Common use of Realization Upon Defaulted Loans Clause in Contracts

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R CertificateholderCertificateholders, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is not in compliance with applicable environmental laws, and or there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would not be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent The Servicer shall use its best efforts, consistent with Accepted Servicing Practices and the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, procedures that the Servicer shall would use in servicing loans for its own account, to foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the such Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.211.01. In connection with The Servicer shall use its best efforts to realize upon defaulted Loans in such foreclosure or a manner as will maximize the receipt of principal and interest by the Purchaser, taking into account, among other conversionthings, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activitiestiming of foreclosure proceedings. The foregoing is subject to the proviso that provisions that, in any case in which a Mortgaged Property shall have suffered damage, the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged toward the restoration of such property unless it shall determine in its discretion (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds proceeds of liquidation of the related Loan to Certificateholders Purchaser after reimbursement to itself for such expenses expenses, and (ii) that such expenses will be recoverable to it by the Servicer through Insurance Proceeds or Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to related Mortgaged Property, as contemplated in Section 3.3)11.05. Any gain on foreclosure or other conversion of a Liquidated In the event that any payment due under any Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary paid when the same becomes due and payable, or in the event the Borrower fails to make distributions to perform any other covenant or obligation under the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs Loan and expenses incurred by it in such failure continues beyond any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loanapplicable grace period, the Servicer shall provide take such action as it shall deem to be in the best interest of the Purchaser. In the event any payment due under any Loan is not paid when the same becomes due and payable, or in the event the Borrower fails to perform any other covenant or obligation under the Loan, and such failure continues beyond any applicable grace period, the Servicer will proceed diligently to collect all payments due and shall take such action, including commencing foreclosure, as it shall reasonably deem to be in the best interests of the Purchaser in a manner consistent with Accepted Servicing Practices. Should any Loan remain delinquent for a period of 90 days, the Servicer shall use Accepted Servicing Practices and refer the file to foreclosure by the 120th day of delinquency. Notification of foreclosure proceedings shall be reported to the Trustee Purchaser. Should a statement of accounting for foreclosure sale be imminent, the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired Servicer shall obtain a value and issue bidding instructions in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specifyaccordance with Accepted Servicing Practices. (b) Prior Notwithstanding the foregoing provisions of this Section 11.03, with respect to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders Servicer has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, the Servicer shall not either (i) obtain title to such Mortgaged Property as a deed result of or in lieu of foreclosure at or otherwise, or (ii) otherwise acquire possession of, or take any other action, with respect to, such Mortgaged Property if, as a price equal result of any such action, the Purchaser would be considered to hold title to, to be a mortgagee-in-possession of, or to be an owner or operator of such Mortgaged Property within the outstanding Principal Balance meaning of the Loan plus accrued interest at Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed Servicer has also previously determined, based on its reasonable judgment and a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a prudent report prepared by an Independent a Person who regularly conducts environmental audits that the using customary industry standards, that: (1) such Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental lawslaws or, and if not, that it would be in the best economic interest of the Purchaser to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and (2) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum petroleum-based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such action could be required, that it would be in the best economic interest of the Trust Fund Purchaser to acquire title take such actions with respect to such the affected Mortgaged Property and further Property. The cost of the environmental audit report contemplated by this Section 11.03 shall be advanced by the Servicer, subject to the Servicer’s right to be reimbursed therefor from the Custodial Account as provided in Section 11.05(vii). If the Servicer determines, as described above, that it is in the best economic interest of the Purchaser to take such actions as would be are necessary and appropriate to effect bring any such Mortgaged Property into compliance and/or respond with applicable environmental laws, or to take such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard action with respect to a Loan for which foreclosure proceedings are contemplatedthe containment, the Servicer will not conduct clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials affecting any such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve take such REO Property in the same manner and to such extent action as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer it deems to be in the best economic interest of the Servicer and Purchaser. The cost of any such compliance, containment, cleanup or remediation shall be advanced by the Certificateholders for the period prior Servicer, subject to the sale of such REO Property. All proceeds Servicer’s right to be reimbursed therefor from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to as provided in Section 3.3(b)(ix1 l.05(vii). (dc) In Proceeds received in connection with any Final Recovery Determination, as well as any recovery resulting from a partial collection of Insurance Proceeds or Liquidation Proceeds in respect of any Loan, will be applied in the event that title following order of priority: first, to reimburse the Servicer for any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosurerelated unreimbursed Servicing Advances, pursuant to Section 11.05(iii); second, to accrued and unpaid interest on the deed or certificate of sale shall be issued Loan, to the Trusteedate of the Final Recovery Determination, or to its nominee the Due Date prior to the Distribution Date on behalf which such amounts are to be distributed if not in connection with a Final Recovery Determination; and third, as a recovery of Certificateholders. Notwithstanding any such acquisition of title and cancellation principal of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent The Seller shall use its best efforts, consistent with Accepted Servicing Practices and the procedures that the Seller would use in servicing standard set forth in Section 3.1 and with a view loans for its own account, to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the such Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.211.01. In connection with The Seller shall use its best efforts to realize upon defaulted Loans in such foreclosure or a manner as will maximize the receipt of principal and interest by the Purchaser, taking into account, among other conversionthings, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activitiestiming of foreclosure proceedings. The foregoing is subject to the proviso that provisions that, in any case in which a Mortgaged Property or Cooperative Apartment shall have suffered damage, the Servicer Seller shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged toward the restoration of such property unless it shall determine in its discretion (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds proceeds of liquidation of the related Loan to Certificateholders Purchaser after reimbursement to itself for such expenses expenses, and (ii) that such expenses will be recoverable to it by the Seller through Insurance Proceeds or Liquidation Proceeds (respecting which from the related Mortgaged Property or Cooperative Apartment, as contemplated in Section 11.05. In the event that any payment due under any Loan is not paid when the same becomes due and payable, or in the event the Borrower fails to perform any other covenant or obligation under the Loan and such failure continues beyond any applicable grace period, the Seller shall take such action as it shall have priority deem to be in the best interest of the Purchaser. In the event any payment due under any Loan is not paid when the same becomes due and payable, or in the event the Borrower fails to perform any other covenant or obligation under the Loan, and such failure continues beyond any applicable grace period, the Seller will proceed diligently to collect all payments due and shall take such action, including commencing foreclosure, as it shall reasonably deem to be in the best interests of the Purchaser in a manner consistent with Accepted Servicing Practices. Should any Loan remain delinquent for purposes a period of withdrawal from 90 days, the Custodial Account for P&I pursuant Seller shall use Accepted Servicing Practices and refer the file to Section 3.3)foreclosure by the 120th day of delinquency. Any gain on Notification of foreclosure or other conversion of a Liquidated Loan proceedings shall be distributed reported to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of CertificatesPurchaser. The Servicer shall Should a foreclosure sale be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loanimminent, the Servicer Seller shall provide to the Trustee obtain a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired value and issue bidding instructions in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specifyaccordance with Accepted Servicing Practices. (b) Prior Notwithstanding the foregoing provisions of this Section 11.03, with respect to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders Seller has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property or Project, the Seller shall not either (i) obtain title to such Mortgaged Property or the related Cooperative Apartment as a deed result of or in lieu of foreclosure at or otherwise, or (ii) otherwise acquire possession of, or take any other action, with respect to, such Mortgaged Property or the related Cooperative Apartment if, as a price equal result of any such action, the Purchaser would be considered to hold title to, to be a mortgagee-in-possession of, or to be an owner or operator of such Mortgaged Property within the outstanding Principal Balance meaning of the Loan plus accrued interest at Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed Seller has also previously determined, based on its reasonable judgment and a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a prudent report prepared by an Independent a Person who regularly conducts environmental audits that the using customary industry standards, that: (1) such Mortgaged Property for which foreclosure proceedings are contemplated or Project is in compliance with applicable environmental lawslaws or, and if not, that it would be in the best economic interest of the Purchaser to take such actions as are necessary to bring the Mortgaged Property or Project into compliance therewith; and (2) there are no circumstances present at such Mortgaged Property or Project relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum petroleum-based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such action could be required, that it would be in the best economic interest of the Trust Fund Purchaser to acquire title take such actions with respect to such the affected Mortgaged Property and further or Project. The cost of the environmental audit report contemplated by this Section 11.03 shall be advanced by the Seller, subject to the Seller’s right to be reimbursed therefor from the Custodial Account as provided in Section 11.05(vii). If the Seller determines, as described above, that it is in the best economic interest of the Purchaser to take such actions as would be are necessary and appropriate to effect bring any such Mortgaged Property or Project into compliance and/or respond with applicable environmental laws, or to take such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard action with respect to a Loan for which foreclosure proceedings are contemplatedthe containment, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale clean-up or remediation of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loanhazardous substances, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstandinghazardous materials, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the samehazardous wastes, or petroleum-based materials affecting any part thereofsuch Mortgaged Property or Project, then the Seller shall take such action as the Servicer it deems to be in the best economic interest of the Servicer and Purchaser. The cost of any such compliance, containment, cleanup or remediation shall be advanced by the Certificateholders for the period prior Seller, subject to the sale of such REO Property. All proceeds Seller’s right to be reimbursed therefor from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to as provided in Section 3.3(b)(ix1 l.05(vii). (dc) In Proceeds received in connection with any Final Recovery Determination, as well as any recovery resulting from a partial collection of Insurance Proceeds or Liquidation Proceeds in respect of any Loan, will be applied in the event that title following order of priority: first, to reimburse the Seller for any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosurerelated unreimbursed Servicing Advances, pursuant to Section 11.05(iii); second, to accrued and unpaid interest on the deed or certificate of sale shall be issued Loan, to the Trusteedate of the Final Recovery Determination, or to its nominee the Due Date prior to the Distribution Date on behalf which such amounts are to be distributed if not in connection with a Final Recovery Determination; and third, as a recovery of Certificateholders. Notwithstanding any such acquisition of title and cancellation principal of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 30 days or more delinquent and which delinquent; provided that such repurchase shall only be made if (i) the Servicer determines in good faith would otherwise become subject has a contractual right to foreclosure proceedings or any require the third party seller of such delinquent Loan as to which the Mortgagor tenders repurchase such Loan, (ii) such repurchase is made to facilitate a deed in lieu of foreclosure repurchase by such third party seller and (iii) such repurchase is made at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due DatePurchase Price. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix3.2(b)(viii). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC REMICs at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of offered Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with The Loan Participation Servicer shall use reasonable efforts to realize upon Defaulted Loans in such manner as in the servicing standard set forth in Section 3.1 Loan Participation Servicer’s judgment will maximize the receipt of principal and with a view to the best economic interest by all interest holders of the Trust FundParticipated Loan, including the Loan Participation Holder. For each Participated Loan as to which the Loan Participation Holder’s Pro Rata Share exceeds fifty percent (50%): (i) the Loan Participation Servicer shall foreclose upon use reasonable efforts to work out a troubled Participated Loan before proposing foreclosure, a deed in lieu of foreclosure, a pre-foreclosure sale, or otherwise liquidating Collateral; (ii) the Loan Participation Servicer shall use reasonable efforts to liquidate or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the Mortgaged Properties Collateral securing such of the Participated Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure payments; (iii) in any case in which Collateral shall have suffered material damage and in the opinion of the Loan Participation Servicer there are insufficient funds or no reasonable likelihood that there will be sufficient funds received in the future from insurance proceeds, any federal or state governmental agency or any other conversionsources, the Loan Participation Servicer shall follow such practices and procedures as promptly notify the Loan Participation Holder to allow it shall deem necessary the opportunity to expend funds toward restoration; and (iv) the decision of the Loan Participation Servicer to foreclose on a Defaulted Loan or advisable and as otherwise liquidate Collateral shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders written consent of the other Classes Loan Participation Holder as set forth in the applicable Certificate of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specifyParticipation. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as Any proceeds from liquidated Collateral to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal Loan Participation Holder is entitled will be paid first, to the outstanding Principal Balance of Loan Participation Servicer for previously unreimbursed Expenses under the Participation Agreement; second, to the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment Participation Servicer, for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal payment of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard unpaid Servicing Fee with respect to a the Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident Participation relating to such real property) in connection with a default or imminent default of a LoanCollateral; third, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that Loan Participation Holder in respect of accrued interest; and fourth, to the holding by the Trust Fund Loan Participation Holder as a recovery of principal of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix)Loan Participation. (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 30 days or more delinquent and which delinquent; provided that such repurchase shall only be made if (i) the Servicer determines in good faith would otherwise become subject has a contractual right to foreclosure proceedings or any require the third party seller of such delinquent Loan as to which the Mortgagor tenders repurchase such Loan, (ii) such repurchase is made to facilitate a deed in lieu of foreclosure repurchase by such third party seller and (iii) such repurchase is made at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due DatePurchase Price. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and or REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix3.2(b)(viii). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC REMICs at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the The Master Servicer shall use reasonable efforts to realize upon Defaulted Loans in such manner as in the Master Servicer’s judgment will maximize the receipt of principal and interest by the Purchaser. The Master Servicer is obligated to make every effort it deems reasonable to work out a troubled Qualified Loan before proposing foreclosure, a deed in lieu of foreclosure, a pre-foreclosure sale or other remedial action. The Master Servicer shall use reasonable efforts to foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the Mortgaged Properties securing such of the Qualified Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activitiespayments. The foregoing is subject to the proviso that provisions that, in any case in which Mortgaged Property shall have suffered damage, the Master Servicer shall not be required to expend its own funds in connection with any foreclosure or toward the restoration of such Mortgaged Property. The Master Servicer shall promptly notify Xxxxxx Mac when a Mortgaged Property suffers material damage to restore any damaged property unless it shall determine (i) that such foreclosure and/or allow Xxxxxx Mac the opportunity to expend funds toward restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that that: (1) the Master Servicer has notice of such gain is not necessary to make distributions to damage; and (2) in the Certificateholders opinion of the Master Servicer there are insufficient funds or no reasonable likelihood that there will be sufficient funds received in the future from insurance proceeds, any federal or state governmental agency or any other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specifysources. (b) Prior The decision of the Master Servicer to any such foreclosure, the Servicer may, at its option, repurchase any foreclose on a Defaulted Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become shall be subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu written consent of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b)Xxxxxx Mac. (c) The Trust Fund shall not acquire Any proceeds to which the Purchaser is entitled as a mortgagee under a Mortgage securing any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental lawsQualified Loan will be paid, and there are no circumstances present at such Mortgaged Property relating subject to the usefollowing order of priority: first, management or disposal of to the Master Servicer to reimburse the Master Servicer for any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property related unreimbursed Servicing Advances and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard Servicing Fees with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Qualified Loan; and second, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund Purchaser as a recovery of principal of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix)Qualified Loan. (d) In the event that title that, as a result of or in connection with the exercise of remedies with respect to any Mortgaged Property is acquired in foreclosure a Qualified Loan, Xxxxxx Mac becomes the owner of real estate or by deed in lieu of foreclosureother property, the deed Master Servicer will immediately commence appropriate procedures to liquidate such real estate or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold other property if so requested by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effectXxxxxx Mac. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 30 days or more delinquent and which delinquent; provided that such repurchase shall only be made if (i) the Servicer determines in good faith would otherwise become subject has a contractual right to foreclosure proceedings or any require the third party seller of such delinquent Loan as to which the Mortgagor tenders repurchase such Loan, (ii) such repurchase is made to facilitate a deed in lieu of foreclosure repurchase by such third party seller and (iii) such repurchase is made at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due DatePurchase Price. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either any of REMIC I I, REMIC II or REMIC II III to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I I, REMIC II and REMIC II III to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix3.3(b)(viii). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either any of REMIC I I, REMIC II or REMIC II III of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the The Master Servicer shall use reasonable efforts to realize upon Defaulted Loans in such manner as in the Master Servicer's judgment will maximize the receipt of principal and interest by the Purchaser. The Master Servicer is obligated to make every effort it deems reasonable to work out a troubled Qualified Loan before proposing foreclosure, a deed in lieu of foreclosure, a pre-foreclosure sale or other remedial action. The Master Servicer shall use reasonable efforts to foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the Mortgaged Properties securing such of the Qualified Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activitiespayments. The foregoing is subject to the proviso that provisions that, in any case in which Mortgaged Property shall have suffered damage, the Master Servicer shall not be required to expend its own funds in connection with any foreclosure or toward the restoration of such Mortgaged Property. The Master Servicer shall promptly notify Fxxxxx Mac when a Mortgaged Property suffers material damage to restore any damaged property unless it shall determine (i) that such foreclosure and/or allow Fxxxxx Mac the opportunity to expend funds toward restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that that: (1) the Master Servicer has notice of such gain is not necessary to make distributions to damage; and (2) in the Certificateholders opinion of the Master Servicer there are insufficient funds or no reasonable likelihood that there will be sufficient funds received in the future from insurance proceeds, any federal or state governmental agency or any other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specifysources. (b) Prior The decision of the Master Servicer to any such foreclosure, the Servicer may, at its option, repurchase any foreclose on a Defaulted Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become shall be subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu written consent of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b)Fxxxxx Mac. (c) The Trust Fund shall not acquire Any proceeds to which the Purchaser is entitled as a mortgagee under a Mortgage securing any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental lawsQualified Loan will be paid, and there are no circumstances present at such Mortgaged Property relating subject to the usefollowing order of priority: first, management or disposal of to the Master Servicer to reimburse the Master Servicer for any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property related unreimbursed Servicing Advances and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard Servicing Fees with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Qualified Loan; and second, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund Purchaser as a recovery of principal of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix)Qualified Loan. (d) In the event that title that, as a result of or in connection with the exercise of remedies with respect to any Mortgaged Property is acquired in foreclosure a Qualified Loan, Fxxxxx Mac becomes the owner of real estate or by deed in lieu of foreclosureother property, the deed Master Servicer will immediately commence appropriate procedures to liquidate such real estate or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold other property if so requested by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effectFxxxxx Mac. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with Except as provided in the servicing standard set forth in last two paragraphs of this Section 3.1 and with a view to the best economic interest of the Trust Fund5.12, the Servicer shall shall, on behalf of the Trust, foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the Mortgaged Properties properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.25.3. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activitiesAccepted Servicing Practices. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine that (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds proceeds of liquidation of the Loan to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority reimburse itself for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed such expense prior to the Class R Certificateholder, but only to deposit in the extent that Collection Account of such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificatesproceeds). The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any of the Servicing Fees Fee and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Collection Account for P&I with respect thereto are permitted under Section 3.35.4. Within 30 days after receipt The Servicer may foreclose against the Property securing a defaulted Loan either by foreclosure, by sale or by strict foreclosure, and, in the case of Liquidation Proceeds Manufactured Homes repossession, and in respect of the event a Liquidated Loandeficiency judgment is available against the Borrower or any other person, the Servicer shall provide to the Trustee a statement of accounting may proceed for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisionsdeficiency. The Servicer shall manage, conserve, protect and operate each such REO Property for comply with the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning information reporting requirements of Section 860G(a)(8) 6050J of the Code with respect to Property that is foreclosed or abandoned, at the time and in the manner required by the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosureforeclosure (an "REO PROPERTY"), the deed or certificate of sale shall be issued to the Trustee, or to its nominee the Servicer on behalf of the Trustee, the Certificate Insurer and the Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such REO Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund REMIC I until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expensessuch REO Loan becomes a Liquidated Loan. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such REO Loan shall be considered to be an outstanding Outstanding Loan, it shall be assumed that, notwithstanding : (a) Notwithstanding that the indebtedness evidenced by the related Mortgage Note or the related Manufactured Home Contract, as applicable, shall have been discharged, such Mortgage Note andor the related Manufactured Home Contract, for purposes of determining the Scheduled Principal Balance thereofas applicable, and the related amortization schedule in effect at the time of any such acquisition of title (after giving effect to any previous Curtailments and before any adjustment thereto by reason of any bankruptcy or similar proceeding or any moratorium or similar waiver or grace period) shall be assumed to remain in effect, except that such schedule shall be adjusted to reflect the application of Net REO Proceeds received in any month pursuant to the succeeding clause. (eb) The Servicer Net REO Proceeds (after payment of Servicer's expenses related to disposition) from such Property received in any month shall not acquire for the benefit be deemed to have been received first in payment of the Trust Fund any personal property pursuant accrued interest that remained unpaid on the date that title to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so related REO Property was acquired by the Servicer for REMIC I, with the benefit excess thereof, if any, being deemed to have been received in respect of the Trust Fund; ordelinquent principal installments that remained unpaid on such date. Thereafter, Net REO Proceeds for such Property received in any month shall be applied to the payment of installments of principal and accrued interest on such Loan deemed to be due and payable in accordance with the terms of such Mortgage Note or Manufactured Home Contract, as applicable, and such amortization schedule. If such Net REO Proceeds exceed the then Unpaid REO Amortization, the excess shall be treated as a Curtailment received in respect of such Loan. (iic) The Net REO Proceeds allocated to the payment of a related Servicing Fee shall be limited to an amount equal to the product of (x) the total amount of Net REO Proceeds allocable to interest multiplied by (y) the fraction, the numerator of which is the interest rate at which the Servicing Fee is determined and the denominator of which is the Loan Interest Rate borne by such Loan. In the event that REMIC I acquires any Property as aforesaid or otherwise in connection with a default or imminent default on a Loan, such Property shall be disposed of by or on behalf of such REMIC prior to the close of the third calendar year following the year of its acquisition unless (i) the Servicer shall have requested provided to the Trustee and received the Certificate Insurer an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding by such REMIC of such personal property Property subsequent to such period (and specifying the period beyond such period for which the Property may be held) will not cause any of the Trust REMICs to be subject to the tax on prohibited transactions imposed by Code Section 860F(a)(1), otherwise subject any of the Trust REMICs or the Trust Fund will not cause the imposition of a to tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II any of the Trust Fund REMICs to fail to qualify as a REMIC at any time that any Certificates are outstanding, or (ii) the Servicer or the Trustee (at the Servicer's expense) shall have applied for, at least 60 days prior to the expiration of the close of such third calendar year, an extension of such period in the manner contemplated by Code Section 856(e)(3), in which case the initial period shall be extended by the applicable extension period. The Servicer shall further ensure that the Property is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by REMIC I of any income from non-permitted assets as described in Code Section 860F(a)(2)(B), and that REMIC I does not derive any "net income from foreclosure property" within the meaning of Code Section 860G(c)(2) with respect to such property. In lieu of foreclosing upon any defaulted Loan, the Servicer may, in its discretion, permit the assumption of such Loan if, in the Servicer's judgment, such default is unlikely to be cured and if the assuming borrower satisfies the Servicer's underwriting guidelines with respect to mortgage loans or manufactured home contacts, as applicable, owned by the Servicer. In connection with any such assumption, the Loan Interest Rate of the related Mortgage Note or Manufactured Home Contract, as applicable, and the payment terms shall not be changed. Any fee collected by Servicer for entering into an assumption agreement will be retained by the Servicer as servicing compensation. Alternatively, the Servicer may encourage the refinancing of any defaulted Loan by the Borrower. Notwithstanding the foregoing, prior to instituting foreclosure proceedings or accepting a deed-in-lieu of foreclosure with respect to any Property, the Servicer shall make, or cause to be made, inspection of the Property in accordance with the Accepted Servicing Practices and, with respect to environmental hazards, substantially comparable to such procedures as are required by the provisions of the FNMA's selling and servicing guide applicable to single-family homes or manufactured homes, as applicable, and in effect on the date hereof. The Servicer shall be entitled to rely upon the results of any such inspection made by others. In cases where the inspection reveals that such Property is potentially contaminated with or affected by hazardous wastes or hazardous substances, the Servicer shall promptly give written notice of such fact to the Certificate is outstandingInsurer, the Trustee and the Certificateholders. The Servicer shall not commence foreclosure proceedings or accept a deed-in-lieu of foreclosure for such Property without obtaining the consent of the Certificate Insurer.

Realization Upon Defaulted Loans. (a) Consistent with The Master Servicer shall, or shall cause the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fundapplicable Subservicer to, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the to ownership Mortgaged Properties securing such of the __________ Loans as come into and continue in default and as to which when, in the opinion of the Master Servicer, no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.23.02. In connection with such foreclosure or other conversion, the Master Servicer or such Subservicer shall follow such practices (including, in the case of any default on a related prior deed of trust, the advancing of funds to correct such default) and procedures as it shall deem necessary or advisable and as shall be normal and usual from time to time in its general mortgage servicing activities. In determining whether to foreclose upon or otherwise comparably convert the ownership of a Mortgaged Property, the Master Servicer and each Subservicer shall take into account (and shall not be required to foreclose or otherwise convert the ownership of such Mortgaged Property in the case of) the existence of any hazardous substances, hazardous wastes or solid wastes, as such terms are defined in the Comprehensive Environmental Response Compensation and Liability Act, the Resource Conservation and Recovery Act of 1976, or other federal, state or local environmental legislation, on such Mortgaged Property. The foregoing is subject to the proviso that neither the Master Servicer nor any Subservicer shall not be required to expend its own funds in connection with any foreclosure or to restore other conversion or towards the correction of any damaged default on a related prior mortgage loan or restoration of any property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days correction or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The restoration will increase Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged PropertyProceeds. In the event that the Trust Fund acquires any real property (Mortgaged Property by foreclosure or personal property incident to such real property) by deed in connection with a default or imminent default lieu of a Loanforeclosure, such REO Mortgaged Property shall be disposed of by or on behalf of the Trust Fund within three two years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Mortgaged Property subsequent to three two years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify result in the imposition of taxes on "prohibited transactions" (as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, defined in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) section 860F of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is Certificates are outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 30 days or more delinquent and which delinquent; provided that such repurchase shall only be made if (i) the Servicer determines in good faith would otherwise become subject has a contractual right to foreclosure proceedings or any require the third party seller of such delinquent Loan as to which the Mortgagor tenders repurchase such Loan, (ii) such repurchase is made to facilitate a deed in lieu of foreclosure repurchase by such third party seller and (iii) such repurchase is made at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due DatePurchase Price. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II the Trust Fund to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II the Trust Fund to remain qualified as REMICs a REMIC under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix3.2(b)(viii). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; providedPROVIDED, howeverHOWEVER, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either any of REMIC I I, REMIC II, REMIC III or REMIC II IV to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I I, REMIC II, REMIC III and REMIC II IV to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either any of REMIC I I, REMIC II, REMIC III or REMIC II IV of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is not in compliance with applicable environmental laws, and or there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would not be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the The Master Servicer shall use its best efforts, consistent with Servicing Standard, to foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the Mortgaged Properties properties securing such of the Loans (including selling any such Loans without converting the ownership of the related properties as provided in Section 3.16(e) below) as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities3.07. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Master Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that such costs and expenses will be recoverable as Servicing Advances by the Master Servicer as contemplated in Section 3.11 and Section 3.23. The foregoing is subject to the provision that, in any case in which a Property shall have suffered damage from an Uninsured Cause, the Master Servicer shall not be required to expend its own funds toward the restoration of such Property unless it shall be entitled determine in its discretion that such restoration will increase the proceeds of liquidation of the related Loan after reimbursement to reimbursement thereof (as well as itself for such expenses. The Master Servicer may foreclose against the Property securing a defaulted Loan either by foreclosure, by sale or by strict foreclosure, and, in the case of Manufactured Homes, repossession, and in the event a deficiency judgment is available against the Borrower or any Servicing Fees and other amounts due itperson, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting may proceed for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specifydeficiency. (b) Prior Notwithstanding the foregoing provisions of this Section 3.16 or any other provision of this Agreement, with respect to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders Master Servicer has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Property, the Master Servicer shall not, on behalf of the Trustee, either (i) obtain title to such Property as a deed result of or in lieu of foreclosure at or otherwise, or (ii) otherwise acquire possession of, or take any other action with respect to, such Property, if, as a price equal result of any such action, the Trustee, the Trust Fund or the Certificateholders would be considered to hold title to, to be a "m- possession" of, or to be an "owner" or "operator" of such Property within the outstanding Principal Balance meaning of the Loan plus accrued interest at Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement Master Servicer has also previously determined, based on its reasonable judgment and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent a Person who regularly conducts environmental audits that the Mortgaged using customary industry standards, that: (1) such Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental lawslaws or, and if not, that it would be in the best economic interest of the Trust Fund to take such actions as are necessary to bring the Property into compliance therewith; and (2) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum petroleum-based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such action could be required, that it would be in the best economic interest of the Trust Fund to acquire title take such actions with respect to the affected Property. 77 The cost of the environmental audit report contemplated by this Section 3.16 shall be advanced by the Master Servicer, subject to the Master Servicer's right to be reimbursed therefor from the Collection Account as provided in Section 3.11(a)(vii), such Mortgaged Property and further right of reimbursement being prior to the rights of Certificateholders to receive any amount in the Collection Account received in respect of the affected Loan or other Loans. If the Master Servicer determines, as described above, that it is in the best economic interest of the Trust Fund to take such actions as would be are necessary and appropriate to effect bring any such Property into compliance and/or respond with applicable environmental laws, or to take such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard action with respect to a the containment, cup or remediation of hazardous substances, hazardous materials, hazardous wastes or petro materials affecting any such Property, then the Master Servicer shall take such action as it dto be in the best economic interest of the Trust Fund; provided that any amounts disbursed by the Master Servicer pursuant to this Section 3.16(b) shall constitute Servicing Advances, subject to Section 4.04(d). The cost of any such compliance, containment, cleanup or remediation shall be advanced by the Master Servicer, subject to the Master Servicer's right to be reimbursed therefor from the Collection Account as provided in Section 3.11(a)(iii) and (a)(vii), such right of reimbursement being prior to the rights of Certificateholders to receive any amount in the Collection Account received in respect of the affected Loan for or other Loans. (c) The Master Servicer may at its option purchase from the Trust Fund any Loan or related REO Property that is 90 days or more delinquent, which foreclosure proceedings are contemplated, the Master Servicer will not conduct such foreclosure proceedings unless it determines in good faith will otherwise become subject to foreclosure proceedings (evidence of such determination to be delivered in writing to the Trustee prior to purchase), at a price equal to the Purchase Price; provided, however, that the liability associated with Master Servicer shall purchase any such Loans or related REO Properties on the environmental hazard will basis of delinquency, purchasing the most delinquent Loans or related REO Properties first. The Purchase Price for any Loan or related REO Property purchased hereunder shall be less than deposited in the Liquidation Proceeds Distribution Account, and the Trustee, upon receipt of such deposit, shall release or cause to be realized from released to the sale of Master Servicer the related Mortgaged Property. In the event that the Trust Fund acquires any real property (Loan File and shall execute and deliver such instruments of transfer or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstandingassignment, in which each case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereofwithout recourse, as the Master Servicer deems shall furnish and as shall be necessary to be vest in the best interest of the Master Servicer and the Certificateholders for the period prior title to the sale of such REO Property. All proceeds from the renting of such any Loan or related REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I released pursuant to Section 3.3(b)(ix)hereto. (d) In Proceeds received in connection with any Final Recovery Determination, as well as any recovery resulting from a partial collection of Insurance Proceeds or Liquidation Proceeds, in respect of any Loan, will be applied in the event that title following order of priority: first, to unpaid Servicing Fees; second, to reimburse the Master Servicer or any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosureSub-Servicer for any related unreimbursed Servicing Advances pursuant to Section 3.11(a)(iii) and Advances pursuant to Section 3.11(a)(ii); third, to accrued and unpaid interest on the deed or certificate of sale shall be issued Loan, to the Trusteedate of the Final Recovery Determination, or to its nominee the Due Date prior to the Distribution Date on behalf which such amounts are to be distributed if not in connection with a Final Recovery Determination; and fourth, as a recovery of Certificateholders. Notwithstanding any such acquisition of title and cancellation principal of the related Loan, such Loan shall (except for purposes . The portion of Section 9.1) be considered the recovery so allocated to be a Loan held in the Trust Fund until such time as the related REO Property unpaid Servicing Fees shall be sold by reimbursed to the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered Master Servicer or any Sub-Servicer pursuant to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effectSection 3.11(a)(iii). (e) The If the Master Servicer shall not acquire for determines that it is in the benefit best economic interest of the Trust Fund any personal property pursuant Certificateholders to this Section 3.7 unless either: (i) sell a Loan that is over 90 days Delinquent, rather than foreclosing, the Master Servicer may effect such personal property is incident to real property (within the meaning a sale. The net proceeds of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion such sale shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstandingLiquidation Proceeds.

Realization Upon Defaulted Loans. (a) Consistent with The Master Servicer shall, or shall cause the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fundapplicable Subservicer to, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the to ownership Mortgaged Properties securing such of the ____________ Loans as come into and continue in default and as to which when, in the opinion of the Master Servicer, no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.23.02. In connection with such foreclosure or other conversion, the Master Servicer or such Subservicer shall follow such practices (including, in the case of any default on a related prior deed of trust, the advancing of funds to correct such default) and procedures as it shall deem necessary or advisable and as shall be normal and usual from time to time in its general mortgage servicing activities. In determining whether to foreclose upon or otherwise comparably convert the ownership of a Mortgaged Property, the Master Servicer and each Subservicer shall take into account (and shall not be required to foreclose or otherwise convert the ownership of such Mortgaged Property in the case of) the existence of any hazardous substances, hazardous wastes or solid wastes, as such terms are defined in the Comprehensive Environmental Response Compensation and Liability Act, the Resource Conservation and Recovery Act of 1976, or other federal, state or local environmental legislation, on such Mortgaged Property. The foregoing is subject to the proviso that neither the Master Servicer nor any Subservicer shall not be required to expend its own funds in connection with any foreclosure or to restore other conversion or towards the correction of any damaged default on a related prior mortgage loan or restoration of any property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days correction or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b)restoration will increase Net Liquidation Proceeds. (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of offered Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; providedPROVIDED, howeverHOWEVER, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix3.3(b)(viii). (dc) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent The Servicer shall use its best efforts, consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, procedures that the Servicer shall would use in servicing loans for its own account, to foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the such Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.24.01. In connection with The Servicer shall use its best efforts to realize upon Defaulted Loans in such a manner as will maximize the receipt of principal and interest by the Issuer, taking into account, among other things, the timing of foreclosure or other conversionproceedings; provided, however, that the Servicer shall follow such practices and procedures as not sell any Defaulted Loan unless it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activitieshas been directed to do so by the Majority Noteholder. The foregoing is subject to the proviso that provisions that, in any case in which Mortgaged Property shall have suffered damage, the Servicer shall not be required to expend its own funds toward the restoration of such property in connection with any foreclosure or to restore any damaged property excess of $2,000 unless it shall determine in its discretion (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds proceeds of liquidation of the related Loan to Certificateholders the Issuer after reimbursement to itself for such expenses expenses, and (ii) that such expenses will be recoverable to it by the Servicer through Mortgage Insurance Proceeds or Liquidation Proceeds (respecting which from the related Mortgaged Property. In the event that any payment due under any Loan is not paid when the same becomes due and payable, or in the event the Borrower fails to perform any other covenant or obligation under the Loan and such failure continues beyond any applicable grace period, the Servicer shall take such action as it shall have priority for purposes of withdrawal from deem to be in the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders best interest of the other Classes of CertificatesIssuer and the Noteholders. The Servicer shall notify the Issuer and the Noteholders in writing of the commencement of foreclosure proceedings. In such connection, the Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specifyMortgaged Property. (b) Prior Notwithstanding the foregoing provisions of this Section 4.03, with respect to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders Servicer has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property the Servicer shall not either (i) obtain title to such Mortgaged Property as a deed result of or in lieu of foreclosure at or otherwise, or (ii) otherwise acquire possession of, or take any other action, with respect to, such Mortgaged Property if, as a price equal result of any such action, the Issuer would be considered to hold title to, to be a mortgagee-in-possession of, or to be an owner or operator of such Mortgaged Property within the outstanding Principal Balance meaning of the Loan plus accrued interest at Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed Servicer has also previously determined, based on its reasonable judgment and a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a prudent report prepared by an Independent a Person who regularly conducts environmental audits that the using customary industry standards, that: (1) such Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental lawslaws or, if not, that it would be in the best economic interest of the Issuer and the Noteholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and (2) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum petroleum-based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such action could be required, that it would be in the best economic interest of the Trust Fund Issuer and the Noteholders to acquire title take such actions with respect to such the affected Mortgaged Property Property. The cost of the environmental audit report contemplated by this Section 4.03 shall be advanced by the Servicer, subject to the Servicer’s right to be reimbursed therefor from the Collection Account as provided in Section 5.01(c). If the Servicer determines, as described above, that it is in the best economic interest of the Issuer and further the Noteholders to take such actions as would be are necessary and appropriate to effect bring any such Mortgaged Property into compliance and/or respond with applicable environmental laws, or to take such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard action with respect to a Loan for which foreclosure proceedings are contemplatedthe containment, the Servicer will not conduct clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials affecting any such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve take such REO Property in the same manner and to such extent action as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer it deems to be in the best economic interest of the Servicer Issuer and the Certificateholders for Noteholders. The cost of any such compliance, containment, cleanup or remediation shall be advanced by the period prior Servicer, subject to the sale of such REO Property. All proceeds Servicer’s right to be reimbursed therefor from the renting of such REO Property shall, net of any costs or expenses of the Servicer Collection Account as provided in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix5.01(c). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (ec) The Servicer shall not acquire for the benefit determine, with respect to each Defaulted Loan, when it has recovered, whether through trustee’s sale, foreclosure sale or otherwise, all amounts it expects to recover from or on account of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer defaulted Loan, whereupon such Loan shall have requested become a “Liquidated Loan” and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) promptly deliver to the effect that the holding of Initial Noteholder a related liquidation report with respect to such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstandingLiquidated Loan.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R CertificateholderCertificateholders, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is not in compliance with applicable environmental laws, and or there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would not be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.behalf

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of offered Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix3.3(b)(viii). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent The Seller shall use its best efforts, consistent with Accepted Servicing Practices and the procedures that the Seller would use in servicing standard set forth in Section 3.1 and with a view loans for its own account, to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the such Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.211.01. In connection with The Seller shall use its best efforts to realize upon defaulted Loans in such foreclosure or a manner as will maximize the receipt of principal and interest by the Purchaser, taking into account, among other conversionthings, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activitiestiming of foreclosure proceedings. The foregoing is subject to the proviso that provisions that, in any case in which a Mortgaged Property shall have suffered damage, the Servicer Seller shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged toward the restoration of such property unless it shall determine in its discretion (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds proceeds of liquidation of the related Loan to Certificateholders Purchaser after reimbursement to itself for such expenses expenses, and (ii) that such expenses will be recoverable to it by the Seller through Insurance Proceeds or Liquidation Proceeds (respecting which from the related Mortgaged Property, as contemplated in Section 11.05. In the event that any payment due under any Loan is not paid when the same becomes due and payable, or in the event the Borrower fails to perform any other covenant or obligation under the Loan and such failure continues beyond any applicable grace period, the Seller shall take such action as it shall have priority deem to be in the best interest of the Purchaser. In the event any payment due under any Loan is not paid when the same becomes due and payable, or in the event the Borrower fails to perform any other covenant or obligation under the Loan, and such failure continues beyond any applicable grace period, the Seller will proceed diligently to collect all payments due and shall take such action, including commencing foreclosure, as it shall reasonably deem to be in the best interests of the Purchaser in a manner consistent with Accepted Servicing Practices. Should any Loan remain delinquent for purposes a period of withdrawal from 90 days, the Custodial Account for P&I pursuant Seller shall use Accepted Servicing Practices and refer the file to Section 3.3)foreclosure by the 120th day of delinquency. Any gain on Notification of foreclosure or other conversion of a Liquidated Loan proceedings shall be distributed reported to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of CertificatesPurchaser. The Servicer shall Should a foreclosure sale be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loanimminent, the Servicer Seller shall provide to the Trustee obtain a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired value and issue bidding instructions in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specifyaccordance with Accepted Servicing Practices. (b) Prior Notwithstanding the foregoing provisions of this Section 11.03, with respect to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders Seller has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, the Seller shall not either (i) obtain title to such Mortgaged Property as a deed result of or in lieu of foreclosure at or otherwise, or (ii) otherwise acquire possession of, or take any other action, with respect to, such Mortgaged Property if, as a price equal result of any such action, the Purchaser would be considered to hold title to, to be a mortgagee-in-possession of, or to be an owner or operator of such Mortgaged Property within the outstanding Principal Balance meaning of the Loan plus accrued interest at Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed Seller has also previously determined, based on its reasonable judgment and a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a prudent report prepared by an Independent a Person who regularly conducts environmental audits that the using customary industry standards, that: (1) such Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental lawslaws or, and if not, that it would be in the best economic interest of the Purchaser to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and (2) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum petroleum-based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such action could be required, that it would be in the best economic interest of the Trust Fund Purchaser to acquire title take such actions with respect to such the affected Mortgaged Property and further Property. The cost of the environmental audit report contemplated by this Section 11.03 shall be advanced by the Seller, subject to the Seller’s right to be reimbursed therefor from the Custodial Account as provided in Section 11.05(vii). If the Seller determines, as described above, that it is in the best economic interest of the Purchaser to take such actions as would be are necessary and appropriate to effect bring any such Mortgaged Property into compliance and/or respond with applicable environmental laws, or to take such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard action with respect to a Loan for which foreclosure proceedings are contemplatedthe containment, the Servicer will not conduct clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials affecting any such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In , then the event that the Trust Fund acquires any real property (or personal property incident to Seller shall take such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify action as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer it deems to be in the best economic interest of the Servicer and Purchaser. The cost of any such compliance, containment, cleanup or remediation shall be advanced by the Certificateholders for the period prior Seller, subject to the sale of such REO Property. All proceeds Seller’s right to be reimbursed therefor from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to as provided in Section 3.3(b)(ix11.05(vii). (dc) In Proceeds received in connection with any Final Recovery Determination, as well as any recovery resulting from a partial collection of Insurance Proceeds or Liquidation Proceeds in respect of any Loan, will be applied in the event that title following order of priority: first, to reimburse the Seller for any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosurerelated unreimbursed Servicing Advances. pursuant to Section 11.05(iii); second, to accrued and unpaid interest on the deed or certificate of sale shall be issued Loan, to the Trusteedate of the Final Recovery Determination, or to its nominee the Due Date prior to the Distribution Date on behalf which such amounts are to be distributed if not in connection with a Final Recovery Determination; and third, as a recovery of Certificateholders. Notwithstanding any such acquisition of title and cancellation principal of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of offered Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 30 days or more delinquent and which delinquent; provided that such repurchase shall only be made if (i) the Servicer determines in good faith would otherwise become subject has a contractual right to foreclosure proceedings or any require the third party seller of such delinquent Loan as to which the Mortgagor tenders repurchase such Loan, (ii) such repurchase is made to facilitate a deed in lieu of foreclosure repurchase by such third party seller and (iii) such repurchase is made at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due DatePurchase Price. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I I, REMIC II, REMIC III or REMIC II IV to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I I, REMIC II, REMIC III and REMIC II IV to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix3.3(b)(viii). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I I, REMIC II, REMIC III or REMIC II IV of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Subject to Section 3.1 and with a view to the best economic interest of the Trust Fund3.14, the Special Servicer shall repossess, foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the Mortgaged Properties assets securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to the Servicing Guidelines and the provisions of the Agreement, and which are not released from the Trust Estate pursuant to any other provision hereof, if the Special Servicer determines, in a manner consistent with the servicing standard set forth in Section 3.2. In connection with such foreclosure or other conversion3.04, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it action would be in the best economic interest of the Trust Fund to acquire title to Certificateholders. The Special Servicer shall advance the costs and expenses of any such Mortgaged Property and further to take proceeding unless it makes a determination, in its reasonable business judgment, that such actions as advance, if made, would be necessary and appropriate nonrecoverable. The Special Servicer shall be entitled to effect reimbursement of advances made pursuant to the preceding sentence from Recoveries on such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedingsLoan. If the Special Servicer otherwise becomes aware, under its customary servicing procedures, elects to proceed with a foreclosure in accordance with the laws of an environmental hazard with respect to a the state where the Loan for which foreclosure proceedings are contemplatedCollateral is located, the Special Servicer shall not be required to pursue a deficiency judgment against the related Obligor or any other liable party if the laws of the state do not permit such a deficiency judgment after such foreclosure or if the Special Servicer determines, in its best judgment, that the likely recovery if a deficiency judgment is obtained will not conduct such foreclosure proceedings unless it determines in good faith that be sufficient to warrant the liability associated with cost, time, expense or exposure of pursuing the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Propertydeficiency judgment. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that If title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, then the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. . (b) Notwithstanding any such acquisition of title and cancellation provision to the contrary contained in this Agreement, the Special Servicer shall not, on behalf of the related LoanTrust Estate, obtain title to a Mortgaged Property as a result of or in lieu of foreclosure or otherwise, and shall not otherwise acquire possession of, or take any other action with respect to, any Mortgaged Property if, as a result of any such Loan action, the Trustee, the Servicer, the Depositor, the Company or the Certificateholders, would be considered to hold title to, to be a "mortgagee-in- possession" of or to be an "owner" or "operator" of such Mortgaged Property within the meaning of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended from time to time, or any comparable law, unless the Special Servicer has previously determined in accordance with this Section 3.12, based on an Environmental Assessment report prepared by an Independent Person satisfying the requirements set forth in the first sentence of Section 3.12(c), that: (i) such Mortgaged Property is in compliance with applicable environmental laws (in the reasonable judgment of such Independent Person based upon all available information) or, if not, that it would be in the best economic interest of the Trust Estate and there would be no adverse effect on the Servicer, Special Servicer, Trustee or Depositor to take such actions as are necessary to bring such Mortgaged Property in compliance therewith, and (ii) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any Hazardous Substances for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any currently effective federal, state or local law or regulation (in the reasonable judgment of such Independent Person based upon all available information), or that, if any such Hazardous Substances are present for which such action could be required, it would be in the best economic interest of the Trust Estate and there would be no adverse effect on the Servicer, Special Servicer, Trustee or the Depositor to take such actions with respect to the affected Mortgaged Property. In the event that the Environmental Assessment first obtained by the Special Servicer with respect to a Mortgaged Property indicates that such Mortgaged Property may not be in compliance with applicable environmental laws or that Hazardous Substances may be present but does not definitively establish such fact, the Special Servicer shall (except cause such further environmental tests to be conducted by an Independent Person who regularly conducts such tests as the Special Servicer shall deem prudent to protect the interests of Certificateholders. Any such tests shall be deemed part of the Environmental Assessment obtained by the Special Servicer for purposes of this Section 9.13.12. (c) The Environmental Assessment contemplated by Section 3.12(b) shall be considered prepared by any Independent Person who regularly conducts environmental audits for purchasers of commercial property, as determined by the Special Servicer in a manner consistent with the servicing standard set forth in Section 3.04. The Special Servicer shall advise the Trustee by delivery of a certificate of a Special Servicer Officer of the cost of preparation of an Environmental Assessment, and the Trustee shall pay such cost from amounts on deposit in the Collection Account. The Trustee may rely conclusively on such certificate and shall have no duty or obligation to re-calculate the amounts stated therein. To the extent that amounts on deposit in the Collection Account are insufficient, the Special Servicer shall advance the amount of such insufficiency as an advance unless the Special Servicer makes a determination, in its reasonable business judgment, that such advance would be nonrecoverable. (d) If the Special Servicer determines pursuant to Section 3.12(b)(i) that a Mortgaged Property securing a Defaulted Loan is not in compliance with applicable environmental laws but that it is in the best economic interest of the Trust Estate to take such actions as are necessary to bring such Mortgaged Property in compliance therewith, or if the applicable Special Servicer determines pursuant to Section 3.12(b)(ii) that the circumstances referred to therein relating to Hazardous Substances are present on a Mortgaged Property securing a Defaulted Loan but that it is in the best economic interest of the Trust Estate to take such action with respect to the containment, clean-up or remediation of Hazardous Substances affecting such Mortgaged Property as is required by law or regulation, the Special Servicer shall take such action as it deems to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by best economic interest of the Trust Fund Estate and shall be reduced only by collections net of expenses. Consistent with that would not have an adverse effect on the foregoingServicer, for purposes of all calculations hereunderthe Special Servicer, so long as such Loan shall be considered to be an outstanding Loanthe Depositor, it shall be assumed the Trustee or the Certificateholders; provided that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time advance of any such acquisition action, the Trustee shall mail notice to the Certificateholders and the Certificateholder Agent of title remain such proposed action, which notice shall be prepared by the Special Servicer, and if the Trustee receives, within thirty (30) days of such notification, instructions from the Directing Holders directing the Special Servicer not to take such action, then the Special Servicer shall so refrain; provided further that, if there has occurred a Depositor Event of Default, then the Special Servicer shall act without the instructions of the Directing Holders, unless, in effectthe case of a Depositor Event of Default under Section 6.01(a), (b) or (c) of the Trust Agreement, the Directing Holders are Independent. The Special Servicer shall advise the Trustee by delivery of an Officer's Certificate of the cost of any such compliance, containment, clean-up or remediation, and the Trustee shall pay such cost from amounts on deposit in the Collection Account. To the extent that amounts on deposit in the Collection Account are insufficient, the Special Servicer shall advance the amount of such shortfall unless the Special Servicer makes a determination, in its reasonable business judgment, that such advance, if made, would be nonrecoverable. The Special Servicer shall be entitled to reimbursement of advances made pursuant to the preceding sentence from Recoveries on such Loan. (e) The Servicer shall not acquire for report to the benefit Internal Revenue Service and to the related Obligor, in the manner required by applicable law, the information required to be reported regarding any Mortgaged Property or any mortgagor including regarding any Mortgaged Property that is abandoned or foreclosed. The Servicer shall concurrently deliver a copy of any such report to the Trust Fund Trustee. The Special Servicer, on a timely basis, shall provide the Servicer with such information as to any personal property pursuant Loan as is necessary to enable the Servicer to comply with this Section 3.7 unless either:3.12(e). (f) The Special Servicer shall cause an updated Valuation to be prepared with respect to any Loan (i) promptly upon such personal property is incident to real property Loan becoming a Defaulted Loan and (within the meaning of Section 856(e)(1ii) so long as such Loan remains a Defaulted Loan, on each six (6) month anniversary of the Codedate such Loan became a Defaulted Loan. Such updated Valuation shall be prepared by an Independent Person or the Servicing Advisor (or an Affiliate thereof) so acquired by for an amount not to exceed the lesser of (A) the lowest amount then being quoted to or available to the Special Servicer for the benefit preparation of such a Valuation and (B) $5,000, adjusted for inflation based on changes in the Trust Fund; or (ii) "Consumer Price Index" since the date of this Agreement. Upon its receipt of each updated Valuation, the Special Servicer shall have requested promptly provide a copy thereof to the Servicer, the Servicing Advisor, the Directing Holders, the Trustee and received an Opinion the Certificateholder Agent. The cost of Counsel (which opinion all updated Valuation(s) made in accordance with this Section 3.12(f) shall be an expense of the Trust FundEstate. (g) Upon any Defaulted Loan becoming a Liquidated Loan, the Servicer shall deliver a certificate of a Servicing Officer to the effect Depositor, the Trustee and the Certificateholder Agent specifying (i) the actual amount of all Recoveries received by the Servicer in respect of such Loan to the date of such certificate, and (ii) the amount of all other Recoveries, if any, that the holding of Servicer expects to be recovered in the future with respect to such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstandingLoan.

Realization Upon Defaulted Loans. (a) Consistent The Seller shall use its best efforts, consistent with Accepted Servicing Practices and the procedures that the Seller would use in servicing standard set forth in Section 3.1 and with a view loans for its own account, to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the such Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.211.01. In connection with The Seller shall use its best efforts to realize upon defaulted Loans in such foreclosure or a manner as will maximize the receipt of principal and interest by the Purchaser, taking into account, among other conversionthings, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activitiestiming of foreclosure proceedings. The foregoing is subject to the proviso that provisions that, in any case in which a Mortgaged Property shall have suffered damage, the Servicer Seller shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged toward the restoration of such property unless it shall determine in its discretion (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds proceeds of liquidation of the related Loan to Certificateholders Purchaser after reimbursement to itself for such expenses expenses, and (ii) that such expenses will be recoverable to it by the Seller through Insurance Proceeds or Liquidation Proceeds (respecting which from the related Mortgaged Property, as contemplated in Section 11.05. In the event that any payment due under any Loan is not paid when the same becomes due and payable, or in the event the Borrower fails to perform any other covenant or obligation under the Loan and such failure continues beyond any applicable grace period, the Seller shall take such action as it shall have priority deem to be in the best interest of the Purchaser. In the event any payment due under any Loan is not paid when the same becomes due and payable, or in the event the Borrower fails to perform any other covenant or obligation under the Loan, and such failure continues beyond any applicable grace period, the Seller will proceed diligently to collect all payments due and shall take such action, including commencing foreclosure, as it shall reasonably deem to be in the best interests of the Purchaser in a manner consistent with Accepted Servicing Practices. Should any Loan remain delinquent for purposes a period of withdrawal from ninety (90) days, the Custodial Account for P&I pursuant Seller shall use Accepted Servicing Practices and refer the file to Section 3.3)foreclosure by the 120th day of delinquency. Any gain on Notification of foreclosure or other conversion of a Liquidated Loan proceedings shall be distributed reported to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of CertificatesPurchaser. The Servicer shall Should a foreclosure sale be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loanimminent, the Servicer Seller shall provide to the Trustee obtain a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired value and issue bidding instructions in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specifyaccordance with Accepted Servicing Practices. (b) Prior Notwithstanding the foregoing provisions of this Section 11.03, with respect to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders Seller has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, the Seller shall not either (i) obtain title to such Mortgaged Property as a deed result of or in lieu of foreclosure at or otherwise, or (ii) otherwise acquire possession of, or take any other action, with respect to, such Mortgaged Property if, as a price equal result of any such action, the Purchaser would be considered to hold title to, to be a mortgagee-in-possession of, or to be an owner or operator of such Mortgaged Property within the outstanding Principal Balance meaning of the Loan plus accrued interest at Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed Seller has also previously determined, based on its reasonable judgment and a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a prudent report prepared by an Independent a Person who regularly conducts environmental audits that the using customary industry standards, that: (1) such Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental lawslaws or, and if not, that it would be in the best economic interest of the Purchaser to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and (2) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum petroleum-based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such action could be required, that it would be in the best economic interest of the Trust Fund Purchaser to acquire title take such actions with respect to such the affected Mortgaged Property and further Property. The cost of the environmental audit report contemplated by this Section 11.03 shall be advanced by the Seller, subject to the Seller’s right to be reimbursed therefor from the Custodial Account as provided in Section 11.05(vii). If the Seller determines, as described above, that it is in the best economic interest of the Purchaser to take such actions as would be are necessary and appropriate to effect bring any such Mortgaged Property into compliance and/or respond with applicable environmental laws, or to take such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard action with respect to a Loan for which foreclosure proceedings are contemplatedthe containment, the Servicer will not conduct clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials affecting any such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In , then the event that the Trust Fund acquires any real property (or personal property incident to Seller shall take such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify action as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer it deems to be in the best economic interest of the Servicer and Purchaser. The cost of any such compliance, containment, cleanup or remediation shall be advanced by the Certificateholders for the period prior Seller, subject to the sale of such REO Property. All proceeds Seller’s right to be reimbursed therefor from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to as provided in Section 3.3(b)(ix1 l.05(vii). (dc) In Proceeds received in connection with any Final Recovery Determination, as well as any recovery resulting from a partial collection of Insurance Proceeds or Liquidation Proceeds in respect of any Loan, will be applied in the event that title following order of priority: first, to reimburse the Seller for any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosurerelated unreimbursed Servicing Advances, pursuant to Section 11.05(iii); second, to accrued and unpaid interest on the deed or certificate of sale shall be issued Loan, to the Trusteedate of the Final Recovery Determination, or to its nominee the Due Date prior to the Distribution Date on behalf which such amounts are to be distributed if not in connection with a Final Recovery Determination; and third, as a recovery of Certificateholders. Notwithstanding any such acquisition of title and cancellation principal of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I P & I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R CertificateholderCertificateholders, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I P & I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.tenders

Realization Upon Defaulted Loans. (a) Consistent The Seller shall use its best efforts, consistent with Accepted Servicing Practices and the procedures that the Seller would use in servicing standard set forth in Section 3.1 and with a view loans for its own account, to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the such Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.211.01. In connection with The Seller shall use its best efforts to realize upon defaulted Loans in such foreclosure or a manner as will maximize the receipt of principal and interest by the Purchaser, taking into account, among other conversionthings, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activitiestiming of foreclosure proceedings. The foregoing is subject to the proviso that provisions that, in any case in which a Mortgaged Property shall have suffered damage, the Servicer Seller shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged toward the restoration of such property unless it shall determine in its discretion (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds proceeds of liquidation of the related Loan to Certificateholders Purchaser after reimbursement to itself for such expenses expenses, and (ii) that such expenses will be recoverable to it by the Seller through Insurance Proceeds or Liquidation Proceeds (respecting which from the related Mortgaged Property, as contemplated in Section 11.05. In the event that any payment due under any Loan is not paid when the same becomes due and payable, or in the event the Borrower fails to perform any other covenant or obligation under the Loan and such failure continues beyond any applicable grace period, the Seller shall take such action as it shall have priority deem to be in the best interest of the Purchaser. In the event any payment due under any Loan is not paid when the same becomes due and payable, or in the event the Borrower fails to perform any other covenant or obligation under the Loan, and such failure continues beyond any applicable grace period, the Seller will proceed diligently to collect all payments due and shall take such action, including commencing foreclosure, as it shall reasonably deem to be in the best interests of the Purchaser in a manner consistent with Accepted Servicing Practices. Should any Loan remain delinquent for purposes a period of withdrawal from ninety (90) days, the Custodial Account for P&I pursuant Seller shall use Accepted Servicing Practices and refer the file to Section 3.3). Any gain on foreclosure or other conversion loss mitigation by the 120th day of a Liquidated Loan delinquency. Notification of foreclosure proceedings shall be distributed reported to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of CertificatesPurchaser. The Servicer shall Should a foreclosure sale be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loanimminent, the Servicer Seller shall provide to the Trustee obtain a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired value and issue bidding instructions in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specifyaccordance with Accepted Servicing Practices. (b) Prior Notwithstanding the foregoing provisions of this Section 11.03, with respect to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders Seller has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, the Seller shall not either (i) obtain title to such Mortgaged Property as a deed result of or in lieu of foreclosure at or otherwise, or (ii) otherwise acquire possession of, or take any other action, with respect to, such Mortgaged Property if, as a price equal result of any such action, the Purchaser would be considered to hold title to, to be a mortgagee-in-possession of, or to be an owner or operator of such Mortgaged Property within the outstanding Principal Balance meaning of the Loan plus accrued interest at Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed Seller has also previously determined, based on its reasonable judgment and a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a prudent report prepared by an Independent a Person who regularly conducts environmental audits that the using customary industry standards, that: (1) such Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental lawslaws or, and if not, that it would be in the best economic interest of the Purchaser to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and (2) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum petroleum-based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such action could be required, that it would be in the best economic interest of the Trust Fund Purchaser to acquire title take such actions with respect to such the affected Mortgaged Property and further Property. The cost of the environmental audit report contemplated by this Section 11.03 shall be advanced by the Seller, subject to the Seller's right to be reimbursed therefor from the Custodial Account as provided in Section 11.05(vii). If the Seller determines, as described above, that it is in the best economic interest of the Purchaser to take such actions as would be are necessary and appropriate to effect bring any such Mortgaged Property into compliance and/or respond with applicable environmental laws, or to take such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard action with respect to a Loan for which foreclosure proceedings are contemplatedthe containment, the Servicer will not conduct clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials affecting any such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In , then the event that the Trust Fund acquires any real property (or personal property incident to Seller shall take such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify action as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer it deems to be in the best economic interest of the Servicer and Purchaser. The cost of any such compliance, containment, cleanup or remediation shall be advanced by the Certificateholders for the period prior Seller, subject to the sale of such REO Property. All proceeds Seller's right to be reimbursed therefor from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to as provided in Section 3.3(b)(ix1 l.05(vii). (dc) In Proceeds received in connection with any Final Recovery Determination, as well as any recovery resulting from a partial collection of Insurance Proceeds or Liquidation Proceeds in respect of any Loan, will be applied in the event that title following order of priority: first, to reimburse the Seller for any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosurerelated unreimbursed Servicing Advances, pursuant to Section 11.05(iii); second, to accrued and unpaid interest on the deed or certificate of sale shall be issued Loan, to the Trusteedate of the Final Recovery Determination, or to its nominee the Due Date prior to the Distribution Date on behalf which such amounts are to be distributed if not in connection with a Final Recovery Determination; and third, as a recovery of Certificateholders. Notwithstanding any such acquisition of title and cancellation principal of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting 101 which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of offered Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless 102 the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.this

Realization Upon Defaulted Loans. (a) Consistent The Servicer shall use reasonable efforts, consistent with the servicing standard set forth in Section 3.1 and with a view Servicing Standards, to the best economic interest of the Trust Fundrepossess, the Servicer shall foreclose upon remarket or otherwise comparably convert (which may include acquisition the ownership of an REO Property) each item of Equipment and other collateral that it has reasonably determined should be repossessed or otherwise converted following a default under the Mortgaged Properties securing Loan secured by each such item of the Loans as come into Equipment and continue in default and as other collateral. The Servicer is authorized to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices practices, policies and procedures as it shall deem necessary or advisable and as shall be normal in accordance with the Servicing Standards to realize upon or obtain benefits of any proceeds from any Insurance Policies and usual proceeds from any Guaranties, in its general mortgage servicing activitieseach case with respect to the Loans, selling the related Equipment and other collateral at public or private sale or sales and other actions by the Servicer in order to realize upon such a Loan. The foregoing is subject to the proviso provision that, in any case in which the Equipment shall have suffered damage, the Servicer shall not expend funds in connection with any repair or towards the repossession of such Equipment unless it shall determine in its discretion consistent with the Servicing Standards that such repair and/or repossession shall likely increase the proceeds of liquidation of the related Loan by an amount greater than the amount of such expenses. The Servicer shall be entitled to receive Liquidation Expenses with respect to each Defaulted Loan out of amounts that would otherwise comprise Liquidation Proceeds with respect to the related Loan. The Servicer shall enforce any of the foregoing rights and remedies described in this Section 3.04 with respect to any Defaulted Loans that are cross collateralized by other loan obligations, in the manner and priority specified in Section 5.10 of the Purchase Agreement. To the extent that an escrow account has been established by or on behalf of an Obligor to cover defaults on contracts between such Obligor and the Originator, amounts in such escrow account shall be applied against defaults under each such contract in the order that such defaults occur with respect to any such contract unless otherwise required by law, regulation or judicial order. The Servicer shall not accelerate any Scheduled Payment unless permitted to do so by the terms of the Loan or under applicable law; and provided, that the Servicer shall not declare an Obligor to be required in default under a Loan nor exercise any other remedies under such Loan based solely on a default by such Obligor under any other obligation of such Obligor to expend ALS or its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that Affiliates, if such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain Obligor is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it also in any default under such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, Loan unless the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) concludes that declaring such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which default is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer Noteholders and the Certificateholders Insurer or will maximize potential recoveries from such Obligor for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire Issuer for the benefit of the Trust Fund any personal property Noteholders and the Insurer provided further that a successor Servicer (other than an affiliate of ALS or successor thereto pursuant to this Section 3.7 7.02) shall not declare an Obligor to be in default under a Loan nor exercise any other remedies under such Loan based solely on such a cross default unless either: (i) such personal property is incident the successor Servicer shall be directed to real property (within the meaning of Section 856(e)(1) of the Code) do so acquired by the Controlling Party (any such successor Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) agrees to give prompt notice to the effect that the holding Controlling Party of any circumstances of which it is aware which would permit such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstandingcross default).

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 30 days or more delinquent and which delinquent; provided that such repurchase shall only be made if (i) the Servicer determines in good faith would otherwise become subject has a contractual right to foreclosure proceedings or any require the third party seller of such delinquent Loan as to which the Mortgagor tenders repurchase such Loan, (ii) such repurchase is made to facilitate a deed in lieu of foreclosure repurchase by such third party seller and (iii) such repurchase is made at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due DatePurchase Price. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix3.2(b)(viii). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.on

Realization Upon Defaulted Loans. (a) Consistent The Servicer shall use its best efforts, consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, procedures that the Servicer shall would use in servicing loans for its own account, to foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the such Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.24.01. In connection with The Servicer shall use its best efforts to realize upon Defaulted Loans in such a manner as will maximize the receipt of principal and interest by the Issuer, taking into account, among other things, the timing of foreclosure or other conversionproceedings; provided, however, that the Servicer shall follow such practices and procedures as not sell any Defaulted Loan unless it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activitieshas been directed to do so by the Majority Noteholder. The foregoing is subject to the proviso that provisions that, in any case in which Mortgaged Property shall have suffered damage, the Servicer shall not be required to expend its own funds toward the restoration of such property in connection with any foreclosure or to restore any damaged property excess of $2,000 unless it shall determine in its discretion (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds proceeds of liquidation of the related Loan to Certificateholders the Issuer after reimbursement to itself for such expenses expenses, and (ii) that such expenses will be recoverable to it by the Servicer through Mortgage Insurance Proceeds or Liquidation Proceeds (respecting which from the related Mortgaged Property. In the event that any payment due under any Loan is not paid when the same becomes due and payable, or in the event the Borrower fails to perform any other covenant or obligation under the Loan and such failure continues beyond any applicable grace period, the Servicer shall take such action as it shall have priority for purposes of withdrawal from deem to be in the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders best interest of the other Classes of CertificatesIssuer and the Noteholders. The Servicer shall notify the Issuer and the Noteholders in writing of the commencement of foreclosure proceedings. In such connection, the Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specifyMortgaged Property. (b) Prior Notwithstanding the foregoing provisions of this Section 4.03, with respect to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders Servicer has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property the Servicer shall not either (i) obtain title to such Mortgaged Property as a deed result of or in lieu of foreclosure at or otherwise, or (ii) otherwise acquire possession of, or take any other action, with respect to, such Mortgaged Property if, as a price equal result of any such action, the Issuer would be considered to hold title to, to be a mortgagee-in-possession of, or to be an owner or operator of such Mortgaged Property within the outstanding Principal Balance meaning of the Loan plus accrued interest at Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed Servicer has also previously determined, based on its reasonable judgment and a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a prudent report prepared by an Independent a Person who regularly conducts environmental audits that the using customary industry standards, that: (1) such Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental lawslaws or, if not, that it would be in the best economic interest of the Issuer and the Noteholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and (2) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum petroleum-based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such action could be required, that it would be in the best economic interest of the Trust Fund Issuer and the Noteholders to acquire title take such actions with respect to such the affected Mortgaged Property Property. The cost of the environmental audit report contemplated by this Section 4.03 shall be advanced by the Servicer, subject to the Servicer's right to be reimbursed therefor from the Collection Account as provided in Section 5.01(c). If the Servicer determines, as described above, that it is in the best economic interest of the Issuer and further the Noteholders to take such actions as would be are necessary and appropriate to effect bring any such Mortgaged Property into compliance and/or respond with applicable environmental laws, or to take such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard action with respect to a Loan for which foreclosure proceedings are contemplatedthe containment, the Servicer will not conduct clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials affecting any such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve take such REO Property in the same manner and to such extent action as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer it deems to be in the best economic interest of the Servicer Issuer and the Certificateholders for Noteholders. The cost of any such compliance, containment, cleanup or remediation shall be advanced by the period prior Servicer, subject to the sale of such REO Property. All proceeds Servicer's right to be reimbursed therefor from the renting of such REO Property shall, net of any costs or expenses of the Servicer Collection Account as provided in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix5.01(c). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (ec) The Servicer shall not acquire for the benefit determine, with respect to each Defaulted Loan, when it has recovered, whether through trustee's sale, foreclosure sale or otherwise, all amounts it expects to recover from or on account of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer defaulted Loan, whereupon such Loan shall have requested become a "Liquidated Loan" and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) promptly deliver to the effect that the holding of Initial Noteholder a related liquidation report with respect to such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstandingLiquidated Loan.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 30 days or more delinquent and which delinquent; provided that such repurchase shall only be made if (i) the Servicer determines in good faith would otherwise become subject has a contractual right to foreclosure proceedings or any require the third party seller of such delinquent Loan as to which the Mortgagor tenders repurchase such Loan, (ii) such repurchase is made to facilitate a deed in lieu of foreclosure repurchase by such third party seller and (iii) such repurchase is made at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due DatePurchase Price. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II the Trust Fund to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II the Trust Fund to remain qualified as REMICs a REMIC under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix3.2(b)(viii). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with Except as provided in the servicing standard set forth in last two paragraphs of this Section 3.1 and with a view to the best economic interest of the Trust Fund5.12, the Servicer shall shall, on behalf of the Trust, foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the Mortgaged Properties properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.25.3. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activitiesAccepted Servicing Practices. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine that (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds proceeds of liquidation of the Loan to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority reimburse itself for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed such expense prior to the Class R Certificateholder, but only to deposit in the extent that Collection Account of such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificatesproceeds). The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any of the Servicing Fees Fee and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Collection Account for P&I with respect thereto are permitted under Section 3.35.4. Within 30 days after receipt of Liquidation Proceeds The Servicer may foreclose against the Property securing a defaulted Loan either by foreclosure, by sale or by strict foreclosure, and in respect of the event a Liquidated Loandeficiency judgment is available against the Borrower or any other person, the Servicer shall provide to the Trustee a statement of accounting may proceed for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisionsdeficiency. The Servicer shall manage, conserve, protect and operate each such REO Property for comply with the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning information reporting requirements of Section 860G(a)(8) 6050J of the Code with respect to Property that is foreclosed or abandoned, at the time and in the manner required by the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosureforeclosure (an "REO Property"), the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of the Certificate Insurer and the Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such REO Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund REMIC I until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expensessuch REO Loan becomes a Liquidated Loan. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such REO Loan shall be considered to be an outstanding Outstanding Loan, it shall be assumed that, notwithstanding : (a) Notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, and the related amortization schedule in effect at the time of any such acquisition of title (after giving effect to any previous Curtailments and before any adjustment thereto by reason of any bankruptcy or similar proceeding or any moratorium or similar waiver or grace period) shall be assumed to remain in effect, except that such schedule shall be adjusted to reflect the application of Net REO Proceeds received in any month pursuant to the succeeding clause. (eb) The Servicer Net REO Proceeds (after payment of Servicer's expenses related to disposition) from such Property received in any month shall not acquire for the benefit be deemed to have been received first in payment of the Trust Fund any personal property pursuant accrued interest that remained unpaid on the date that title to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so related REO Property was acquired by the Servicer for REMIC I, with the benefit excess thereof, if any, being deemed to have been received in respect of the Trust Fund; ordelinquent principal installments that remained unpaid on such date. Thereafter, Net REO Proceeds for such Property received in any month shall be applied to the payment of installments of principal and accrued interest on such Loan deemed to be due and payable in accordance with the terms of such Mortgage Note and such amortization schedule. If such Net REO Proceeds exceed the then Unpaid REO Amortization, the excess shall be treated as a Curtailment received in respect of such Loan. (iic) The Net REO Proceeds allocated to the payment of a related Servicing Fee shall be limited to an amount equal to the product of (x) the total amount of Net REO Proceeds allocable to interest multiplied by (y) the fraction, the numerator of which is the interest rate at which the Servicing Fee is determined and the denominator of which is the Loan Interest Rate borne by such Loan. In the event that REMIC I acquires any Property as aforesaid or otherwise in connection with a default or imminent default on a Loan, such Property shall be disposed of by or on behalf of such REMIC prior to the close of the third calendar year following the year of its acquisition unless (i) the Servicer shall have requested provided to the Trustee and received the Certificate Insurer an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding by such REMIC of such personal property Property subsequent to such period (and specifying the period beyond such period for which the Property may be held) will not cause any of the Trust REMICs to be subject to the tax on prohibited transactions imposed by Code Section 860F(a)(1), otherwise subject any of the Trust REMICs or the Trust Fund will not cause the imposition of a to tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II any of the Trust Fund REMICs to fail to qualify as a REMIC at any time that any Certificates are outstanding, or (ii) the Servicer or the Trustee (at the Servicer's expense) shall have applied for, at least 60 days prior to the expiration of the close of such third calendar year, an extension of such period in the manner contemplated by Code Section 856(e)(3), in which case the initial period shall be extended by the applicable extension period. The Servicer shall further ensure that the Property is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by REMIC I of any income from non-permitted assets as described in Code Section 860F(a)(2)(B), and that REMIC I does not derive any "net income from foreclosure property" within the meaning of Code Section 860G(c)(2) with respect to such property. In lieu of foreclosing upon any defaulted Loan, the Servicer may, in its discretion, permit the assumption of such Loan if, in the Servicer's judgment, such default is unlikely to be cured and if the assuming borrower satisfies the Servicer's underwriting guidelines with respect to mortgage loans owned by the Servicer. In connection with any such assumption, the Loan Interest Rate of the related Mortgage Note and the payment terms shall not be changed. Any fee collected by Servicer for entering into an assumption agreement will be retained by the Servicer as servicing compensation. Alternatively, the Servicer may encourage the refinancing of any defaulted Loan by the Borrower. Notwithstanding the foregoing, prior to instituting foreclosure proceedings or accepting a deed-in-lieu of foreclosure with respect to any Property, the Servicer shall make, or cause to be made, inspection of the Property in accordance with the Accepted Servicing Practices and, with respect to environmental hazards, substantially comparable to such procedures as are required by the provisions of the FNMA's selling and servicing guide applicable to single-family homes and in effect on the date hereof. The Servicer shall be entitled to rely upon the results of any such inspection made by others. In cases where the inspection reveals that such Property is potentially contaminated with or affected by hazardous wastes or hazardous substances, the Servicer shall promptly give written notice of such fact to the Certificate is outstandingInsurer, the Trustee and the Certificateholders. The Servicer shall not commence foreclosure proceedings or accept a deed-in-lieu of foreclosure for such Property without obtaining the consent of the Certificate Insurer.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; providedPROVIDED, howeverHOWEVER, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Pass- Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is not in compliance with applicable environmental laws, and or there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would not be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I I, REMIC II or REMIC II III to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I I, REMIC II and REMIC II III to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Subject to Section 3.1 and with a view to the best economic interest of the Trust Fund3.14, the Special Servicer shall repossess, foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the Mortgaged Properties assets securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to the Servicing Guidelines and the provisions of the Agreement, and which are not released from the Trust Estate pursuant to any other provision hereof, if the Special Servicer determines, in a manner consistent with the servicing standard set forth in Section 3.2. In connection with such foreclosure or other conversion3.04, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it action would be in the best economic interest of the Trust Fund to acquire title to Certificateholders. The Special Servicer shall advance the costs and expenses of any such Mortgaged Property and further to take proceeding unless it makes a determination, in its reasonable business judgment, that such actions as advance, if made, would be necessary and appropriate nonrecoverable. The Special Servicer shall be entitled to effect reimbursement of advances made pursuant to the preceding sentence from Recoveries on such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedingsLoan. If the Special Servicer otherwise becomes aware, under its customary servicing procedures, elects to proceed with a foreclosure in accordance with the laws of an environmental hazard with respect to a the state where the Loan for which foreclosure proceedings are contemplatedCollateral is located, the Special Servicer shall not be required to pursue a deficiency judgment against the related Obligor or any other liable party if the laws of the state do not permit such a deficiency judgment after such foreclosure or if the Special Servicer determines, in its best judgment, that the likely recovery if a deficiency judgment is obtained will not conduct such foreclosure proceedings unless it determines in good faith that be sufficient to warrant the liability associated with cost, time, expense or exposure of pursuing the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Propertydeficiency judgment. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that If title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, then the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. . (b) Notwithstanding any such acquisition of title and cancellation provision to the contrary contained in this Agreement, the Special Servicer shall not, on behalf of the related LoanTrust Estate, obtain title to a Mortgaged Property as a result of or in lieu of foreclosure or otherwise, and shall not otherwise acquire possession of, or take any other action with respect to, any Mortgaged Property if, as a result of any such Loan action, the Trustee, the Servicer, the Depositor, the Company or the Certificateholders, would be considered to hold title to, to be a "mortgagee-in- possession" of or to be an "owner" or "operator" of such Mortgaged Property within the meaning of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended from time to time, or any comparable law, unless the Special Servicer has previously determined in accordance with this Section 3.12, based on an Environmental Assessment report prepared by an Independent Person satisfying the requirements set forth in the first sentence of Section 3.12(c), that: (i) such Mortgaged Property is in compliance with applicable environmental laws (in the reasonable judgment of such Independent Person based upon all available information) or, if not, that it would be in the best economic interest of the Trust Estate and there would be no adverse effect on the Servicer, Special Servicer, Trustee or Depositor to take such actions as are necessary to bring such Mortgaged Property in compliance therewith, and (ii) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any Hazardous Substances for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any currently effective federal, state or local law or regulation (in the reasonable judgment of such Independent Person based upon all available information), or that, if any such Hazardous Substances are present for which such action could be required, it would be in the best economic interest of the Trust Estate and there would be no adverse effect on the Servicer, Special Servicer, Trustee or the Depositor to take such actions with respect to the affected Mortgaged Property. In the event that the Environmental Assessment first obtained by the Special Servicer with respect to a Mortgaged Property indicates that such Mortgaged Property may not be in compliance with applicable environmental laws or that Hazardous Substances may be present but does not definitively establish such fact, the Special Servicer shall (except cause such further environmental tests to be conducted by an Independent Person who regularly conducts such tests as the Special Servicer shall deem prudent to protect the interests of Certificateholders. Any such tests shall be deemed part of the Environmental Assessment obtained by the Special Servicer for purposes of this Section 9.13.12. (c) The Environmental Assessment contemplated by Section 3.12(b) shall be considered prepared by any Independent Person who regularly conducts environmental audits for purchasers of commercial property, as determined by the Special Servicer in a manner consistent with the servicing standard set forth in Section 3.04. The Special Servicer shall advise the Trustee by delivery of a certificate of a Special Servicer Officer of the cost of preparation of an Environmental Assessment, and the Trustee shall pay such cost from amounts on deposit in the Collection Account. The Trustee may rely conclusively on such certificate and shall have no duty or obligation to re-calculate the amounts stated therein. To the extent that amounts on deposit in the Collection Account are insufficient, the Special Servicer shall advance the amount of such insufficiency as an advance unless the Special Servicer makes a determination, in its reasonable business judgment, that such advance would be nonrecoverable. (d) If the Special Servicer determines pursuant to Section 3.12(b)(i) that a Mortgaged Property securing a Defaulted Loan is not in compliance with applicable environmental laws but that it is in the best economic interest of the Trust Estate to take such actions as are necessary to bring such Mortgaged Property in compliance therewith, or if the applicable Special Servicer determines pursuant to Section 3.12(b)(ii) that the circumstances referred to therein relating to Hazardous Substances are present on a Mortgaged Property securing a Defaulted Loan but that it is in the best economic interest of the Trust Estate to take such action with respect to the containment, clean-up or remediation of Hazardous Substances affecting such Mortgaged Property as is required by law or regulation, the Special Servicer shall take such action as it deems to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by best economic interest of the Trust Fund Estate and shall be reduced only by collections net of expenses. Consistent with that would not have an adverse effect on the foregoingServicer, for purposes of all calculations hereunderthe Special Servicer, so long as such Loan shall be considered to be an outstanding Loanthe Depositor, it shall be assumed the Trustee or the Certificateholders; provided that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time advance of any such acquisition action, -------- the Trustee shall mail notice to the Certificateholders and the Certificateholder Agent of title remain such proposed action, which notice shall be prepared by the Special Servicer, and if the Trustee receives, within thirty (30) days of such notification, instructions from the Directing Holders directing the Special Servicer not to take such action, then the Special Servicer shall so refrain; provided further that, if there has occurred a Depositor Event of Default, then -------- ------- the Special Servicer shall act without the instructions of the Directing Holders, unless, in effectthe case of a Depositor Event of Default under Section 6.01(a), (b) or (c) of the Trust Agreement, the Directing Holders are Independent. The Special Servicer shall advise the Trustee by delivery of an Officer's Certificate of the cost of any such compliance, containment, clean-up or remediation, and the Trustee shall pay such cost from amounts on deposit in the Collection Account. To the extent that amounts on deposit in the Collection Account are insufficient, the Special Servicer shall advance the amount of such shortfall unless the Special Servicer makes a determination, in its reasonable business judgment, that such advance, if made, would be nonrecoverable. The Special Servicer shall be entitled to reimbursement of advances made pursuant to the preceding sentence from Recoveries on such Loan. (e) The Servicer shall not acquire for report to the benefit of Internal Revenue Service and to the Trust Fund related Obligor, in the manner required by applicable law, the information required to be reported regarding any personal property pursuant to this Section 3.7 unless either: (i) such personal property Mortgaged Property or any mortgagor including regarding any Mortgaged Property that is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the abandoned or foreclosed. The Servicer shall have requested and received an Opinion concurrently deliver a copy of Counsel (which opinion shall be an expense of the Trust Fund) any such report to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.Trustee. The Special Servicer, on

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the related Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the such Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the a Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Each Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the related Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer with respect to (a) any Group I Loan, WMMSC may, at its option, repurchase any Group I Loan which is 90 days or more delinquent and which the Servicer WMMSC determines in good faith would otherwise become subject to foreclosure proceedings or any Group I Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date; and (b) any Group II Loan, AAMG may, at its option, repurchase any Group II Loan which is 30 days or more delinquent; provided that any such repurchase shall only be made if (i) the related Servicer has a contractual right to require the third party seller of such delinquent Loan to repurchase such Loan, (ii) such repurchase is made to facilitate a repurchase by such third party seller and (iii) such repurchase is made at a price equal to the Purchase Price. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is not in compliance with applicable environmental laws, and or there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would not be necessary and appropriate to effect such compliance and/or respond to such circumstances, the related Servicer will not conduct such foreclosure proceedings. If the a Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the such Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.related

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; providedPROVIDED, howeverHOWEVER, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.on

Realization Upon Defaulted Loans. (a) Consistent The Seller shall use its best efforts, consistent with Accepted Servicing Practices and the procedures that the Seller would use in servicing standard set forth in Section 3.1 and with a view loans for its own account, to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the such Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.211.01. In connection with The Seller shall use its best efforts to realize upon defaulted Loans in such foreclosure or a manner as will maximize the receipt of principal and interest by the Purchaser, taking into account, among other conversionthings, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activitiestiming of foreclosure proceedings. The foregoing is subject to the proviso that provisions that, in any case in which a Mortgaged Property shall have suffered damage, the Servicer Seller shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged toward the restoration of such property unless it shall determine in its discretion (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds proceeds of liquidation of the related Loan to Certificateholders Purchaser after reimbursement to itself for such expenses expenses, and (ii) that such expenses will be recoverable to it by the Seller through Insurance Proceeds or Liquidation Proceeds (respecting which from the related Mortgaged Property, as contemplated in Section 11.05. In the event that any payment due under any Loan is not paid when the same becomes due and payable, or in the event the Borrower fails to perform any other covenant or obligation under the Loan and such failure continues beyond any applicable grace period, the Seller shall take such action as it shall have priority deem to be in the best interest of the Purchaser. Should any Loan remain delinquent for purposes a period of withdrawal from 90 days, the Custodial Account for P&I pursuant Seller shall use Accepted Servicing Practices and refer the file to Section 3.3)foreclosure by the 120th day of delinquency. Any gain on Notification of the commencement of foreclosure or other conversion of a Liquidated Loan proceedings shall be distributed reported to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of CertificatesPurchaser. The Servicer shall Should a foreclosure sale be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loanimminent, the Servicer Seller shall provide to the Trustee obtain a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired value and issue bidding instructions in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specifyaccordance with Accepted Servicing Practices. (b) Prior Notwithstanding the foregoing provisions of this Section 11.03, with respect to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders Seller has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, the Seller shall not either (i) obtain title to such Mortgaged Property as a deed result of or in lieu of foreclosure at or otherwise, or (ii) otherwise acquire possession of, or take any other action, with respect to, such Mortgaged Property if, as a price equal result of any such action, the Purchaser would be considered to hold title to, to be a mortgagee-in-possession of, or to be an owner or operator of such Mortgaged Property within the outstanding Principal Balance meaning of the Loan plus accrued interest at Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed Seller has also previously determined, based on its reasonable judgment and a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a prudent report prepared by an Independent a Person who regularly conducts environmental audits that the using customary industry standards, that: (1) such Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental lawslaws or, and if not, that it would be in the best economic interest of the Purchaser to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and (2) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum petroleum-based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such action could be required, that it would be in the best economic interest of the Trust Fund Purchaser to acquire title take such actions with respect to such the affected Mortgaged Property and further Property. The cost of the environmental audit report contemplated by this Section 11.03 shall be advanced by the Seller, subject to the Seller’s right to be reimbursed therefor from the Custodial Account as provided in Section 11.05(vii). If the Seller determines, as described above, that it is in the best economic interest of the Purchaser to take such actions as would be are necessary and appropriate to effect bring any such Mortgaged Property into compliance and/or respond with applicable environmental laws, or to take such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard action with respect to a Loan for which foreclosure proceedings are contemplatedthe containment, the Servicer will not conduct clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials affecting any such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In , then the event that the Trust Fund acquires any real property (or personal property incident to Seller shall take such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify action as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer it deems to be in the best economic interest of the Servicer and Purchaser. The cost of any such compliance, containment, cleanup or remediation shall be advanced by the Certificateholders for the period prior Seller, subject to the sale of such REO Property. All proceeds Seller’s right to be reimbursed therefor from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to as provided in Section 3.3(b)(ix1 l.05(vii). (dc) In Proceeds received in connection with any Final Recovery Determination, as well as any recovery resulting from a partial collection of Insurance Proceeds or Liquidation Proceeds in respect of any Loan, will be applied in the event that title following order of priority: first, to reimburse the Seller for any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosurerelated unreimbursed Servicing Advances, pursuant to Section 11.05(iii); second, to accrued and unpaid interest on the deed or certificate of sale shall be issued Loan, to the Trusteedate of the Final Recovery Determination, or to its nominee the Due Date prior to the Distribution Date on behalf which such amounts are to be distributed if not in connection with a Final Recovery Determination; and third, as a recovery of Certificateholders. Notwithstanding any such acquisition of title and cancellation principal of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of offered Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all 101 amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of offered Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 30 days or more delinquent and which delinquent; provided that such repurchase shall only be made if (i) the Servicer determines in good faith would otherwise become subject has a contractual right to foreclosure proceedings or any require the third party seller of such delinquent Loan as to which the Mortgagor tenders repurchase such Loan, (ii) such repurchase is made to facilitate a deed in lieu of foreclosure repurchase by such third party seller and (iii) such repurchase is made at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due DatePurchase Price. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either any of REMIC I I, REMIC II or REMIC II III to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I I, REMIC II and REMIC II III to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix3.3(b)(viii). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either any of REMIC I I, REMIC II or REMIC II III of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.,

Realization Upon Defaulted Loans. (a) Consistent The Servicer shall use its best efforts, consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, procedures that the Servicer shall would use in servicing loans for its own account, to foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the such Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.24.01. In connection with The Servicer shall use its best efforts to realize upon Defaulted Loans in such a manner as will maximize the receipt of principal and interest by the Issuer, taking into account, among other things, the timing of foreclosure or other conversionproceedings; provided, however, that the Servicer shall follow such practices and procedures as not sell any Defaulted Loan unless it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activitieshas been directed to do so by the Majority Noteholder. The foregoing is subject to the proviso that provisions that, in any case in which Mortgaged Property shall have suffered damage, the Servicer shall not be required to expend its own funds toward the restoration of such property in connection with any foreclosure or to restore any damaged property excess of $2,000 unless it shall determine in its discretion (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds proceeds of liquidation of the related Loan to Certificateholders the Issuer after reimbursement to itself for such expenses expenses, and (ii) that such expenses will be recoverable to it by the Servicer through Mortgage Insurance Proceeds or Liquidation Proceeds (respecting which from the related Mortgaged Property. In the event that any payment due under any Loan is not paid when the same becomes due and payable, or in the event the Borrower fails to perform any other covenant or obligation under the Loan and such failure continues beyond any applicable grace period, the Servicer shall take such action as it shall have priority for purposes of withdrawal from deem to be in the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders best interest of the other Classes of CertificatesIssuer and the Noteholders. The Servicer shall notify the Issuer and the Noteholders in writing of the commencement of foreclosure proceedings. In such connection, the Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specifyMortgaged Property. (b) Prior Notwithstanding the foregoing provisions of this Section 4.03, with respect to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders Servicer has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property the Servicer shall not either (i) obtain title to such Mortgaged Property as a deed result of or in lieu of foreclosure at or otherwise, or (ii) otherwise acquire possession of, or take any other action, with respect to, such Mortgaged Property if, as a price equal result of any such action, the Issuer would be considered to hold title to, to be a mortgagee-in-possession of, or to be an owner or operator of such Mortgaged Property within the outstanding Principal Balance meaning of the Loan plus accrued interest at Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed Servicer has also previously determined, based on its reasonable judgment and a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a prudent report prepared by an Independent a Person who regularly conducts environmental audits that the using customary industry standards, that: (1) such Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental lawslaws or, if not, that it would be in the best economic interest of the Issuer and there the Noteholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and (2) there, are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum petroleum-based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such action could be required, that it would be in the best economic interest of the Trust Fund Issuer and the Noteholders to acquire title take such actions with respect to such the affected Mortgaged Property Property. The cost of the environmental audit report contemplated by this Section 4.03 shall be advanced by the Servicer, subject to the Servicer's right to be reimbursed therefor from the Collection Account as provided in Section 5.01(c). If the Servicer determines, as described above, that it is in the best economic interest of the Issuer and further the Noteholders to take such actions as would be are necessary and appropriate to effect bring any such Mortgaged Property into compliance and/or respond with applicable environmental laws, or to take such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard action with respect to a Loan for which foreclosure proceedings are contemplatedthe containment, the Servicer will not conduct clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials affecting any such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve take such REO Property in the same manner and to such extent action as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer it deems to be in the best economic interest of the Servicer Issuer and the Certificateholders for Noteholders. The cost of any such compliance, containment, cleanup or remediation shall be advanced by the period prior Servicer, subject to the sale of such REO Property. All proceeds Servicer's right to be reimbursed therefor from the renting of such REO Property shall, net of any costs or expenses of the Servicer Collection Account as provided in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix5.01(c). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (ec) The Servicer shall not acquire for the benefit determine, with respect to each Defaulted Loan, when it has recovered, whether through trustee's sale, foreclosure sale or otherwise, all amounts it expects to recover from or on account of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer Defaulted Loan, whereupon such Loan shall have requested become a "Liquidated Loan" and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) promptly deliver to the effect that the holding of Initial Noteholder a related liquidation report with respect to such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstandingLiquidated Loan.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the The Master Servicer shall use reasonable efforts to realize upon Defaulted Loans, in such manner as in the Master Servicer’s judgment will maximize the receipt of principal and interest by the Trustee. The Master Servicer is obligated to make every effort it deems reasonable to work out a troubled Loan before proposing foreclosure, a deed in lieu of foreclosure, a pre-foreclosure sale or other remedial action. The Master Servicer shall use reasonable efforts to foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activitiespayments. The foregoing is subject to the proviso that provisions that, in any case in which Mortgaged Property shall have suffered damage, the Master Servicer shall not be required to expend its own funds in connection with any foreclosure or toward the restoration of such Mortgaged Property. The decision of the Master Servicer to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain foreclose on foreclosure or other conversion of a Liquidated Defaulted Loan shall be distributed subject to a determination by the Class R Certificateholder, but only to Master Servicer that the extent that proceeds of such gain is not necessary to make distributions to foreclosure would exceed the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses of bringing such a proceeding. The proceeds from any liquidation of a Mortgage Loan will be applied in the following order of priority: first, to reimburse the Master Servicer for any related unreimbursed Servicing Advances and Servicing Fees with respect to the related Loan; second, to reimburse the Trustee for any amounts incurred by it in any connection with such proceedingsLoan; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any)third, to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) accrued and unpaid interest on the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Net Loan Rate to the next Due DateDate occurring in the month in which such amounts are required to be distributed; and fourth, as a recovery of principal of such Loan. Any such repurchase shall be deemed In the event that, as a Principal Prepayment for purposes result of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default the exercise of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard remedies with respect to a Loan for which foreclosure proceedings are contemplatedLoan, the Trust becomes the owner of real estate, the Master Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loanimmediately commence appropriate procedures, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any the Trust, to liquidate such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effectreal estate. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I I, REMIC II or REMIC II III to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I I, REMIC II and REMIC II III to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I I, REMIC II or REMIC II III of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of offered Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; providedPROVIDED, howeverHOWEVER, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix3.3(b)(viii). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in 66 the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; providedPROVIDED, howeverHOWEVER, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, ,management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.of

Realization Upon Defaulted Loans. (a) Consistent The Servicer shall use its best efforts, consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, procedures that the Servicer shall would use in servicing loans for its own account, to foreclose upon or otherwise comparably convert (which may include acquisition the ownership of an REO Property) the such Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.24.01. In connection with The Servicer shall use its best efforts to realize upon Defaulted Loans in such a manner as will maximize the receipt of principal and interest by the Issuer, taking into account, among other things, the timing of foreclosure or other conversionproceedings; provided, however, that the Servicer shall follow such practices and procedures as not sell any Defaulted Loan unless it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activitieshas been directed to do so by the Majority Noteholder. The foregoing is subject to the proviso that provisions that, in any case in which Mortgaged Property shall have suffered damage, the Servicer shall not be required to expend its own funds toward the restoration of such property in connection with any foreclosure or to restore any damaged property excess of $2,000 unless it shall determine in its discretion (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds proceeds of liquidation of the related Loan to Certificateholders the Issuer after reimbursement to itself for such expenses expenses, and (ii) that such expenses will be recoverable to it by the Servicer through Mortgage Insurance Proceeds or Liquidation Proceeds (respecting which from the related Mortgaged Property. In the event that any payment due under any Loan is not paid when the same becomes due and payable, or in the event the Borrower fails to perform any other covenant or obligation under the Loan and such failure continues beyond any applicable grace period, the Servicer shall take such action as it shall have priority for purposes of withdrawal from deem to be in the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders best interest of the other Classes of CertificatesIssuer and the Noteholders. The Servicer shall notify the Issuer and the Noteholders in writing of the commencement of foreclosure proceedings. In such connection, the Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specifyMortgaged Property. (b) Prior Notwithstanding the foregoing provisions of this Section 4.03, with respect to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders Servicer has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property the Servicer shall not either (i) obtain title to such Mortgaged Property as a deed result of or in lieu of foreclosure at or otherwise, or (ii) otherwise acquire possession of, or take any other action, with respect to, such Mortgaged Property if, as a price equal result of any such action, the Issuer would be considered to hold title to, to be a mortgagee-in-possession of, or to be an owner or operator of such Mortgaged Property within the outstanding Principal Balance meaning of the Loan plus accrued interest at Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed Servicer has also previously determined, based on its reasonable judgment and a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a prudent report prepared by an Independent a Person who regularly conducts environmental audits that the using customary industry standards, that: (1) such Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental lawslaws or, if not, that it would be in the best economic interest of the Issuer and the Noteholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and (2) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum petroleum-based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such action could be required, that it would be in the best economic interest of the Trust Fund Issuer and the Noteholders to acquire title take such actions with respect to such the affected Mortgaged Property Property. The cost of the environmental audit report contemplated by this Section 4.03 shall be advanced by the Servicer, subject to the Servicer’s right to be reimbursed therefor from the Collection Account as provided in Section 5.01(c). If the Servicer determines, as described above, that it is in the best economic interest of the Issuer and further the Noteholders to take such actions as would be are necessary and appropriate to effect bring any such Mortgaged Property into compliance and/or respond with applicable environmental laws, or to take such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard action with respect to a Loan for which foreclosure proceedings are contemplatedthe containment, the Servicer will not conduct clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials affecting any such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve take such REO Property in the same manner and to such extent action as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer it deems to be in the best economic interest of the Servicer Issuer and the Certificateholders for Noteholders. The cost of any such compliance, containment, cleanup or remediation shall be advanced by the period prior Servicer, subject to the sale of such REO Property. All proceeds Servicer’s right to be reimbursed therefor from the renting of such REO Property shall, net of any costs or expenses of the Servicer Collection Account as provided in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix5.01(c). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (ec) The Servicer shall not acquire for the benefit determine, with respect to each Defaulted Loan, when it has recovered, whether through trustee’s sale, foreclosure sale or otherwise, all amounts it expects to recover from or on account of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer Defaulted Loan, whereupon such Loan shall have requested become a “Liquidated Loan” and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) promptly deliver to the effect that the holding of Noteholder Agent a related liquidation report with respect to such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstandingLiquidated Loan.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 30 days or more delinquent and which delinquent; provided that such repurchase shall only be made if (i) the Servicer determines in good faith would otherwise become subject has a contractual right to foreclosure proceedings or any require the third party seller of such delinquent Loan as to which the Mortgagor tenders repurchase such Loan, (ii) such repurchase is made to facilitate a deed in lieu of foreclosure repurchase by such third party seller and (iii) such repurchase is made at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due DatePurchase Price. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I I, REMIC II, REMIC III or REMIC II IV to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I I, REMIC II, REMIC III and REMIC II IV to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix3.3(b)(viii). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I I, REMIC II, REMIC III or REMIC II IV of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.

Realization Upon Defaulted Loans. (a) Consistent with the servicing standard set forth in Section 3.1 and with a view to the best economic interest of the Trust Fund, the Servicer shall foreclose upon or otherwise comparably convert (which may include acquisition of an REO Property) the Mortgaged Properties securing such of the Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.2. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities. The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or to restore any damaged property unless it shall determine (i) that such foreclosure and/or restoration expenses will increase the Liquidation Proceeds to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawal from the Custodial Account for P&I pursuant to Section 3.3). Any gain on foreclosure or other conversion of a Liquidated Loan shall be distributed to the Class R Certificateholder, but only to the extent that such gain is not necessary to make distributions to the Certificateholders of the other Classes of Certificates. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as any Servicing Fees and other amounts due it, if any), to the extent, but only to the extent, that withdrawals from the Custodial Account for P&I with respect thereto are permitted under Section 3.3. Within 30 days after receipt of Liquidation Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the Trustee a statement of accounting for the related Liquidated Loan, including without limitation (i) the Loan number, (ii) the date the Loan was acquired in foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan, (iii) the gross sales price and the related selling and other expenses, (iv) accrued interest calculated from the foreclosure date to the liquidation date, and (v) such other information as the Trustee may reasonably specify. (b) Prior to any such foreclosure, the Servicer may, at its option, repurchase any Loan which is 90 days or more delinquent and which the Servicer determines in good faith would otherwise become subject to foreclosure proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of foreclosure at a price equal to the outstanding Principal Balance of the Loan plus accrued interest at the applicable Pass-Through Rate to the next Due Date. Any such repurchase shall be deemed a Principal Prepayment for purposes of this Agreement and all amounts in respect thereof shall be deposited into the Custodial Account for P&I pursuant to Section 3.2(b). (c) The Trust Fund shall not acquire any real property (or personal property incident to such real property) except in connection with a default or imminent default of a Loan. Based on a report prepared by an Independent Person who regularly conducts environmental audits that the Mortgaged Property for which foreclosure proceedings are contemplated is in compliance with applicable environmental laws, and there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials, wastes, or petroleum based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or that it would be in the best economic interest of the Trust Fund to acquire title to such Mortgaged Property and further to take such actions as would be necessary and appropriate to effect such compliance and/or respond to such circumstances, the Servicer will not conduct such foreclosure proceedings. If the Servicer otherwise becomes aware, under its customary servicing procedures, of an environmental hazard with respect to a Loan for which foreclosure proceedings are contemplated, the Servicer will not conduct such foreclosure proceedings unless it determines in good faith that the liability associated with the environmental hazard will be less than the Liquidation Proceeds to be realized from the sale of the related Mortgaged Property. In the event that the Trust Fund acquires any real property (or personal property incident to such real property) in connection with a default or imminent default of a Loan, such REO Property shall be disposed of by the Trust Fund within three years after its acquisition by the Trust Fund unless the Trustee shall have received from the Servicer an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition will not cause either REMIC I or REMIC II to fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC I Regular Interests or Certificates are outstanding, in which case such REO Property shall be disposed of as soon as possible by the Trust Fund but in no event shall be held longer than the maximum period of time during which the Trust Fund is then permitted to hold such REO Property and allow REMIC I and REMIC II to remain qualified as REMICs under the REMIC Provisions. The Servicer shall manage, conserve, protect and operate each such REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. All proceeds from the renting of such REO Property shall, net of any costs or expenses of the Servicer in connection therewith, be deposited into the Custodial Account for P&I pursuant to Section 3.3(b)(ix). (d) In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of the related Loan, such Loan shall (except for purposes of Section 9.1) be considered to be a Loan held in the Trust Fund until such time as the related REO Property shall be sold by the Trust Fund and shall be reduced only by collections net of expenses. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Loan shall be considered to be an outstanding Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and, for purposes of determining the Scheduled Principal Balance thereof, the related amortization schedule in effect at the time of any such acquisition of title remain in effect. (e) The Servicer shall not acquire for the benefit of the Trust Fund any personal property pursuant to this Section 3.7 unless either: (i) such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for the benefit of the Trust Fund; or (ii) the Servicer shall have requested and received an Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to the effect that the holding of such personal property by the Trust Fund will not cause the imposition of a tax on the Trust Fund under the REMIC Provisions or cause either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding.of