CUSTODIAL AGREEMENT

THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to time, the Agreement), dated as of [    ], by and among [    ], not individually but solely as indenture trustee under the Indenture defined below (including its successors under such Indenture, the Indenture Trustee), PEOPLES CHOICE HOME LOAN SECURITIES CORP., as depositor (together with any successor in interest, the Depositor), [    ], as master servicer under the Sale and Servicing Agreement defined below (together with any successor in interest, in such capacity, the Master Servicer) and as securities administrator under the Sale and Servicing Agreement defined below (together with any successor in interest, in such capacity, the Securities Administrator), [    ], as custodian (together with any successor in interest or any successor appointed hereunder, the Custodian), PEOPLES FINANCIAL REALTY MORTGAGE SECURITIES TRUST, SERIES [    ], as issuing entity (the Issuing Entity), [    ], as servicer under the Servicing Agreement (the Servicer), and [    ], as subservicer under the Servicing Agreement (the Subservicer).

WITNESSETH THAT:

WHEREAS, the Depositor, the Master Servicer and Securities Administrator, the Indenture Trustee, Peoples Choice Funding, Inc. (the Seller) and the Issuing Entity have entered into a Sale and Servicing Agreement, dated as of [    ] (the Sale and Servicing Agreement), pursuant to which the Depositor sold certain mortgage loans to the Issuing Entity; and

WHEREAS, the Issuing Entity, the Indenture Trustee and the Securities Administrator have entered into an Indenture, dated as of [    ] (the Indenture), relating to the issuance of Peoples Financial Realty Mortgage Securities Trust, Series [    ], Mortgage-Backed Notes, Series [    ] (the Notes), whereby the Issuing Entity pledged such mortgage loans to the Indenture Trustee to secure the Issuing Entitys payment obligations on the Notes; and

WHEREAS, the Custodian has agreed to act as custodian for the Indenture Trustee for the purposes of receiving and holding certain documents and other instruments delivered by the Depositor or the Master Servicer under the Sale and Servicing Agreement and the Servicing Agreement, all upon the terms and conditions and subject to the limitations hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the Indenture Trustee, the Depositor, the Master Servicer, the Servicer and the Subservicer and the Custodian hereby agree as follows:

ARTICLE I

DEFINITIONS

Capitalized terms used in this Agreement and not defined herein shall have the meanings assigned in Appendix A to the Indenture, unless otherwise required by the context herein.

1

ARTICLE II

CUSTODY OF MORTGAGE DOCUMENTS

Section 2.1. Custodian to Act as Agent: Acceptance of Mortgage Files. The Custodian, as the duly appointed custodial agent of the Indenture Trustee for these purposes, acknowledges (subject to any exceptions noted in the Initial Certification referred to in Section 2.3(a)), receipt of the Mortgage Files relating to the Mortgage Loans identified on the schedule attached hereto and declares that it holds and will hold such Mortgage Files as custodial agent for the Indenture Trustee, in trust, for the use and benefit of all present and future Noteholders.

Section 2.2. Recordation of Assignments. If any Mortgage File includes one or more assignments of Mortgage to the Indenture Trustee in a state that is specifically excluded from the Opinion of Counsel delivered by the Seller to the Indenture Trustee and the Custodian pursuant to the provisions of Section 2.01 of the Sale and Servicing Agreement, each such assignment shall be delivered by the Custodian to the Depositor for the purpose of recording it in the appropriate public office for real property records, and the Depositor, at no expense to the Custodian, shall promptly cause to be recorded in the appropriate public office for real property records each such assignment of Mortgage and, upon receipt thereof from such public office, shall return each such assignment of Mortgage to the Custodian.

Section 2.3. Review of Mortgage Files.

(a) On or prior to the Closing Date, in accordance with Section 2.02(a) of the Sale and Servicing Agreement, the Custodian shall deliver to the Depositor, the Seller, the Indenture Trustee and the Issuing Entity an Initial Certification in the form annexed hereto as Exhibit One evidencing receipt (subject to any exceptions noted therein) of a Mortgage File for each of the Mortgage Loans listed on the Schedule attached hereto (the Mortgage Loan Schedule). Items (i) and (iii) (pertaining to the delivery of mortgage notes (including any riders thereto) and assignments of mortgages to the Indenture Trustee) on Schedule A attached hereto have been delivered to the Custodian in blank. The Custodian is hereby authorized to stamp such mortgage notes (including any riders thereto) and assignments of the mortgages to [    ], as Indenture Trustee under the Indenture relating to Peoples Financial Realty Mortgage Securities Trust, Series [    ], Mortgage-Backed Notes, Series [    ].

(b) Within 90 days of the Closing Date (or, with respect to an Substitute Mortgage Loan delivered to the Custodian, within five (5) Business Days after the receipt by the Custodian thereof), the Custodian agrees, for the benefit of the Noteholders, to review the documents listed in Schedule A attached hereto and shall deliver to the Depositor, the Seller, the Indenture Trustee and the Issuing Entity an Interim Certification in the form annexed hereto as Exhibit Two to the effect that all such documents have been executed and received and that the Mortgage Notes relate, determined on the basis of Mortgagor Name, original principal balance and loan number, to the Mortgage Loans identified on the Mortgage Loan Schedule, except for any exceptions listed on Schedule A attached to such Interim Certification. The Custodian shall be under no duty or obligation to inspect, review or examine said documents, instruments, certificates or other papers to determine that the same are genuine, enforceable, or appropriate for the represented purpose or that they have actually been recorded or that they are other than what they purport to be on their face.

Home        Intelligence        Services        Subscriptions        News        About Us

Contact Us       Terms of Use       Resend Documents       Shopping Cart

Copyright © 2008 The Consus Group LLC