EXECUTION

ADMINISTRATION AGREEMENT

among

SAXON ASSET SECURITIES TRUST 2005-1,

as Issuer

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Administrator

WILMINGTON TRUST COMPANY,

as Owner Trustee

and

SAXON ASSET SECURITIES COMPANY,

as Depositor

Dated as of January 1, 2005

This Administration Agreement (the Agreement) is entered into as of January 1, 2005, among SAXON ASSET SECURITIES TRUST 2005-1, a Delaware statutory trust (the Issuer), DEUTSCHE BANK TRUST COMPANY AMERICAS, not in its individual capacity but solely as administrator (the Administrator), WILMINGTON TRUST COMPANY, not in its individual capacity but solely as owner trustee (the Owner Trustee), and SAXON ASSET SECURITIES COMPANY, as depositor (the Depositor).

Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Indenture, or if not defined therein, in the Sale and Servicing Agreement or, if not defined therein, in the Trust Agreement (each as defined herein).

W I T N E S S E T H:

WHEREAS, the Issuer is a statutory trust under the Delaware Statutory Trust Act (12 Del.C.  3801 et seq.) created by a trust agreement relating to the Trust, dated as of January 1, 2005, among the Depositor, the Owner Trustee and the Administrator (the Trust Agreement);

WHEREAS, the Issuer will issue Notes designated as Saxon Asset Securities Trust 2005-1 Mortgage Loan Asset-Backed Notes, Series 2005-1 and issue the Trust Certificate in accordance with the Trust Agreement (collectively, the Securities);

WHEREAS, the Notes will be secured by certain collateral, as more particularly set forth in the indenture, dated as of January 1, 2005 (the Indenture), between the Issuer and Deutsche Bank Trust Company Americas, as indenture trustee (in such capacity, the Indenture Trustee);

WHEREAS, the Trust Certificate will be issued pursuant to the Trust Agreement and will represent the undivided beneficial ownership interest in the Trust;

WHEREAS, the Issuer has entered into certain agreements in connection with the issuance of the Securities, including (i) a Sale and Servicing Agreement, dated as of January 1, 2005, among the Issuer, as issuer, Saxon Funding Management, Inc., as master servicer (the Master Servicer), Saxon Mortgage Services, Inc., as servicer (the Servicer), the Indenture Trustee and the Depositor (the Sale and Servicing Agreement), (ii) the Indenture, (iii) an interest rate cap agreement dated January 25, 2005, between the Issuer and Bear Stearns Financial Products Inc., including the form of ISDA Master Agreement and the related long form confirmation, related to the Senior Notes (the Senior Yield Maintenance Agreement), and (iv) an interest rate cap agreement dated January 25, 2005 between the Issuer and Bear Stearns Financial Products Inc., including the form of ISDA Master Agreement and related long form confirmation, related to the Subordinate Notes (the Subordinate Yield Maintenance Agreement and, together with the Senior Yield Maintenance Agreement, the Yield Maintenance Agreements, and, collectively together with the Sale and Servicing Agreement, the Indenture, the Insurance Agreement (as defined below) and the Trust Agreement, the Related Agreements);

WHEREAS, pursuant to the Related Agreements, the Issuer is required to perform certain duties in connection with (a) the Notes and the collateral therefor pledged pursuant to the Indenture (the Collateral) and (b) the beneficial ownership interests and other interests in the Issuer represented by the Trust Certificate;

WHEREAS, the Issuer desires to have the Administrator and the Depositor, respectively, perform certain of the duties of the Issuer referred to in the preceding clause, and to provide such additional services consistent with the terms of this Agreement and the Related Agreements as the Issuer may from time to time request; and

WHEREAS, the Administrator and the Depositor have the capacity to provide the respective services required hereby and are willing to perform such services for the Issuer on the terms set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

Section 1.  Duties of the Administrator.

(a)  The Administrator agrees to perform all of the duties of the Indenture Trustee under the Yield Maintenance Agreements.  The Administrator further agrees to (x) execute on behalf of the Issuer the insurance policy letter agreement (the Insurance Agreement) between the Administrator (on behalf of the Issuer), Saxon Funding Management, Inc. and Mortgage Guaranty Insurance Company relating to the PMI Insurance Policy (as defined in the Sale and Servicing Agreement), (y) hold in its name on behalf of the Issuer the PMI Insurance Policy and (z) cause the proceeds of the PMI Insurance Policy to be provided to the Indenture Trustee for application pursuant to the Sale and Servicing Agreement.  In addition to its duties described above, the Administrator shall take all appropriate action that is the duty of the Issuer to take with respect to the following matters under the Trust Agreement, Sale and Servicing Agreement and the Indenture (references are to sections of the Indenture):

(i)         The Administrator shall notify the Owner Trustee if the Administrator obtains actual knowledge or written notice that action by the Owner Trustee is necessary to comply with the Issuers duties under the Sale and Servicing Agreement and the Indenture;

(ii)        the duty to cause the Note Register to be kept if the Issuer assumes the duties of Note Registrar, and to give the Indenture Trustee notice of any appointment of a new Note Registrar and the location, or change in location, of the Note Register (Section 2.03);

(iii)      causing the preparation of the Notes for execution by the Owner Trustee upon the registration of any transfer or exchange of the Notes (Sections 2.02, 2.03 and 2.04);

(iv)       causing the preparation of Definitive Notes in accordance with the instructions of any Clearing Agency, the duty to attempt to locate a qualified successor to the Clearing Agency, in consultation with the Depositor, if necessary, and the preparation of written notice to the Indenture Trustee of termination of the book-entry system through the Clearing Agency (Section 2.11);

(v)        the maintenance of an office in New York, New York, for registration of transfer or exchange of Notes (Section 3.02);

(vi)       the preparation of an Issuer Order required to appoint a Paying Agent, the preparation of written notice to the Indenture Trustee and the duty to cause newly appointed Paying Agents, if any, to execute and deliver to the Indenture Trustee the instrument specified in the Indenture regarding funds held in trust (Section 3.03);

(vii)      the execution of all supplements, amendments, financing statements, continuation statements, instruments of further assurance and other instruments prepared by the Depositor and delivered to the Administrator for execution necessary to protect the Collateral (Sections 3.05 and 3.06(c)) (which shall be prepared and filed by the Depositor);

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