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Pooling and Servicing Agreement

 

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Title:

Pooling and Servicing Agreement

Entities:

ACE Securities Corp Home Equity Loan Trust Series 2004 FM1; Freddie Mac; McGraw-Hill Companies Inc.; National Westminster Bank plc; Wells Fargo Bank Minnesota, NA; Federal National Mortgage Association

Date:

2004

Size:

Preview shows 64KB of 860KB total

Price:

$99

ID:

#1490535

 

 

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Start of Preview

 

<SEQUENCE>3

<FILENAME>d202547.txt

<DESCRIPTION>INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS

<TEXT>

                              ACE SECURITIES CORP.

                                    Depositor





                               THE PROVIDENT BANK

                                    Servicer





                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION

                  Master Servicer and Securities Administrator





                                  HSBC BANK USA

                                     Trustee















         --------------------------------------------------------------





                         POOLING AND SERVICING AGREEMENT



                           Dated as of January 1, 2004



         --------------------------------------------------------------









          ACE Securities Corp. Home Equity Loan Trust, Series 2004-FM1

                     Asset Backed Pass-Through Certificates











<PAGE>







<TABLE>

<CAPTION>







                                                     ARTICLE I



                                                    DEFINITIONS

<S>               <C>

SECTION 1.01.     Defined Terms.................................................................................-4-

                           Accepted Master Servicing Practices..................................................-4-

                           Accepted Servicing Practices.........................................................-4-

                           Account  ............................................................................-4-

                           Accrued Certificate Interest.........................................................-4-

                           Adjustable Rate Mortgage Loan........................................................-4-

                           Adjustment Date......................................................................-5-

                           Administration Fees..................................................................-5-

                           Administration Fee Rate..............................................................-5-

                           Advance Facility.....................................................................-5-

                           Affiliate............................................................................-5-

                           Aggregate Loss Severity Percentage...................................................-5-

                           Agreement............................................................................-5-

                           Amounts Held for Future Distribution.................................................-5-

                           Assignment...........................................................................-5-

                           Available Distribution Amount........................................................-5-

                           Balloon Mortgage Loan................................................................-6-

                           Balloon Payment......................................................................-6-

                           Bankruptcy Code......................................................................-6-

                           Book-Entry Certificate...............................................................-6-

                           Book-Entry Custodian.................................................................-6-

                           Business Day.........................................................................-6-

                           Cap Contracts........................................................................-6-

                           Cash-Out Refinancing.................................................................-7-

                           Certificate..........................................................................-7-

                           Certificate Factor...................................................................-7-

                           Certificate Margin...................................................................-7-

                           Certificateholder" or "Holder........................................................-8-

                           Certificate Owner....................................................................-9-

                           Certificate Principal Balance........................................................-9-

                           Certificate Register.................................................................-9-

                           Class    ............................................................................-9-

                           Class A Certificate..................................................................-9-

                           Class A Principal Distribution Amount................................................-9-

                           Class A-1/A-3 Allocation Percentage..................................................-9-

                           Class A-1 Certificate................................................................-9-

                           Class A-1/A-3 Principal Distribution Amount..........................................-9-

                           Class A-2 Allocation Percentage.....................................................-10-

                           Class A-2A Certificate..............................................................-10-

                           Class A-2B Certificate..............................................................-10-

</TABLE>





                                                       -ii-



<PAGE>





<TABLE>

<CAPTION>



<S>               <C>

                           Class A-2C Certificate..............................................................-10-

                           Class A-2 Principal Distribution Amount.............................................-10-

                           Class A-3 Certificate...............................................................-11-

                           Class B Certificate.................................................................-11-

                           Class B-1A Certificate..............................................................-11-

                           Class B-1B Certificate..............................................................-11-

                           Class B Principal Distribution Amount...............................................-11-

                           Class CE Certificate................................................................-12-

                           Class M Certificates................................................................-12-

                           Class M-1 Certificate...............................................................-12-

                           Class M-1 Principal Distribution Amount.............................................-12-

                           Class M-2 Certificate...............................................................-12-

                           Class M-2 Principal Distribution Amount.............................................-12-

                           Class M-3 Certificate...............................................................-13-

                           Class M-3 Principal Distribution Amount.............................................-13-

                           Class M-4 Certificate...............................................................-13-

                           Class M-4 Principal Distribution Amount.............................................-13-

                           Class M-5 Certificate...............................................................-14-

                           Class M-5 Principal Distribution Amount.............................................-14-

                           Class M-6 Certificate...............................................................-14-

                           Class M-6 Principal Distribution Amount.............................................-14-

                           Class P Certificate.................................................................-15-

                           Class R Certificates................................................................-15-

                           Class R-I Interest..................................................................-15-

                           Class R-II Interest.................................................................-15-

                           Closing Date........................................................................-15-

                           Code     ...........................................................................-15-

                           Collection Account..................................................................-15-

                           Commission..........................................................................-15-

                           Corporate Trust Office..............................................................-16-

                           Corresponding Certificate...........................................................-16-

                           Credit Enhancement Percentage.......................................................-16-

                           Credit Risk Management Agreement....................................................-16-

                           Credit Risk Management Fee..........................................................-16-

                           Credit Risk Management Fee Rate.....................................................-17-

                           Credit Risk Manager.................................................................-17-

                           Custodial Agreement.................................................................-17-

                           Custodian...........................................................................-17-

                           Cut-off Date........................................................................-17-

                           Debt Service Reduction..............................................................-17-

                           Deficient Valuation.................................................................-17-

                           Definitive Certificates.............................................................-17-

                           Deleted Mortgage Loan...............................................................-17-

                           Delinquency Percentage..............................................................-17-

                           Depositor...........................................................................-17-

                           Depository..........................................................................-18-

</TABLE>





                                                       -iii-



<PAGE>



<TABLE>

<CAPTION>



<S>               <C>

                           Depository Institution..............................................................-18-

                           Depository Participant..............................................................-18-

                           Determination Date..................................................................-18-

                           Directly Operate....................................................................-18-

                           Disqualified Organization...........................................................-18-

                           Distribution Account................................................................-19-

                           Distribution Date...................................................................-19-

                           Due Date ...........................................................................-19-

                           Due Period..........................................................................-19-

                           Eligible Account....................................................................-19-

                           ERISA    ...........................................................................-19-

                           Estate in Real Property.............................................................-19-

                           Excess Liquidation Proceeds.........................................................-19-

                           Expense Adjusted Mortgage Rate......................................................-19-

                           Extraordinary Trust Fund Expense....................................................-20-

                           Extra Principal Distribution Amount.................................................-20-

                           Fannie Mae..........................................................................-20-

                           FDIC     ...........................................................................-20-

                           Final Recovery Determination........................................................-20-

                           Freddie Mac.........................................................................-20-

                           Global Certificate..................................................................-20-

                           Gross Margin........................................................................-20-

                           Group I Interest Remittance Amount..................................................-20-

                           Group I Mortgage Loans..............................................................-20-

                           Group I Principal Distribution Amount...............................................-21-

                           Group I Principal Remittance Amount.................................................-21-

                           Group II  Interest Remittance Amount................................................-21-

                           Group II Mortgage Loans.............................................................-21-

                           Group II Principal Distribution Amount..............................................-21-

                           Group II Principal Remittance Amount................................................-22-

                           Independent.........................................................................-22-

                           Independent Contractor..............................................................-22-

                           Index    ...........................................................................-22-

                           Insurance Proceeds..................................................................-22-

                           Interest Accrual Period.............................................................-23-

                           Interest Carry Forward Amount.......................................................-23-

                           Interest Determination Date.........................................................-23-

                           Interest Distribution Amount........................................................-23-

                           Interest Remittance Amount..........................................................-23-

                           Late Collections....................................................................-23-

                           Liquidation Event...................................................................-23-

                           Liquidation Proceeds................................................................-24-

                           Loan-to-Value Ratio.................................................................-24-

                           London Business Day.................................................................-24-

                           Loss Severity Percentage............................................................-24-

                           Marker Rate.........................................................................-24-

</TABLE>





                                                       -iv-



<PAGE>





<TABLE>

<CAPTION>



<S>               <C>

                           Master Servicer.....................................................................-25-

                           Master Servicer Certification.......................................................-25-

                           Master Servicer Event of Default....................................................-25-

                           Master Servicer Fee Rate............................................................-25-

                           Master Servicing Fee................................................................-25-

                           Maximum I-LTZZ Uncertificated Interest Deferral Amount..............................-25-

                           Maximum Mortgage Rate...............................................................-26-

                           MERS     ...........................................................................-26-

                           MERS(R)System........................................................................-26-

                           Mezzanine Certificate...............................................................-26-

                           MIN      ...........................................................................-26-

                           Minimum Mortgage Rate...............................................................-26-

                           MOM Loan ...........................................................................-26-

                           Monthly Payment.....................................................................-26-

                           Moody's  ...........................................................................-26-

                           Mortgage ...........................................................................-26-

                           Mortgage File.......................................................................-27-

                           Mortgage Loan.......................................................................-27-

                           Mortgage Loan Documents.............................................................-27-

                           Mortgage Loan Purchase Agreement....................................................-27-

                           Mortgage Loan Schedule..............................................................-27-

                           Mortgage Note.......................................................................-29-

                           Mortgage Rate.......................................................................-29-

                           Mortgaged Property..................................................................-29-

                           Mortgagor...........................................................................-30-

                           Net Monthly Excess Cashflow.........................................................-30-

                           Net Mortgage Rate...................................................................-30-

                           Net WAC Pass-Through Rate...........................................................-30-

                           Net WAC Rate Carryover Amount.......................................................-31-

                           New Lease...........................................................................-31-

                           Nonrecoverable P&I Advance..........................................................-31-

                           Nonrecoverable Servicing Advance....................................................-32-

                           Non-United States Person............................................................-32-

                           Notional Amount.....................................................................-32-

                           Offered Certificates................................................................-32-

                           Officer's Certificate...............................................................-32-

                           One-Month LIBOR.....................................................................-32-

                           One-Month LIBOR Pass-Through Rate...................................................-33-

                           Opinion of Counsel..................................................................-34-

                           Optional Termination Date...........................................................-34-

                           Originator..........................................................................-34-

                           Overcollateralization Amount........................................................-34-

                           Overcollateralization Increase Amount...............................................-34-

                           Overcollateralization Reduction Amount..............................................-34-

                           Ownership Interest..................................................................-34-

                           P&I Advance.........................................................................-34-

</TABLE>





                                                        -v-



<PAGE>





<TABLE>

<CAPTION>



<S>               <C>

                           Pass-Through Rate...................................................................-35-

                           Percentage Interest.................................................................-36-

                           Periodic Rate Cap...................................................................-37-

                           Permitted Investments...............................................................-37-

                           Permitted Transferee................................................................-38-

                           Person   ...........................................................................-39-

                           Plan     ...........................................................................-39-

                           Prepayment Assumption...............................................................-39-

                           Prepayment Charge...................................................................-39-

                           Prepayment Charge Schedule..........................................................-39-

                           Prepayment Period...................................................................-40-

                           Principal Prepayment................................................................-40-

                           Principal Distribution Amount.......................................................-40-

                           Principal Remittance Amount.........................................................-40-

                           Purchase Price......................................................................-40-

                           Qualified Substitute Mortgage Loan..................................................-40-

                           Rate/Term Refinancing...............................................................-41-

                           Rating Agency or Rating Agencies....................................................-41-

                           Realized Loss.......................................................................-41-

                           Record Date.........................................................................-42-

                           Reference Banks.....................................................................-43-

                           Refinanced Mortgage Loan............................................................-43-

                           Regular Certificate.................................................................-43-

                           Regular Interest....................................................................-43-

                           Regulation S Permanent Global Certificate...........................................-43-

                           Regulation S Temporary Global Certificate...........................................-43-

                           Release Date........................................................................-43-

                           Relief Act..........................................................................-43-

                           Relief Act Interest Shortfall.......................................................-43-

                           REMIC    ...........................................................................-43-

                           REMIC I  ...........................................................................-43-

                           REMIC I Interest Loss Allocation Amount.............................................-44-

                           REMIC I Marker Allocation Percentage................................................-44-

                           REMIC I Overcollateralization Amount................................................-44-

                           REMIC I Principal Loss Allocation Amount............................................-44-

                           REMIC I Regular Interest............................................................-45-

                           REMIC I Regular Interest I-LTAA.....................................................-45-

                           REMIC I Regular Interest I-LTA1.....................................................-45-

                           REMIC I Regular Interest I-LTA2A....................................................-45-

                           REMIC I Regular Interest I-LTA2B....................................................-45-

                           REMIC I Regular Interest I-LTA2C....................................................-45-

                           REMIC I Regular Interest I-LTA3.....................................................-45-

                           REMIC I Regular Interest I-LTB1A....................................................-46-

                           REMIC I Regular Interest I-LTB1B....................................................-46-

                           REMIC I Regular Interest I-LTM1.....................................................-46-

                           REMIC I Regular Interest I-LTM2.....................................................-46-

</TABLE>





                                                       -vi-



<PAGE>





<TABLE>

<CAPTION>



<S>               <C>

                           REMIC I Regular Interest I-LTM3.....................................................-46-

                           REMIC I Regular Interest I-LTM4.....................................................-46-

                           REMIC I Regular Interest I-LTM5.....................................................-47-

                           REMIC I Regular Interest I-LTM6.....................................................-47-

                           REMIC I Regular Interest I-LTP......................................................-47-

                           REMIC I Regular Interest I-LTXX.....................................................-47-

                           REMIC I Regular Interest I-LTZZ.....................................................-47-

                           REMIC I Regular Interest I-LT1A.....................................................-47-

                           REMIC I Regular Interest I-LT1B.....................................................-47-

                           REMIC I Regular Interest I-LT2A.....................................................-48-

                           REMIC I Regular Interest I-LT2B.....................................................-48-

                           REMIC I Remittance Rate.............................................................-48-

                           REMIC I Sub WAC Allocation Percentage...............................................-48-

                           REMIC I Subordinated Balance Ratio..................................................-48-

                           REMIC I Required Overcollateralization Amount.......................................-48-

                           REMIC II ...........................................................................-48-

                           REMIC II Certificate................................................................-49-

                           REMIC II Certificateholder..........................................................-49-

                           REMIC Provisions....................................................................-49-

                           Remittance Report...................................................................-49-

                           Rents from Real Property............................................................-49-

                           REO Account.........................................................................-49-

                           REO Disposition.....................................................................-49-

                           REO Imputed Interest................................................................-49-

                           REO Property........................................................................-49-

                           Required Overcollateralization Amount...............................................-49-

                           Reserve Fund........................................................................-49-

                           Reserve Interest Rate...............................................................-50-

                           Residential Dwelling................................................................-50-

                           Residual Certificate................................................................-50-

                           Residual Interest...................................................................-50-

                           Responsible Officer.................................................................-50-

                           S&P      ...........................................................................-50-

                           Scheduled Principal Balance.........................................................-50-

                           Securities Act......................................................................-51-

                           Securities Administrator............................................................-51-

                           Seller   ...........................................................................-51-

                           Senior Interest Distribution Amount.................................................-51-

                           Servicer ...........................................................................-51-

                           Servicer Event of Default...........................................................-51-

                           Servicer Remittance Date............................................................-51-

                           Servicer Report.....................................................................-51-

                           Servicing Advances..................................................................-51-

                           Servicing Fee.......................................................................-52-

                           Servicing Fee Rate..................................................................-52-

                           Servicing Officer...................................................................-52-

</TABLE>





                                                       -vii-



<PAGE>





<TABLE>

<CAPTION>



<S>               <C>

                           Single Certificate..................................................................-52-

                           Startup Day.........................................................................-52-

                           Stated Principal Balance............................................................-52-

                           Stepdown Date.......................................................................-53-

                           Sub-Servicer........................................................................-53-

                           Sub-Servicing Agreement.............................................................-53-

                           Substitution Shortfall Amount.......................................................-53-

                           Tax Returns.........................................................................-53-

                           Telerate Page 3750..................................................................-53-

                           Termination Price...................................................................-53-

                           Terminator..........................................................................-53-

                           Transfer ...........................................................................-53-

                           Transferee..........................................................................-54-

                           Transferor..........................................................................-54-

                           Trigger Event.......................................................................-54-

                           Trust    ...........................................................................-54-

                           Trust Fund..........................................................................-54-

                           Trust REMIC.........................................................................-54-

                           Trustee  ...........................................................................-54-

                           Uncertificated Balance..............................................................-54-

                           Uncertificated Interest.............................................................-55-

                           Uninsured Cause.....................................................................-55-

                           United States Person................................................................-55-

                           Value    ...........................................................................-55-

                           Voting Rights.......................................................................-56-

                           Wells Fargo.........................................................................-56-

SECTION 1.02.     Allocation of Certain Interest Shortfalls....................................................-56-



<CAPTION>







                                                    ARTICLE II



                                           CONVEYANCE OF MORTGAGE LOANS;

<S>               <C>

SECTION 2.01.     Conveyance of the Mortgage Loans.............................................................-58-

SECTION 2.02.     Acceptance of REMIC I by Trustee.............................................................-59-

SECTION 2.03.     Repurchase or Substitution of Mortgage Loans.................................................-59-

SECTION 2.04.     Representations and Warranties of the Master Servicer........................................-62-

SECTION 2.05.     Representations, Warranties and Covenants of the Servicer....................................-63-

SECTION 2.06.     Issuance of the REMIC I Regular Interests and the Class R-I Interest

                   ............................................................................................-65-

SECTION 2.07.     Conveyance of the REMIC I Regular Interests; Acceptance of REMIC I by

                  the Trustee..................................................................................-65-

SECTION 2.08.     Issuance of Class R Certificates.............................................................-66-

SECTION 2.09.     Establishment of the Trust...................................................................-66-

</TABLE>







                                                      -viii-



<PAGE>





<TABLE>

<CAPTION>







                                                    ARTICLE III



                                           ADMINISTRATION AND SERVICING

                                          OF THE MORTGAGE LOANS; ACCOUNTS

<S>               <C>

SECTION 3.01.     Servicer to Act as Servicer..................................................................-67-

SECTION 3.02.     Sub-Servicing Agreements Between Servicer and Sub-Servicers..................................-69-

SECTION 3.03.     Successor Sub-Servicers......................................................................-69-

SECTION 3.04.     No Contractual Relationship Between Sub-Servicer, Trustee or the

                  Certificateholders...........................................................................-69-

SECTION 3.05.     Assumption or Termination of Sub-Servicing Agreement by Successor

                  Servicer.....................................................................................-70-

SECTION 3.06.     Collection of Certain Mortgage Loan Payments.................................................-70-

SECTION 3.07.     Collection of Taxes, Assessments and Similar Items; Servicing Accounts

                   ............................................................................................-71-

SECTION 3.08.     Collection Account and Distribution Account..................................................-72-

SECTION 3.09.     Withdrawals from the Collection Account and Distribution Account

                   ............................................................................................-74-

SECTION 3.10.     Investment of Funds in the Investment Accounts...............................................-76-

SECTION 3.11.     Maintenance of Hazard Insurance, Errors and Omissions and Fidelity

                  Coverage.....................................................................................-77-

SECTION 3.12.     Enforcement of Due-on-Sale Clauses; Assumption Agreements....................................-78-

SECTION 3.13.     Realization Upon Defaulted Mortgage Loans....................................................-79-

SECTION 3.14.     Trustee to Cooperate; Release of Mortgage Files..............................................-81-

SECTION 3.15.     Servicing Compensation.......................................................................-82-

SECTION 3.16.     Collection Account Statements................................................................-83-

SECTION 3.17.     Statement as to Compliance...................................................................-83-

SECTION 3.18.     Independent Public Accountants' Servicing Report.............................................-83-

SECTION 3.19      Annual Certification.........................................................................-84-

SECTION 3.20.     Access to Certain Documentation..............................................................-85-

SECTION 3.21.     Title, Management and Disposition of REO Property............................................-85-

SECTION 3.22.     Obligations of the Servicer in Respect of Prepayment Interest Shortfalls;

                  Relief Act Interest Shortfalls...............................................................-88-

SECTION 3.23.     Obligations of the Servicer in Respect of Mortgage Rates and  Monthly

                  Payments.....................................................................................-88-

SECTION 3.24.     Reserve Fund.................................................................................-89-

SECTION 3.25.     Advance Facility.............................................................................-90-

SECTION 3.26.     Servicer Indemnification.....................................................................-92-









                                                    ARTICLE IV



                                        ADMINISTRATION AND MASTER SERVICING

                                   OF THE MORTGAGE LOANS BY THE MASTER SERVICER

</TABLE>





                                                       -ix-



<PAGE>



<TABLE>

<CAPTION>



<S>               <C>

SECTION 4.01.     Master Servicer..............................................................................-93-

SECTION 4.02      REMIC-Related Covenants......................................................................-94-

SECTION 4.03      Monitoring of Servicer.......................................................................-94-

SECTION 4.04      Fidelity Bond................................................................................-95-

SECTION 4.05      Power to Act; Procedures.....................................................................-95-

SECTION 4.06      Due-on-Sale Clauses; Assumption Agreements...................................................-96-

SECTION 4.07      Reserved.....................................................................................-96-

SECTION 4.08      Documents, Records and Funds in Possession of Master Servicer To Be Held

                  for Trustee..................................................................................-96-

SECTION 4.09      Standard Hazard Insurance and Flood Insurance Policies.......................................-97-

SECTION 4.10      Presentment of Claims and Collection of Proceeds.............................................-97-

SECTION 4.11      Reserved.....................................................................................-97-

SECTION 4.12      Trustee to Retain Possession of Certain Insurance Policies and Documents

                   ............................................................................................-97-

SECTION 4.13      Realization Upon Defaulted Mortgage Loans....................................................-98-

SECTION 4.14      Compensation for the Master Servicer.........................................................-98-

SECTION 4.15      REO Property.................................................................................-98-

SECTION 4.16      Annual Officer's Certificate as to Compliance................................................-99-

SECTION 4.17      Annual Independent Accountant's Servicing Report.............................................-99-

SECTION 4.18      UCC.........................................................................................-100-

SECTION 4.19      Obligation of the Master Servicer in Respect of Prepayment Interest

                  Shortfalls..................................................................................-100-

SECTION 4.20      Reserved....................................................................................-100-

SECTION 4.21      Prepayment Penalty Verification.............................................................-100-







                                                     ARTICLE V

                                          PAYMENTS TO CERTIFICATEHOLDERS

SECTION 5.01      Distributions...............................................................................-102-

SECTION 5.02      Statements to Certificateholders............................................................-118-

SECTION 5.03      Servicer Reports; P&I Advances..............................................................-121-

SECTION 5.04      Allocation of Realized Losses...............................................................-122-

SECTION 5.05      Compliance with Withholding Requirements....................................................-125-

SECTION 5.06      Reports Filed with Securities and Exchange Commission.......................................-125-







                                                    ARTICLE VI

                                                 THE CERTIFICATES

SECTION 6.01      The Certificates............................................................................-127-

SECTION 6.02      Registration of Transfer and Exchange of Certificates.......................................-129-

SECTION 6.03      Mutilated, Destroyed, Lost or Stolen Certificates...........................................-135-

SECTION 6.04      Persons Deemed Owners.......................................................................-135-

SECTION 6.05      Certain Available Information...............................................................-135-

</TABLE>







                                                        -x-



<PAGE>



<TABLE>

<CAPTION>









                                                    ARTICLE VII

                                THE DEPOSITOR, THE SERVICER AND THE MASTER SERVICER

<S>               <C>

SECTION 7.01      Liability of the Depositor, the Servicer and the Master Servicer............................-137-

SECTION 7.02      Merger or Consolidation of the Depositor, the Servicer or the Master

                  Servicer....................................................................................-137-

SECTION 7.03      Limitation on Liability of the Depositor, the Servicer, the Master Servicer and

                  Others......................................................................................-137-

SECTION 7.04      Limitation on Resignation of the Servicer...................................................-138-

SECTION 7.05      Limitation on Resignation of the Master Servicer............................................-139-

SECTION 7.06      Assignment of Master Servicing..............................................................-140-

SECTION 7.07      Rights of the Depositor in Respect of the Servicer and the Master Servicer

                   ...........................................................................................-140-

SECTION 7.08.     Duties of the Credit Risk Manager...........................................................-141-

SECTION 7.09.     Limitation Upon Liability of the Credit Risk Manager........................................-141-

SECTION 7.10.     Removal of the Credit Risk Manager..........................................................-142-







                                                   ARTICLE VIII

                                                      DEFAULT

SECTION 8.01      Servicer Events of Default..................................................................-143-

SECTION 8.02      Master Servicer to Act; Appointment of Successor............................................-147-

SECTION 8.03      Notification to Certificateholders..........................................................-148-

SECTION 8.04      Waiver of Servicer Events of Default........................................................-148-







                                                    ARTICLE IX

                              CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

SECTION 9.01      Duties of Trustee and Securities Administrator..............................................-149-

SECTION 9.02      Certain Matters Affecting Trustee and Securities Administrator..............................-150-

SECTION 9.03      Trustee and Securities Administrator not Liable for Certificates or Mortgage

                  Loans.......................................................................................-152-

SECTION 9.04      Trustee and Securities Administrator May Own Certificates...................................-153-

SECTION 9.05      Fees and Expenses of Trustee and Securities Administrator...................................-153-

SECTION 9.06      Eligibility Requirements for Trustee and Securities Administrator...........................-153-

SECTION 9.07      Resignation and Removal of Trustee and Securities Administrator.............................-154-

SECTION 9.08      Successor Trustee or Securities Administrator...............................................-155-

SECTION 9.09      Merger or Consolidation of Trustee or Securities Administrator..............................-155-

SECTION 9.10      Appointment of Co-Trustee or Separate Trustee...............................................-156-

SECTION 9.11      Appointment of Office or Agency.............................................................-157-

SECTION 9.12      Representations and Warranties..............................................................-157-

</TABLE>









                                                       -xi-



<PAGE>





<TABLE>

<CAPTION>



                                                     ARTICLE X

                                                    TERMINATION

<S>               <C>

SECTION 10.01     Termination Upon Repurchase or Liquidation of All Mortgage Loans.

                   ...........................................................................................-159-

SECTION 10.02     Additional Termination Requirements.........................................................-161-







                                                    ARTICLE XI

                                                 REMIC PROVISIONS

SECTION 11.01     REMIC Administration........................................................................-162-

SECTION 11.02     Prohibited Transactions and Activities......................................................-164-

SECTION 11.03     Indemnification.............................................................................-165-







                                                    ARTICLE XII

                                             MISCELLANEOUS PROVISIONS

SECTION 12.01     Amendment...................................................................................-166-

SECTION 12.02     Recordation of Agreement; Counterparts......................................................-167-

SECTION 12.03     Limitation on Rights of Certificateholders..................................................-167-

SECTION 12.04     Governing Law...............................................................................-168-

SECTION 12.05     Notices.....................................................................................-168-

SECTION 12.06     Severability of Provisions..................................................................-169-

SECTION 12.07     Notice to Rating Agencies...................................................................-169-

SECTION 12.08     Article and Section References..............................................................-170-

SECTION 12.09     Grant of Security Interest..................................................................-170-

SECTION 12.10     Survival of Indemnification.................................................................-171-

</TABLE>







                                                       -xii-



<PAGE>



<TABLE>

<CAPTION>





EXHIBITS

<S>               <C>

Exhibit A-1       Form of Class A Certificate

Exhibit A-2       Form of Class M Certificate

Exhibit A-3       Form of Class B-1A and Class B-1B Certificate

Exhibit A-4       Form of Class CE Certificate

Exhibit A-5       Form of Class P Certificate

Exhibit A-6       Form of Class R Certificate

Exhibit B-1       Form of Transferor Representation Letter and Form of Transferee Representation

                  Letter in Connection with Transfer of the Class B-1A Certificates, Class B-1B

                  Certificates, Class P Certificates, Class CE Certificates and Residual Certificates

                  Pursuant to Rule 144A Under the 1933 Act; Form of Regulation S Transfer

                  Certificate

Exhibit B-2       Form of Transferor Representation Letter and Form of Transferee Representation

                  Letter in Connection with Transfer of the Class B-1A Certificates, Class B-1B

                  Certificates, Class P Certificates, Class CE Certificates and Residual Certificates

                  Pursuant to Rule 501 (a) Under the 1933 Act

Exhibit B-3       Form of Transfer Affidavit and Agreement and Form of Transferor Affidavit in

                  Connection with Transfer of Residual Certificates

Exhibit C         Form of Servicer Certification



Schedule 1        Mortgage Loan Schedule

Schedule 2        Prepayment Charge Schedule

</TABLE>







                                     -xiii-



<PAGE>







                  This Pooling and Servicing Agreement, is dated and effective

as of January 1, 2004, among ACE SECURITIES CORP. as Depositor, THE PROVIDENT

BANK as Servicer, WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION as Master

Servicer and Securities Administrator and HSBC BANK USA as Trustee.



                             PRELIMINARY STATEMENT:



                  The Depositor intends to sell pass-through certificates to be

issued hereunder in multiple classes, which in the aggregate will evidence the

entire beneficial ownership interest of the Trust Fund created hereunder. The

Trust Fund will consist of a segregated pool of assets comprised of the Mortgage

Loans and certain other related assets subject to this Agreement.



                                     REMIC I



                  As provided herein, the Trustee will elect to treat the

segregated pool of assets consisting of the Mortgage Loans and certain other

related assets subject to this Agreement (other than the Reserve Fund) as a

REMIC for federal income tax purposes, and such segregated pool of assets will

be designated as "REMIC I". The Class R-I Interest will be the sole class of

"residual interests" in REMIC I for purposes of the REMIC Provisions (as defined

herein). The following table irrevocably sets forth the designation, the REMIC I

Remittance Rate, the initial Uncertificated Balance and, solely for purposes of

satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible

maturity date" for each of the REMIC I Regular Interests (as defined herein).

None of the REMIC I Regular Interests will be certificated.



<TABLE>

<CAPTION>





                           REMIC I                   Initial                Latest Possible

Designation            Remittance Rate        Uncertificated Balance       Maturity Date (1)

-----------            ---------------        ----------------------       -----------------

<S>                       <C>                   <C>                          <C>

I-LTAA                    Variable(2)           $ 486,830,338.57             September 25, 2033

I-LTA1                    Variable(2)           $   2,858,215.00             September 25, 2033

I-LTA2A                   Variable(2)           $     188,020.00             September 25, 2033

I-LTA2B                   Variable(2)           $     465,000.00             September 25, 2033

I-LTA2C                   Variable(2)           $      95,635.00             September 25, 2033

I-LTA3                    Variable(2)           $     317,580.00             September 25, 2033

I-LTM1                    Variable(2)           $     347,735.00             September 25, 2033

I-LTM2                    Variable(2)           $     285,640.00             September 25, 2033

I-LTM3                    Variable(2)           $      86,935.00             September 25, 2033

I-LTM4                    Variable(2)           $      86,935.00             September 25, 2033

I-LTM5                    Variable(2)           $      74,515.00             September 25, 2033

I-LTM6                    Variable(2)           $      49,675.00             September 25, 2033

I-LTB1A                   Variable(2)           $      34,775.00             September 25, 2033

I-LTB1B                   Variable(2)           $      34,775.00             September 25, 2033

I-LTZZ                    Variable(2)           $   5,009,878.03             September 25, 2033

I-LTP                     Variable(2)           $         100.00             September 25, 2033

</TABLE>







                                       -1-



<PAGE>



<TABLE>

<CAPTION>



<S>                       <C>                   <C>                          <C>

I-LT1A                    Variable(2)           $        16,884.01           September 25, 2033

I-LT1B                    Variable(2)           $        80,339.92           September 25, 2033

I-LT2A                    Variable(2)           $         3,980.12           September 25, 2033

I-LT2B                    Variable(2)           $        18,953.22           September 25, 2033

I-LTXX                    Variable(2)           $   496,645,434.33           September 25, 2033

</TABLE>

___________________________

(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury

         regulations, the Distribution Date immediately following the maturity

         date for the Mortgage Loan with the latest maturity date has been

         designated as the "latest possible maturity date" for each REMIC I

         Regular Interest.

(2)      Calculated in accordance with the definition of "REMIC I Remittance

         Rate" herein.



                                    REMIC II

                                    --------



                  As provided herein, the Trustee will elect to treat the

segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC

for federal income tax purposes, and such segregated pool of assets will be

designated as "REMIC II." The Class R-II Interest will evidence the sole class

of "residual interests" in REMIC II for purposes of the REMIC Provisions. The

 

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