CUSTODIAL AGREEMENT



      CUSTODIAL AGREEMENT (as amended, restated, supplemented or otherwise

modified and in effect from time to time, this "Custodial Agreement"), dated as

of January 27, 2006, made by and among:



      (i) AMERICAN HOME MORTGAGE CORP., a New York corporation, AMERICAN HOME

MORTGAGE INVESTMENT CORP., a Maryland corporation, AMERICAN HOME MORTGAGE

HOLDINGS, INC., a Delaware corporation, AMERICAN HOME MORTGAGE ACCEPTANCE, INC.,

a Maryland corporation, and AMERICAN HOME MORTGAGE SERVICING, INC., a Maryland

corporation, (each a "Seller", collectively the "Sellers");



      (ii) MORGAN STANLEY BANK (the "Buyer Agent"); and



      (iii) DEUTSCHE BANK NATIONAL TRUST COMPANY, as custodian for the Buyer

Agent pursuant to this Custodial Agreement (in such capacity, the "Custodian").



                                    RECITALS



      The Buyer Agent, the Custodian and the Sellers are parties to that certain

Amended and Restated Custodial Agreement, dated as of November 26, 2003 (as

amended, supplemented or otherwise modified prior to the date hereof, the

"Existing Custodial Agreement").



      The Sellers and the Buyer Agent are parties to that certain Master

Repurchase Agreement, dated as of the date hereof (as amended, restated,

supplemented or otherwise modified and in effect from time to time, the

"Repurchase Agreement"), pursuant to which the Buyers have agreed, subject to

the terms and conditions of the Repurchase Agreement, to purchase Eligible

Mortgage Loans (as defined therein) from the Sellers. The Repurchase Agreement

is being entered into in substitution for that certain Amended and Restated

Master Loan and Security Agreement, dated as of November 26, 2003, among the

parties thereto.



      It is a condition precedent to the effectiveness of the Repurchase

Agreement, and the Sellers, the Custodian and the Buyer Agent have agreed, that

this Custodial Agreement shall be substituted for the Existing Custodial

Agreement.



      Accordingly, the Sellers, the Custodian and the Buyer Agent hereby agree,

in consideration of the mutual premises and mutual obligations set forth herein,

that this Custodial Agreement is entered into in substitution for the Existing

Custodial Agreement, and in furtherance of the foregoing agree as follows:



Section 1.  Definitions.



      Unless otherwise defined herein, terms defined in the Repurchase Agreement

shall have their respective assigned meanings when used herein, and the

following terms shall have the following meanings:



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      "Affiliate" shall mean (i) with respect to the Buyer Agent, MS & Co. and

Morgan Stanley Dean Witter & Co., and (ii) with respect to any other Person, any

"affiliate" of such Person as such term is defined in the United States

Bankruptcy Code in effect from time to time.



      "Agency" shall mean Fannie Mae or Freddie Mac.



      "Agency Guide" shall mean, with respect to Fannie Mae securities, the

Fannie Mae Selling Guide and the Fannie Mae Servicing Guide, with respect to

Freddie Mac securities, the Freddie Mac Sellers' and Servicers' Guide, and with

respect to California Program securities, the applicable program manual and the

servicer's guide, in each case including all exhibits thereto, as such Agency

Guide may be amended, supplemented or otherwise modified from time to time."



      "Agency Program" shall mean a specific mortgage backed securities swap or

purchase program under the relevant Agency Guide or as otherwise approved by the

Agency with respect to Mortgage Loans originated pursuant to the Agency Guide.



      "Assignment of Mortgage" means, with respect to any mortgage, an

assignment of the mortgage, notice of transfer or equivalent instrument in

recordable form, sufficient under the laws of the jurisdiction wherein the

related mortgaged property is located to reflect the assignment and pledge of

the mortgage.



      "Authorized Representative" shall have the meaning specified in Section 18

hereof.



      "Business Day" shall mean any day other than (i) a Saturday or Sunday or

(ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of New

York or the Custodian is authorized or obligated by law or executive order to be

closed.



      "Cooperative Corporation" shall mean the cooperative apartment corporation

that holds legal title to a Cooperative Project and grants occupancy rights to

units therein to stockholders through Proprietary Leases or similar

arrangements.



      "Cooperative Mortgage Loan" shall mean a Mortgage Loan that is secured by

a first lien on a perfected security interest in Cooperative Shares and the

related Proprietary Lease granting exclusive rights to occupy the related

Cooperative Unit in the building owned by the related Cooperative Corporation.



      "Cooperative Project" shall mean all real property owned by a Cooperative

Corporation including the land, separate dwelling units and all common elements.



      "Cooperative Shares" shall mean the shares of stock issued by a

Cooperative Corporation and allocated to a Cooperative Unit and represented by a

stock certificate.



      "Cooperative Unit" shall mean a specific unit in a Cooperative Project.



      "Custodial Agreement" shall mean this Custodial Agreement, as the same

shall be amended, restated, supplemented or otherwise modified and in effect

from time to time in accordance with the terms hereof.





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<PAGE>



      "Custodial Delivery Failure" shall have the meaning assigned to such term

in Section 13(c).



      "Custodial Identification Certificate" shall mean the certificate executed

by the Sellers in connection with the sale of Eligible Mortgage Loans to the

Buyers to be held by the Custodian pursuant to this Custodial Agreement, a form

of which is attached as Annex 3 hereto.



      "Electronic Agent" shall have the meaning assigned to such term in Section

2 of the Electronic Tracking Agreement.



      "Electronic Tracking Agreement" shall mean the Electronic Tracking

Agreement, dated as of the date hereof, among the Sellers, the Buyer Agent, the

Electronic Agent and MERS, as the same shall be amended, restated, supplemented

or otherwise modified and in effect from time to time.



      "Eligible Cooperative Mortgage Loan" shall mean a Cooperative Mortgage

Loan as to which the representations and warranties in Section 6.11 of the

Repurchase Agreement and the eligibility criteria set forth in Part I of

Schedule 1 of the Repurchase Agreement are correct.



      "Eligible Mortgage Loan" shall mean a Mortgage Loan secured by a first

mortgage lien on a one-to-four family residential property (a) as to which the

representations and warranties in Section 6.10 and Part I of Schedule 1 of the

Repurchase Agreement are correct and (b) which is either an Agency Eligible

Mortgage Loan, an Alternate `A' Mortgage Loan, a California Program Mortgage

Loan, an Eligible Cooperative Mortgage Loan, a Jumbo Mortgage Loan, a MERS

Designated Mortgage Loan or a Conduit Eligible Mortgage Loan; provided, that in

no event shall any Eligible Mortgage Loan be a security for purposes of any

securities or blue sky laws.



      "Exception" shall mean, with respect to any Mortgage Loan, any of the

following: the variances from the requirements of Section 2 hereof with respect

to the Mortgage Files (giving effect to the Sellers' right to deliver certified

copies in lieu of original documents in certain circumstances).



      "MERS Designated Mortgage Loan" shall have the meaning assigned to such

term in Section 3 of the Electronic Tracking Agreement.



      "MERS Identification Number" shall mean the eighteen digit number

permanently assigned to each MERS Designated Mortgage Loan.



      "MERS Procedures Manual" shall mean the MERS Procedures Manual attached as

Exhibit B to the Electronic Tracking Agreement, as it may be amended,

supplemented or modified from time to time.



      "MERS Report" shall mean the schedule listing MERS Designated Mortgage

Loans and other information prepared by the Electronic Agent pursuant to the

Electronic Tracking Agreement.





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<PAGE>



      "MERS(R) System" shall mean the Electronic Agent's mortgage electronic

registry system, as more particularly described in the MERS Procedures Manual."



      "Mortgage File" shall mean, as to each Mortgage Loan, those documents

listed in Section 2 of this Custodial Agreement that are delivered to the

Custodian or which at any time come into the possession of the Custodian.



      "Mortgage Loan" shall mean a mortgage loan which the Custodian has been

instructed to hold for the Buyer Agent pursuant to this Custodial Agreement.



      "Mortgage Loan Schedule" shall mean a list (in computer readable form) of

Eligible Mortgage Loans to be sold pursuant to the Repurchase Agreement,

attached to a Custodial Identification Certificate, setting forth, as to each

Eligible Mortgage Loan, the applicable information specified on Annex 1 to this

Custodial Agreement.



      "Mortgage Loan Schedule and Exception Report" shall mean a list of

Eligible Mortgage Loans delivered by the Custodian to the Buyer Agent on each

Business Day, reflecting the Mortgage Loans held by the Custodian for the

benefit of the Buyer Agent on behalf of the Buyers, which includes codes

indicating any Exceptions with respect to each Mortgage Loan listed thereon.

Each Mortgage Loan Schedule and Exception Report shall set forth (a) the

Mortgage Loans being sold to the Buyers on any applicable Purchase Date as well

as the Mortgage Loans previously sold to the Buyers and held by the Custodian

hereunder, (b) any Mortgage Loan that has been released to a Seller pursuant to

Section 5 hereof and the date such Mortgage Loan was released and (c) all

Exceptions with respect thereto, with any updates thereto from the time last

delivered.

      "Officer's Certificate" shall mean a certificate signed by a Responsible

Officer of the Person delivering such certificate and delivered as required by

this Custodial Agreement.



      "Opinion of Counsel" shall mean a written opinion letter of counsel in

form and substance reasonably acceptable to the party receiving such opinion

letter.



      "Pledgee" shall have the meaning specified in Section 25 hereof.



      "Proceeds" shall mean whatever is receivable or received when Purchased

Items or proceeds are sold, collected, exchanged or otherwise disposed of,

whether such disposition is voluntary or involuntary, and includes, without

limitation, all rights to payment, including return premiums, with respect to

any insurance relating thereto.



      "Proprietary Lease" shall mean a lease on (or occupancy agreement with

respect to) a Cooperative Unit evidencing the possessory interest of the owner

of the Cooperative Shares or the Seller in such Cooperative Unit.



      "Recognition Agreement" shall mean, with respect to a Cooperative Mortgage

Loan, an agreement executed by a Cooperative Corporation which, among other

things, acknowledges the lien of the Mortgage on the Mortgaged Property in

question.





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<PAGE>



      "Report" shall mean a report in computer readable form prepared by the

Custodian, which shall be in a form acceptable to the Buyer Agent and the

Custodian detailing, with respect to any Mortgage Loan that has been released by

the Custodian, the following: (i) the Mortgage Loan identification number and

borrower name, (ii) the location to which such Mortgage File was delivered by

the Custodian and (iii) the date on which such Mortgage File was released by the

Custodian.



      "Review Procedures" shall have the meaning specified in Section 3(c)

hereof.



      "Security Agreement" the specific security agreement creating a security

interest on and pledge of the Cooperative Shares and the appurtenant Proprietary

Lease securing a Cooperative Mortgage Loan.



      "Trust Receipt" shall mean a Trust Receipt in the form annexed hereto as

Annex 2 delivered to the Buyer Agent by the Custodian covering all of the

Mortgage Loans subject to this Custodial Agreement from time to time, as

reflected on the Mortgage Loan Schedule and Exception Report attached thereto in

accordance with Section 3(e).



Section 2.  Delivery of Mortgage Files.



      No later than 11:00 p.m., New York City time, one (1) Business Day prior

to any Purchase Date (in the case of the first 150 Eligible Mortgage Loans

delivered in connection with any Purchase Date) plus one additional Business Day

prior to any Purchase Date (for each additional 100 Eligible Mortgage Loans in

excess thereof delivered in connection with any Purchase Date) (provided, that,

such timing requirements shall be inapplicable in the case of Mortgage Loans

already held by the Custodian for any other reason), the applicable Seller shall

release to the Custodian the following original documents pertaining to each

Eligible Mortgage Loan to be sold to the Buyers and included in the Margin Base

on such Purchase Date, each of which Mortgage Loans shall be identified in a

Mortgage Loan Schedule delivered therewith, in a computer readable format

acceptable to the Sellers and the Custodian, with a copy of such Mortgage Loan

Schedule delivered to the Buyer Agent (or, if another time is specified below

for such release or delivery, at such other time):



      (A)   With respect to each Eligible Mortgage Loan:



            (a)   The original Mortgage Note bearing all intervening

                  endorsements, endorsed "Pay to the order of _________ without

                  recourse" and signed in the name of the last endorsee (the

                  "Last Endorsee") (in the event that the Mortgage Loan was

                  acquired by the Last Endorsee in a merger, the signature must

                  be in the following form: "[Last Endorsee], successor by

                  merger to [name of predecessor]"; in the event that the

                  Mortgage Loan was acquired or originated by the Last Endorsee

                  while doing business under another name, the signature must be

                  in the following form: "[Last Endorsee], formerly known as

                  [previous name]").



            (b)   The original of the guarantee executed in connection with the

                  Mortgage Note (if any).





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<PAGE>



            (c)   The original Mortgage with evidence of recording thereon, or a

                  copy thereof together with an Officer's Certificate of the

                  applicable Seller, title company, escrow agent or closing

                  attorney certifying that such represents a true and correct

                  copy of the original and that such original has been submitted

                  for recordation in the appropriate governmental recording

                  office of the jurisdiction where the Mortgaged Property is

                  located.



            (d)   The originals of all assumption, modification, consolidation

                  or extension agreements (if any) with evidence of recording

                  thereon, or copies thereof together with an Officer's

                  Certificate of the applicable Seller, title company, escrow

                  agent or closing attorney certifying that such represent true

                  and correct copies of the originals and that such originals

                  have each been submitted for recordation in the appropriate

                  governmental recording office of the jurisdiction where the

                  Mortgaged Property is located (provided, that the Custodian

                  shall have no duty to verify whether any such documents

                  exist).



            (e)   Except in the case of a MERS Designated Mortgage Loan, the

                  original Assignment of Mortgage in blank for each Mortgage

                  Loan, in form and substance acceptable for recording and

                  signed in the name of the Last Endorsee (in the event that the

                  Mortgage Loan was acquired by the Last Endorsee in a merger,

                  the signature must be in the following form: "[Last Endorsee],

                  successor by merger to [name of predecessor]"; in the event

                  that the Mortgage Loan was acquired or originated while doing

                  business under another name, the signature must be in the

                  following form: "[Last Endorsee], formerly known as [previous

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