, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; twelfth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; thirteenth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fourteenth, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and seventhfifteenth, (i) with respect to such any remaining realized losses occurring with respect to on the Group I Mortgage Loans, concurrently, to the Group I-A Certificates (other than the Class I-A-PO A2 Certificates) and . All Realized Losses to be allocated to the Certificate Principal Balances on any Distribution Date shall be so allocated after the actual distributions to be made on such date as provided above. All references above to the Certificate Principal Balance of any Class I-A-PO of Certificates shall be to the Certificate Principal Balance of such Class immediately prior to the relevant Distribution Date, before reduction thereof by any Realized Losses, in each case to be allocated to such Class of Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectivelyDistribution Date. This Any allocation of Realized Losses will to a Class I-A2 Certificates, a Class B Certificate or a Mezzanine Certificate on any Distribution Date shall be effected through made by reducing the reduction Certificate Principal Balance thereof by the amount so allocated; any allocation of Realized Losses to a Class C Certificates shall be made first by reducing the amount otherwise payable in respect thereof pursuant to Section 4.01(d)(xxvi). No allocations of any Realized Losses shall be made to the Certificate Principal Balances of the applicable Class's Principal BalanceClass A Certificates (except for the Class I-A2 Certificates) or the Class P Certificates. (b) With respect to any Distribution Date, All Realized Losses on the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence Loans shall be allocated pro rata among by the Group I-A Certificates (other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and Trustee on each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Distribution Date to the outstanding Classes REMIC 1 Regular Interest LT1 and REMIC 1 Regular Interest LT1PF until the Uncertificated Principal Balance of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of each such Determination Date and any such loss allocated REMIC 1 Regular Interest has been reduced to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall be allocated among the Certificates of such Class based on their Percentage Interests. (d) In the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan andzero; provided however, with respect to the Class A Certificates (other than first Distribution Date, all Realized Losses on the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Initial Group I Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously Loans shall be allocated to such Class on REMIC 1 Regular Interest LT1 until the Distribution Date in the month following the month in which such recovery is received. When the Uncertificated Principal Balance of a Class of Certificates each such REMIC 1 Regular Interest has been reduced to zero, such Class and all Realized Losses on the Subsequent Group I Mortgage Loans shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with REMIC 1 Regular Interest LT1PF until the preceding provisions, each outstanding Class Uncertificated Principal Balance thereof has been reduced to zero. All Realized Losses on the Group II Mortgage Loans shall be entitled to its pro rata share (determined as described above) of such excess up allocated by the Trustee on each Distribution Date to the amount REMIC 1 Regular Interest LT2 and REMIC 1 Regular Interest LT2PF until the Uncertificated Principal Balance of any unrecovered Realized Loss previously allocated each such REMIC 1 Regular Interest has been reduced to such Class. Notwithstanding the foregoing provisionszero; provided however, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loanthe first Distribution Date, as the case may be, the all Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions Losses on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Initial Group II Mortgage Loan Loans shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned to REMIC 1 Regular Interest Percentage or Group II Apportioned Interest Percentage, as applicable for LT2 until the related Distribution Date. In addition, after the Class B Uncertificated Principal Balance of each such REMIC 1 Regular Interest has been reduced to zero, the interest portion of and all Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or on the Subsequent Group II Mortgage Loan will Loans shall be allocated among to REMIC 1 Regular Interest LT2PF until the outstanding Classes Uncertificated Principal Balance thereof has been reduced to zero. (c) All Realized Losses on the Mortgage Loans shall be deemed to have been allocated in the specified percentages, as follows: first, to Uncertificated Accrued Interest payable to the REMIC 2 Regular Interest LTAA and REMIC 2 Regular Interest LTZZ up to an aggregate amount equal to the REMIC 2 Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated Principal Balances of Group I-A Certificates REMIC 2 Regular Interest LTAA and Group II-A CertificatesREMIC 2 Regular Interest LTZZ up to an aggregate amount equal to the REMIC 2 Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTB3 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, based on their Group I-A until the Uncertificated Principal Balance of REMIC 2 Regular Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect LTB3 has been reduced to zero; fourth, to the preceding Distribution DateUncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTB2 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTB2 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTB1 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTB1 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM9 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM9 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM8 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM8 has been reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM7 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM7 has been reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM6 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM6 has been reduced to zero; tenth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM5 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM5 has been reduced to zero; eleventh, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM4 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM4 has been reduced to zero; twelfth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM3 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM3 has been reduced to zero; thirteenth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM2 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM2 has been reduced to zero; and fourteenth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM1 and REMIC 2 Regular Interest LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM1 has been reduced to zero.

Allocation of Realized Losses. (a) With respect Prior to any each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date OCCURS. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. (b) All Realized Losses on the Mortgage Loans shall be allocated as follows: (i) first, to Excess Cash Flow in the amounts and priority as provided in Section 4.02; (ii) second, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero; (iii) third, to the Class B Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (iv) fourth, to the Class M-9 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (v) fifth, to the Class M-8 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vi) sixth, to the Class M-7 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (vii) seventh, to the Class M-6 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (viii) eighth, to the Class M-5 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (ix) ninth, to the Class M-4 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (x) tenth, to the Class M-3 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xi) eleventh, to the Class M-2 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; (xii) twelfth, to the Class M-1 Certificates, until the aggregate Certificate Principal Balance thereof has been reduced to zero; and (xiii) thirteenth, to the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates on a pro rata basis, based on their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date, until the aggregate Certificate Principal Balance of each such Class has been reduced to zero. (c) An allocation of a Realized Loss on a "pro rata basis" among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Accrued Certificate Interest thereon payable on such Distribution Date in the case of an interest portion of a Realized Loss. Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions, Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans will be allocated as follows: first, to the Class B-6 A Certificates, Class M Certificates until or Class B Certificates shall be made by reducing the Class B-6 Certificate Principal Balance has been reduced thereof by the amount so allocated, which allocation shall be deemed to zerohave occurred on such Distribution Date; secondprovided, to that no such reduction shall reduce the Class B-5 Certificates until the Class B-5 aggregate Certificate Principal Balance has been reduced to zero; third, to of the Class B-4 Certificates until below the Class B-4 aggregate Stated Principal Balance has been reduced to zero; fourth, to of the Class B-3 Certificates until the Class B-3 Principal Balance has been reduced to zero; fifth, to the Class B-2 Certificates until the Class B-2 Principal Balance has been reduced to zero; sixth, to the Class B-1 Certificates until the Class B-1 Principal Balance has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrently, to . Allocations of the Group I-A Certificates interest portions of Realized Losses (other than the Class I-A-PO Certificatesany interest rate reduction resulting from a Servicing Modification) and Class I-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively, and (ii) with respect to such losses occurring with respect to Group II Mortgage Loans, concurrently, to the Group II-A Certificates (other than the Class II-A-PO Certificates) and Class II-A-PO Certificates, pro rata, based on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Realized Losses will shall be effected through the reduction made by operation of the applicable Class's Principal Balance. (b) With respect to any definition of "Accrued Certificate Interest" for each Class for such Distribution Date, . Allocations of the interest portion of a Realized Loss resulting from an interest rate reduction in connection with a Servicing Modification shall be made by operation of the priority of payment provisions of Section 4.02(c). Allocations of the principal portion of Excess Special Hazard Losses, Excess Fraud Debt Service Reductions shall be made by operation of the priority of payment provisions of Section 4.02(c). All Realized Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class I-A-PO or Class II-A-PO Certificates, respectively, will equal the product of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with respect to any Mortgage Loan in Loan Group I or Loan Group II, respectively, remaining after allocation to the Class I-A-PO or Class II-A-PO Certificates, as applicable, in accordance with the preceding sentence shall be allocated pro rata among the Group I-A Certificates (all other than the Class I-A-PO Certificates) or Group II-A Certificates (other than the Class II-A-PO Certificates), respectively, and each Class of Class B Certificates based on the Group I-A Non-PO Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group I-A Certificates (other than the Class I-A-PO Certificates) in accordance with the Group I-A Loss Percentages as of such Determination Date and any such loss allocated to the Group II-A Certificates shall be allocated on the subsequent Determination Date to the outstanding Classes of Group II-A Certificates (other than the Class II-A-PO Certificates) in accordance with the Group II-A Loss Percentages as of such Determination Date. (c) Any Realized Losses losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a) or Section 4.02(b) shall hereunder will be allocated among the Certificates of such Class based on their in proportion to the Percentage InterestsInterests evidenced thereby. (d) In All Realized Losses on the event that there is a Recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group which had previously been allocated as a Realized Loss to any Classes of Class A Certificates or any Classes of Class B Certificates, each outstanding Class to which such Realized Loss had previously been allocated Loans shall be entitled to its share (with respect allocated on each Distribution Date to the Class I-A-PO REMIC I Regular Interests and Class II-A-PO Certificates, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date REMIC II Regular Interests as provided in the month following the month in which such recovery is received. When the Principal Balance definition of a Class of Certificates has been reduced to zeroREMIC I Realized Losses and REMIC II Realized Losses, such Class shall not be entitled to any share of such Recovery. In the event that the amount of such Recovery exceeds the amount of such Recovery allocated to each outstanding Class in accordance with the preceding provisions, each outstanding Class shall be entitled to its pro rata share (determined as described above) of such excess up to the amount of any unrecovered Realized Loss previously allocated to such Class. Notwithstanding the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization of such loss and (i) is the result of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loanrespectively. (e) The interest portion Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of Excess Special Hazard Lossesthis Section, Excess Fraud Losses the definition of Accrued Certificate Interest and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan the operation of Section 4.02(c) shall be deemed allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after to the Class B Principal Balance has SB Certificates. Realized Losses allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest portion, be allocated to the REMIC III Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued Certificate Interest on the REMIC III Regular Interest SB-IO. Realized Losses allocated to the Overcollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce the principal balance of the REMIC III Regular Interest SB-PO until such principal balance shall have been reduced to zero, the zero and thereafter to reduce accrued and unpaid interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution DateREMIC III Regular Interest SB-IO.

Allocation of Realized Losses. (a) With respect to On any Distribution Date, (x) the applicable AP Percentage of the principal portion of each Realized Losses Loss (other than Debt Service Reductions, any Excess Special Hazard Losses, Excess Fraud Losses Loss) in respect of a Mortgage Loan in Pool 1 and Excess Bankruptcy Losses) occurring with respect to Group I Mortgage Loans and Group II Mortgage Loans Pool 3 will be allocated as followsto the related Class of Principal Only Certificates or Principal Only Components until the Class Principal Amount or Component Principal Amount thereof has been reduced to zero; and (y) the applicable Non-AP Percentage (or, in the case of Pool 3, 100%) of the principal portion of each Realized Loss (other than any Excess Loss) in respect of a Mortgage Loan in each Mortgage Pool shall be allocated in the following order of priority: first, to the related Component of the Class B-6 Certificates B6 Certificates, until the Class B-6 Component Principal Balance Amount thereof has been reduced to zero; second, to the related Component of the Class B-5 Certificates B5 Certificates, until the Class B-5 Component Principal Balance Amount thereof has been reduced to zero; third, to the related Component of the Class B-4 Certificates B4 Certificates, until the Class B-4 Component Principal Balance Amount thereof has been reduced to zero; fourth, to the related Component of the Class B-3 Certificates B3 Certificates, until the Class B-3 Component Principal Balance Amount thereof has been reduced to zero; fifth; (1) Component, to the Class B-2 Certificates in that order, until the Class B-2 Component Principal Balance Amount of each such Component has been reduced to zero; sixth, (ii) Pool 2, to the Class B-1 Certificates B-2(2) and Class B1(2) Certificates, in that order, until the Class B-1 Principal Balance Amount of each such Class has been reduced to zero, and (iii) Pool 3, to the B2(1-3)(3) and the B1(1-3)(3) Components, in that order until the Component Principal Amount of each such Component has been reduced to zero; and seventh, (i) with respect to such losses occurring with respect to Group I Mortgage Loans, concurrentlysixth, to the Group I-A Classes of Senior Certificates or Components (other than the Class I-A-PO Certificatesrelated Principal Only Certificates or Principal Only Components) and Class I-A-PO Certificatesof the related Certificate Group, pro rata, based on in accordance with their Class Principal Amounts or Component Principal Amounts; provided, however, that (i) all losses that would otherwise be allocable to the NonClass 2-PO Fraction and A9 Certificates will be allocated instead to the PO Fraction of such Mortgage LoansClass 2-A12 Certificates, respectively, and until the Class Principal Amount thereof has been reduced to zero; (ii) with respect to such all losses occurring with respect to Group II Mortgage Loans, concurrently, that would otherwise be allocable to the Group IIClass 2-A A8 Certificates will be allocated instead to the Class 2-A13 Certificates, until the Class Principal Amount thereof has been reduced to zero; and (iii) all losses that would otherwise be allocable to the Class 3-A3 Certificates will be allocated instead to the Class 3-A5 Certificates until the Class Principal Amount thereof has been reduced to zero; and provided, further, that any such loss allocated to any Class of Accrual Certificates (other than or any Accrual Component) shall be allocated (subject to Section 5.03(c)) on the basis of the lesser of (x) the Class II-A-PO CertificatesPrincipal Amount (or Component Principal Amount) thereof immediately prior to the applicable Distribution Date and (y) the Class II-A-PO Certificates, pro rata, based Principal Amount (or Component Principal Amount) thereof on the Non-PO Fraction and the PO Fraction of such Mortgage Loans, respectively. This allocation of Closing Date (as reduced by any Realized Losses will be effected through the reduction of the applicable Class's Principal Balancepreviously allocated thereto). (b) With respect to any Distribution Date, (i) the principal portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan allocable to the Class Iapplicable Non-A-PO or Class II-A-PO Certificates, respectively, will equal the product AP Percentage of the amount of any such principal loss and the PO Fraction for such Mortgage Loan. The principal portion of any Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses with Loss (other than a Debt Service Reduction) in respect to any of a Mortgage Loan in Loan Group I or Loan Group IIPool 1 shall be allocated, respectivelypro rata, remaining after allocation to the Non-AP Senior Certificates of Certificate Group 1 based on the respective Class IPrincipal Amounts thereof, and to the B1(1-A3)(1), B2(1-PO or Class II3)(1), B3(1), B4(1), B5(1) and B6 (1) Components on the basis of the Component Principal Balances thereof; (ii) the applicable Non-A-PO Certificates, as applicable, in accordance with AP Percentage of the preceding sentence shall be allocated pro rata among the Group I-A Certificates principal portion of any Excess Loss (other than a Debt Service Reduction) in respect of a Mortgage Loan in Pool 2 shall be allocated, pro rata, to the Non-AP Senior Certificates of Certificate Group 2 and the Class I-A-PO CertificatesB1(2) or Group II-A Certificates (other than the and Class II-A-PO Certificates), respectively, and each Class of Class B B2(2) Certificates based on the Group I-A Non-PO respective Class Principal Balance or Group II-A Non-PO Principal Balance in the case of such Group I-A Certificates or Group II-A Certificates Amounts thereof, and the Group I Apportioned Principal Balance or Group II Apportioned Principal Balance in the case of each Class of Class B Certificates, respectively. Any such loss allocated to the Group I-A Certificates shall be allocated B3(2), B4(2), B5(2) and B6(2) Components on the subsequent Determination Date to basis of their Component Principal Balances; and (iii) the outstanding Classes principal portion of Group I-A Certificates any Excess Loss (other than the Class I-A-PO Certificatesa Debt Service Reduction) in accordance with respect of a Mortgage Loan in Pool 3 shall be allocated, pro rata, to the Non-AP Senior Certificates of Certificate Group I3 based on the respective Class Principal Amounts thereof, and to the B1(1-A Loss Percentages as 3)(3), B2(1-3)(3), B3(3), B4(3), B5(3) and B6(3) Components on the basis of such Determination Date and their Component Principal Balances; provided, that any such loss allocated to the Group II-A any Class of Accrual Certificates (and any Accrual Component) shall be allocated (subject to Section 5.03(c)) on the subsequent Determination Date basis of the lesser of (x) the Class Principal Amount (or Component Principal Amount) thereof immediately prior to the outstanding Classes applicable Distribution Date and (y) the Class Principal Amount (or Component Principal Amount) thereof on the Closing Date (as reduced by any Realized Losses previously allocated thereto) and provided further that (i) any such loss in respect of Group IIa Mortgage Loan in Pool 2 that would otherwise be allocable to the Class 2-A A9 Certificates will be allocated instead to the Class 2-A12 Certificates, until the Class Principal Amount thereof has been reduced to zero; (ii) any such loss in respect of a Mortgage Loan in Pool 2 that would otherwise be allocable to the Class 2-A8 Certificates will be allocated instead to the Class 2-A13 Certificates, until the Class Principal Amount thereof has been reduced to zero; and (iii) any such loss in respect of a Mortgage Loan in Pool 3 that would otherwise be allocable to the Class 3-A3 Certificates will be allocated instead to the Class 3-A5 Certificates until the Class Principal Amount thereof has been reduced to zero. The applicable AP Percentage of the principal portion of any Excess Loss (other than a Debt Service Reduction) on a Mortgage Loan in Pool 1 or Pool 2 for any Distribution Date shall be allocated to the related Class IIof Class AP Certificates (or, in the case of Pool 2, the 2-A-PO CertificatesA9(5) in accordance with the Group II-A Loss Percentages as of such Determination DateComponent). (c) Any Realized Losses allocated to a Class of Class A Certificates or Class B Certificates pursuant to Section 4.02(a5.03(a) or Section 4.02(b(b) shall be allocated among the Certificates of such Class based in proportion to their respective Certificate Principal Amounts. In addition, any Realized Losses allocated to any Class of Component Certificates on a Distribution Date shall be allocated in reduction of the Component Principal Amounts of the related Components (other than any Notional Component) in proportion to their Percentage Interestsrespective Component Principal Amounts immediately prior to such Distribution Date. Any allocation of Realized Losses pursuant to this paragraph (c) shall be accomplished by reducing the Certificate Principal Amount (or, in the case of any Component, the Component Principal Amount) of the related Certificates (or Components) on the related Distribution Date in accordance with Section 5.03(d). (d) Realized Losses allocated in accordance with this Section 5.03 shall be allocated on the Distribution Date in the month following the month in which such loss was incurred and, in the case of the principal portion thereof, after giving effect to distributions made on such Distribution Date, except that the aggregate amount of Realized Losses to be allocated to the Principal Only Certificates on such Distribution Date will be taken into account in determining distributions in respect of any related Class AP Deferred Amount for such date. (e) On each Distribution Date, any Component Writedown Amount for such date shall effect a corresponding reduction in the Component Principal Amount of the lowest ranking related Component, and any Class Writedown Amount for such date shall effect a corresponding reduction in the Class Principal Amount of, first, the Class B2(2) Certificates, until the Class Principal Amount thereof has been reduced to zero and, second, to the Class B1(2) Certificates, until the Class Principal Amount thereof has been reduced to zero. In each case, such reductions shall occur on such Distribution Date after giving effect to distributions made on such Distribution Date. (f) In the event that there is a Recovery recovery of an amount in respect of principal of a Mortgage Loan of a Loan Group Loan, which amount had previously been allocated as a Realized Loss to any one or more Classes or Components of Class A Certificates or any Classes of Class B Certificates, each outstanding Class or Component to which any portion of such Realized Loss had previously been allocated shall be entitled to its share (with respect to the Class I-A-PO and Class II-A-PO Certificatesreceive, based on the PO Fraction of such Mortgage Loan and, with respect to the Class A Certificates (other than the Class I-A-PO and Class II-A-PO Certificates) and Class B Certificates, based on their pro rata share of the Non-PO Fraction of such Mortgage Loan) of such Recovery up to the amount of such Realized Loss previously allocated to such Class on the Distribution Date in the month following the month in which such recovery is received. When , its pro rata share (based on the Class Principal Balance Amount thereof) of a Class such recovery, up to the amount of Certificates has been reduced the portion of such Realized Loss previously allocated to zero, such Class shall not be entitled to any share of such Recoveryor Component. In the event that the total amount of such Recovery recovery exceeds the amount of such Recovery Realized Loss allocated to each the outstanding Class Classes or Components in accordance with the preceding provisions, each outstanding Class of Certificates or Component shall be entitled to receive its pro rata share (determined as described above) of the amount of such excess excess, up to the amount of any unrecovered Realized Loss previously allocated to such ClassClass or Component. Notwithstanding Any such recovery allocated to a Class of Certificates shall not further reduce the foregoing provisions, but subject to the following proviso, if such Recovery occurs within two years of the realization Certificate Principal Amount or Component Principal Amount of such loss and (i) is the result Certificate. Any such amounts not otherwise allocated to any Class of an event that would have given rise to the repurchase of the related Mortgage Loan by the Seller Certificates pursuant to Section 2.02 or 2.03, or (ii) represents in whole or part funds which the applicable Servicer had received in respect of a Liquidated Loan but failed to remit to the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loan, such Recovery may, at the sole discretion of the Master Servicer, this subsection shall be treated as a repurchase or an Unscheduled Principal Receipt with respect to such Mortgage Loan, as the case may be, the Realized Loss previously recognized may be reversed and treated Prepayments for all subsequent purposes as if it had never occurred and the Master Servicer may make such adjustments to interest or principal distributions on the Certificates and to the principal balances of the Certificates as the Master Servicer in its good faith judgment and sole discretion deems necessary or desirable to effectuate the reversal of the Realized Loss and the treatment of such amount as a repurchase or as an Unscheduled Principal Receipt, as the case may be; provided that such actions do not result in the aggregate distributions made in respect of each Class of Certificates whose principal balances were previously reduced as a result of such Realized Loss being less than such Class would have received if such Recovery had been deposited in the Certificate Account on or prior to the Business Day preceding the Distribution Date following the Applicable Unscheduled Principal Receipt Period in which the Mortgage Loan became a Liquidated Loanthis Agreement. (e) The interest portion of Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan shall be allocated among (i) each Class of Group I-A Certificates or Group II-A Certificates, as applicable, and (ii) each Class of Class B Certificates, pro rata based upon each Class's Group I Apportioned Interest Percentage or Group II Apportioned Interest Percentage, as applicable for the related Distribution Date. In addition, after the Class B Principal Balance has been reduced to zero, the interest portion of Realized Losses (other than Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses) occurring with respect to any Group I Mortgage Loan or Group II Mortgage Loan will be allocated among the outstanding Classes of Group I-A Certificates and Group II-A Certificates, respectively, based on their Group I-A Interest Percentages and Group II-A Interest Percentages. (f) Realized Losses allocated in accordance with this Section 4.02 will be allocated on the Determination Date in the second month following the month in which such loss was incurred with respect to the preceding Distribution Date.