- cwalt 2007-oa3 prospectus... · 8/18/2016

Exhibit B

FILED: NEW YORK COUNTY CLERK 08/26/2016 04:13 PM INDEX NO. 150973/2016NYSCEF DOC. NO. 127 RECEIVED NYSCEF: 08/26/2016

8/18/2016 https://www.sec.gov/Archives/edgar/data/1269518/000095012407001285/v27889b5e424b5.txt

https://www.sec.gov/Archives/edgar/data/1269518/000095012407001285/v27889b5e424b5.txt 1/359

424B51v27889b5e424b5.txtPROSPECTUS SUPPLEMENT

As filed pursuant to Rule 424(b)(5) Under the Securities Act of 1933 Registration No. 333‐131630PROSPECTUS SUPPLEMENT(TO PROSPECTUS DATED NOVEMBER 14, 2006) $1,137,053,100 (APPROXIMATE) CWALT, INC. DEPOSITOR

[COUNTRYWIDE HOME LOANS LOGO] SPONSOR AND SELLER COUNTRYWIDE HOME LOANS SERVICING LP MASTER SERVICER ALTERNATIVE LOAN TRUST 2007‐OA3 ISSUING ENTITY MORTGAGE PASS‐THROUGH CERTIFICATES, SERIES 2007‐OA3 DISTRIBUTIONS PAYABLE MONTHLY, BEGINNING MARCH 26, 2007

The issuing entity will issue certificates, including the following classes ofcertificates that are offered pursuant to this prospectus supplement and theaccompanying prospectus:

‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ INITIAL CLASS CERTIFICATE INITIAL CLASS CERTIFICATE BALANCE/INITIAL PASS‐THROUGH BALANCE/INITIAL PASS‐THROUGH NOTIONAL AMOUNT(1) RATE(2) NOTIONAL AMOUNT(1) RATE(2)‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

Class 1‐A‐1 $ 415,532,000 Floating Class M‐2 $ 26,284,000 Floating‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Class 1‐A‐2 $ 207,766,000 Floating Class M‐3 $ 7,999,000 Floating‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Class 1‐A‐3 $ 69,256,000 Floating Class M‐4 $ 6,857,000 Floating‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Class 2‐A‐1 $ 208,417,000 Floating Class M‐5 $ 5,714,000 Floating‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Class 2‐A‐2 $ 104,209,000 Floating Class M‐6 $



5,714,000 Floating‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Class 2‐A‐3 $ 34,736,000 Floating Class M‐7 $ 5,714,000 Floating‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Class X $ 274,657,056(3) 2.00% Class M‐8 $ 5,714,000 Floating‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Class A‐R $ 100 N/A Class M‐9 $ 5,714,000 Floating‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Class M‐1 $ 19,998,000 Floating Class M‐10 $ 7,429,000 Floating‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

CONSIDER CAREFULLY THE (1) This amount is subject to a permitted variance in the aggregate of RISK FACTORS plus or minus 5%. BEGINNING ON PAGE S‐19 IN (2) The classes of certificates offered by this prospectus supplement, THIS together with their pass‐through rates, the index on which the PROSPECTUS pass‐through rates are based, the method for calculating their SUPPLEMENT AND pass‐through rates and their initial ratings, are listed in the ON PAGE 2 IN tables under "Summary ‐‐ Description of the Certificates" THE beginning on page S‐7 of this prospectus supplement. PROSPECTUS. (3) The Class X Certificates are interest only notional amount The certificates. The initial notional amount of the Class X certificates Certificates is set forth in the table above but is not included represent in the aggregate certificate balance of all of the certificates obligations of offered. the issuing entity only This prospectus supplement and the accompanying prospectus relate only and do not to the offering of the certificates listed above and not to the other represent an classes of certificates that will be issued by the issuing entity. The interest in or certificates represent interests in a pool of two loan groups obligation of consisting primarily of 30‐ and 40‐year conventional, adjustable rate, CWALT, Inc., negative amortization mortgage loans secured by first liens on one‐to‐ Countrywide four‐family residential properties. Home Loans, Inc. or any of Credit enhancement for the certificates may consist of: their affiliates. ‐ Overcollateralization; and

This ‐ Subordination. prospectus supplement may The credit enhancement for each class of certificates varies. Not all be used to credit enhancement is available for every class. The credit offer and sell enhancement for the certificates is described in more detail in this the offered prospectus supplement. certificates only if The LIBOR certificates also will have the benefit of two interest rate



accompanied by corridor contracts and an interest rate corridor floor contract. the prospectus.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES ANDEXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIESAND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THEACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANYREPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Banc of America Securities LLC will offer the classes of certificates listedabove to the public at varying prices to be determined at the time of sale. Theproceeds to the depositor from the sale of the offered certificates are expectedto be approximately $1,178,808,065, plus accrued interest in the case of theClass X Certificates, before deducting expenses. The offered certificates willbe purchased by Banc of America Securities LLC on or about March 1, 2007. See"Method of Distribution" in this prospectus supplement. The offered certificates(other than the Class A‐R Certificates) will be available for delivery toinvestors in book‐entry form through the facilities of the Depository TrustCompany, Clearstream, Luxembourg and the Euroclear System.

BANC OF AMERICA SECURITIES LLCFebruary 28, 2007

TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT PAGE‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐ Summary......................................... S‐4Summary of Transaction Parties.................. S‐18Risk Factors.................................... S‐19The Mortgage Pool............................... S‐31 General...................................... S‐31 Assignment of the Mortgage Loans............. S‐37 Underwriting Process......................... S‐38Servicing of Mortgage Loans..................... S‐43 General...................................... S‐43 Countrywide Home Loans Servicing LP.......... S‐44 Countrywide Home Loans....................... S‐44 Mortgage Loan Production..................... S‐45 Loan Servicing............................... S‐46 Collection Procedures........................ S‐46 Servicing Compensation and Payment of Expenses..................................... S‐47 Adjustment to Servicing Compensation in Connection with Certain Prepaid Mortgage Loans........................................ S‐47 Advances..................................... S‐48 Certain Modifications and Refinancings....... S‐48The Issuing Entity.............................. S‐49Static Pool Data................................ S‐49Description of the Certificates................. S‐49 General...................................... S‐49 Calculation of Class Certificate Balance..... S‐50 Notional Amount Certificates................. S‐51 Book‐Entry Certificates; Denominations....... S‐51 Payments on Mortgage Loans; Accounts......... S‐55



Investments of Amounts Held in Accounts...... S‐57 Fees and Expenses............................ S‐59 Distributions................................ S‐61 Interest..................................... S‐62 The Corridor Contract and the Corridor Floor Contract S‐65 Principal.................................... S‐73 Residual Certificates........................ S‐78 Overcollateralization Provisions............. S‐78 Distribution of Available Funds.............. S‐78 Calculation of One‐Month LIBOR............... S‐80 Carryover Reserve Fund....................... S‐81 Corridor Contract Reserve Fund............... S‐81 Applied Realized Loss Amounts................ S‐82 Reports to Certificateholders................ S‐83 Structuring Assumptions...................... S‐84 Optional Purchase of Defaulted Loans......... S‐91 Optional Termination......................... S‐91 Events of Default; Remedies.................. S‐92 Certain Matters Regarding the Master Servicer, the Depositor and the Sellers...... S‐92 The Trustee.................................. S‐92 Voting Rights................................ S‐94 Restrictions on Transfer of the Class A‐R Certificates................................. S‐94 Ownership of the Residual Certificates....... S‐94 Restrictions on Investment, Suitability Requirements................................. S‐94 Rights of the NIM Insurer Under the Pooling and Servicing Agreement...................... S‐95Yield, Prepayment and Maturity Considerations... S‐95 Sensitivity of the Class X Certificates...... S‐97 Weighted Average Lives of the Offered Certificates................................. S‐98 Decrement Tables............................. S‐98 Last Scheduled Distribution Date............ S‐105Use of Proceeds................................ S‐105Legal Proceedings.............................. S‐105Material Federal Income Tax Consequences....... S‐105 Taxation of the REMIC Regular Interest Components of the Regular Certificates...... S‐106 Net Rate Carryover.......................... S‐107 Residual Certificates....................... S‐108Other Taxes.................................... S‐110ERISA Considerations........................... S‐110Method of Distribution......................... S‐110Legal Matters.................................. S‐113Ratings........................................ S‐113Index of Defined Terms......................... S‐115Annex A........................................ A‐1Annex B........................................ B‐1Annex I........................................ I‐1

S‐2

PROSPECTUS PAGE‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐ Important Notice About Information in This Prospectus and Each Accompanying Prospectus Supplement....................... 1



Risk Factors................................... 2The Trust Fund................................. 12Use of Proceeds................................ 24The Depositor.................................. 24Loan Program................................... 25Static Pool Data............................... 27Description of the Securities.................. 28Credit Enhancement............................. 45Yield, Maturity and Prepayment Considerations.. 51The Agreements................................. 54Certain Legal Aspects of the Loans............. 73Material Federal Income Tax Consequences....... 81Other Tax Considerations....................... 102ERISA Considerations........................... 103Legal Investment............................... 106Method of Distribution......................... 107Legal Matters.................................. 108Financial Information.......................... 109Rating......................................... 109Index to Defined Terms......................... 110

S‐3

SUMMARY

THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS DOCUMENT AND DOES NOTCONTAIN ALL OF THE INFORMATION THAT YOU NEED TO CONSIDER IN MAKING YOURINVESTMENT DECISION. TO UNDERSTAND ALL OF THE TERMS OF AN OFFERING OF THECERTIFICATES, READ CAREFULLY THIS ENTIRE DOCUMENT AND THE ACCOMPANYINGPROSPECTUS.

WHILE THIS SUMMARY CONTAINS AN OVERVIEW OF CERTAIN CALCULATIONS, CASH FLOWPRIORITIES AND OTHER INFORMATION TO AID YOUR UNDERSTANDING, YOU SHOULD READCAREFULLY THE FULL DESCRIPTION OF THESE CALCULATIONS, CASH FLOW PRIORITIES ANDOTHER INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUSBEFORE MAKING ANY INVESTMENT DECISION.

ISSUING ENTITY

Alternative Loan Trust 2007‐OA3, a common law trust formed under the laws of theState of New York.

See "The Issuing Entity" in this prospectus supplement.

DEPOSITOR

CWALT, Inc., a Delaware corporation, is a limited purpose finance subsidiary ofCountrywide Financial Corporation. Its address is 4500 Park Granada, Calabasas,California 91302, and its telephone number is (818) 225‐3000.

See "The Depositor" in the prospectus.

SPONSOR AND SELLERS

Countrywide Home Loans, Inc. will be the sponsor of the transaction and a sellerof a portion of the mortgage loans. The remainder of the mortgage loans will besold directly to the depositor by one or more special purpose entities that wereestablished by Countrywide Financial Corporation or one of its subsidiaries,which acquired the mortgage loans they are selling directly from CountrywideHome Loans, Inc.

See "Servicing of the Mortgage Loans ‐‐ Countrywide Home Loans" in thisprospectus supplement.



MASTER SERVICER

Countrywide Home Loans Servicing LP

See "Servicing of the Mortgage Loans ‐‐ Countrywide Home Loans Servicing LP" inthis prospectus supplement.

TRUSTEE

The Bank of New York

See "Description of the Certificates ‐‐ The Trustee" in this prospectussupplement.

COUNTERPARTY

Swiss Re Financial Products Corporation

See "Description of the Certificates ‐‐ The Corridor Contracts and the CorridorFloor Contract" in this prospectus supplement.

POOLING AND SERVICING AGREEMENT

The pooling and servicing agreement among the sellers, the master servicer, thedepositor and the trustee, under which the issuing entity will be formed.

CUT‐OFF DATE

For any mortgage loan, the later of February 1, 2007 and the origination datefor that mortgage loan.

CLOSING DATE

On or about March 1, 2007.

THE MORTGAGE LOANS

The mortgage loans will consist primarily of 30‐ and 40‐year conventional,adjustable rate, negative amortization mortgage loans secured by first liens onone‐to‐four‐ family residential properties. The mortgage loans will be dividedinto two separate groups. Each group of mortgage loans is referred to as a "loangroup." The mortgage rate on each mortgage loan has an introductory period ofone or three months after origination. Thereafter, the interest rate on eachmortgage loan adjusts monthly based on a specified index, but the scheduledmonthly payments on the mortgage loans adjust annually.

The depositor believes that the information set forth in this prospectussupplement regarding the mortgage loans as of the cut‐off date is representativeof the

S‐4

characteristics of the mortgage loans that will be delivered on the closingdate. However, certain mortgage loans may prepay or may be determined not tomeet the eligibility requirements for inclusion in the final mortgage pool. Alimited number of mortgage loans may be substituted for the mortgage loans thatare described in this prospectus supplement. Any substitution will not result ina material difference in the final mortgage pool although the cut‐off dateinformation regarding the actual mortgage loans may vary somewhat from theinformation regarding the mortgage loans presented in this prospectussupplement.

As of the cut‐off date, the aggregate current principal balance of the mortgage



loans was approximately $1,142,765,110, approximately $761,048,474 of which aregroup 1 mortgage loans and approximately $381,716,636 of which are group 2mortgage loans.

Solely for purposes of calculating the notional amount of the Class XCertificates, information is provided in this prospectus supplement and in AnnexA attached to this prospectus supplement for a portion of the mortgage loans ineach loan group. Sub‐loan group X‐1 will consist of the mortgage loans in loangroup 1 that have a three‐year hard prepayment charge and a mortgage rate basedon the level of one‐year MTA. Sub‐loan group X‐2 will consist of the mortgageloans in loan group 2 that have a three‐year hard prepayment charge and amortgage rate based on the level of one‐year MTA. As of the cut‐off date, theaggregate current principal balance of the mortgage loans in sub‐loan group X‐1and sub‐loan group X‐2 was $187,297,928 and $114,523,085, respectively.

All of the mortgage loans in loan group 2 and sub‐loan group X‐2 have originalprincipal balances that conform to the guidelines of Fannie Mae and Freddie Mac.

As of the cut‐off date, the group 1 mortgage loans had the followingcharacteristics:

Aggregate Current Principal Balance $ 761,048,474Geographic Concentrations in excess of 10%:California 53.87%Weighted Average Original LTV Ratio 73.69%Weighted Average Current Mortgage Rate 6.108%Range of Current Mortgage 1.000% to Rates 10.000%Average Current Principal Balance $ 641,153Range of Current Principal Balances $ 54,800 to $ 3,024,098Weighted Average Remaining Term to Maturity 388 monthsWeighted Average FICO Credit Score 709Weighted Average Gross Margin 3.370%Weighted Average Maximum Mortgage Rate 9.987%Weighted Average Minimum Mortgage Rate 3.370%Maximum Negative Amortization 115%

As of the cut‐off date, the sub‐loan group X‐1 mortgage loans had the followingcharacteristics:

Aggregate Current Principal Balance $187,297,928Geographic Concentrations in excess of 10%:California 54.41%Florida 11.73%Weighted Average Original LTV Ratio 74.87%Weighted Average Current Mortgage Rate 5.349%Range of Current Mortgage 1.000% to Rates 9.750%Average Current Principal Balance $539,763Range of Current Principal Balances $77,500 to



$3,024,098Weighted Average Remaining Term to Maturity 410 monthsWeighted Average FICO Credit Score 697

S‐5

Weighted Average Gross Margin 3.343%Weighted Average Maximum Mortgage Rate 9.983%Weighted Average Minimum Mortgage Rate 3.343%Maximum Negative Amortization 115%

As of the cut‐off date, the group 2 mortgage loans had the followingcharacteristics:

Aggregate Current Principal Balance $ 381,716,636Geographic Concentrations in excess of 10%:California 36.08%Florida 14.99%Weighted Average Original LTV Ratio 75.90%Weighted Average Current Mortgage Rate 6.286%Range of Current Mortgage Rates 1.000% to 9.950%Average Current Principal Balance $ 268,059Range of Current Principal Balances $ 15,320 to $ 787,500Weighted Average Remaining Term to Maturity 387 monthsWeighted Average FICO Credit Score 714Weighted Average Gross Margin 3.409%Weighted Average Maximum Mortgage Rate 10.031%Weighted Average Minimum Mortgage Rate 3.409%Maximum Negative Amortization 115%

As of the cut‐off date, the sub‐loan group X‐2 mortgage loans had the followingcharacteristics:

Aggregate Current Principal Balance $ 114,523,085Geographic Concentrations in excess of 10%:California 46.08%Florida 12.58%Weighted Average Original LTV Ratio 74.88%Weighted Average Current Mortgage Rate 5.134%Range of Current Mortgage Rates 1.000% to 9.950%Average Current Principal Balance $ 268,834Range of Current Principal Balances



$ 40,600 to $ 717,500Weighted Average Remaining Term to Maturity 409 monthsWeighted Average FICO Credit Score 711Weighted Average Gross Margin 3.449%Weighted Average Maximum Mortgage Rate 10.041%Weighted Average Minimum Mortgage Rate 3.449%Maximum Negative Amortization 115%

See "The Mortgage Pool" in this prospectus supplement.

Additional information regarding the mortgage loans is set forth in Annex Aattached to this prospectus supplement.

S‐6

DESCRIPTION OF THE CERTIFICATES

The issuing entity will issue the following classes of certificates:

INITIAL CLASS CERTIFICATE BALANCE/ INITIAL NOTIONAL INITIAL RATING INITIAL RATING INITIAL RATING CLASS AMOUNT (1) TYPE (MOODY'S)(2) (S&P)(2) (FITCH) (2)‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

OFFERED CERTIFICATES

Class 1‐A‐1 $ 415,532,000 Senior/Floating Pass‐Through Aaa AAA AAA Rate/Super SeniorClass 1‐A‐2 $ 207,766,000 Senior/Floating Pass‐Through Aaa AAA AAA Rate/Super Senior/SupportClass 1‐A‐3 $ 69,256,000 Senior/Floating Pass‐Through Aaa AAA AAA Rate/SupportClass 2‐A‐1 $ 208,417,000 Senior/Floating Pass‐Through Aaa AAA AAA Rate/Super SeniorClass 2‐A‐2 $ 104,209,000 Senior/Floating Pass‐Through Aaa AAA AAA Rate/Super Senior/SupportClass 2‐A‐3 $ 34,736,000 Senior/Floating Pass‐Through Aaa AAA AAA Rate/SupportClass X $ 274,657,056 Senior/Notional Amount/Interest Aaa AAA AAA Only/Fixed Pass‐Through RateClass A‐R $ 100 Senior/REMIC Residual/Principal Aaa AAA AAA OnlyClass M‐1 $ 19,998,000 Subordinate/Floating Pass‐ Aa1



AA+ AA+ Through RateClass M‐2 $ 26,284,000 Subordinate/Floating Pass‐ Aa1 AA AA Through RateClass M‐3 $ 7,999,000 Subordinate/Floating Pass‐ Aa1 AA‐ AA‐ Through RateClass M‐4 $ 6,857,000 Subordinate/Floating Pass‐ Aa1 A+ A+ Through RateClass M‐5 $ 5,714,000 Subordinate/Floating Pass‐ Aa2 A A Through RateClass M‐6 $ 5,714,000 Subordinate/Floating Pass‐ Aa3 A‐ A‐ Through RateClass M‐7 $ 5,714,000 Subordinate/Floating Pass‐ A1 BBB+ BBB+ Through RateClass M‐8 $ 5,714,000 Subordinate/Floating Pass‐ A2 BBB BBB Through RateClass M‐9 $ 5,714,000 Subordinate/Floating Pass‐ A3 BBB‐ BBB‐ Through RateClass M‐10 $ 7,429,000 Subordinate/Floating Pass‐ Baa3 N/R N/R Through RateNON‐OFFERED CERTIFICATES (3)Class C N/A Residual N/R N/R N/RClass 1‐P (4) $ 100 Prepayment Charges N/R N/R N/RClass 2‐P (4) $ 100 Prepayment Charges N/R N/R N/R

S‐7

‐‐‐‐‐‐‐‐‐‐(1) This amount is subject to a permitted variance in the aggregate of plus or minus 5% depending on the amount of mortgage loans actually delivered on the closing date.

(2) The offered certificates will not be offered unless they are assigned the indicated ratings by Moody's Investors Service, Inc. ("MOODY'S"), Standard & Poor's, a division of The McGraw‐Hill Companies, Inc. ("S&P") and Fitch Ratings ("FITCH"). "N/R" indicates that the agency was not asked to rate the certificates. A rating is not a recommendation to buy, sell or hold securities. These ratings may be lowered or withdrawn at any time by either of the rating agencies. See "Ratings" in this prospectus supplement.

(3) The Class C, Class 1‐P and Class 2‐P Certificates are not offered by this prospectus supplement. Any information contained in this prospectus supplement with respect to the Class C, Class 1‐P and Class 2‐P Certificates is provided only to permit a better understanding of the offered certificates.

(4) The Class 1‐P and Class 2‐P Certificates will be entitled to receive all prepayment charges received in respect of the mortgage loans in loan group 1 and loan group 2, respectively. Each of the Class 1‐P and Class 2‐P Certificates will have an initial class certificate balance of $100 and a



notional amount equal to the aggregate stated principal balance as of the cut‐off date of the mortgage loans in loan group 1 and loan group 2, respectively, that require payment of a prepayment charge. The Class 1‐P and Class 2‐P Certificates will not bear interest.

S‐8

The certificates will also have the following characteristics:

RELATED LOAN PASS‐THROUGH RATE PASS‐THROUGH RATE GROUP OR ON AND BEFORE AFTER SUB‐LOAN OPTIONAL OPTIONAL INTEREST ACCRUAL CLASS GROUP TERMINATION DATE TERMINATION DATE ACCRUAL PERIOD CONVENTION‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ OFFEREDCERTIFICATESClass 1‐A‐1 1 LIBOR + 0.140% (1) LIBOR + 0.280% (1) (2) Actual/360 (3)Class 1‐A‐2 1 LIBOR + 0.180% (1) LIBOR + 0.360% (1) (2) Actual/360 (3)Class 1‐A‐3 1 LIBOR + 0.210% (1) LIBOR + 0.420% (1) (2) Actual/360 (3)Class 2‐A‐1 2 LIBOR + 0.140% (1) LIBOR + 0.280% (1) (2) Actual/360 (3)Class 2‐A‐2 2 LIBOR + 0.180% (1) LIBOR + 0.360% (1) (2) Actual/360 (3)Class 2‐A‐3 2 LIBOR + 0.210% (1) LIBOR + 0.420% (1) (2) Actual/360 (3)Class X X‐1 and X‐2 (4) (4) calendar month (5) 30/360 (6)Class A‐R 1 (7) (7) N/A N/AClass M‐1 1 and 2 LIBOR + 0.310% (1) LIBOR + 0.465% (1) (2) Actual/360 (3)Class M‐2 1 and 2 LIBOR + 0.370% (1) LIBOR + 0.555% (1) (2) Actual/360 (3)Class M‐3 1 and 2 LIBOR + 0.400% (1) LIBOR + 0.600% (1) (2) Actual/360 (3)Class M‐4 1 and 2 LIBOR + 0.500% (1) LIBOR + 0.750% (1) (2) Actual/360 (3)Class M‐5 1 and 2 LIBOR + 0.550% (1) LIBOR + 0.825% (1) (2) Actual/360 (3)Class M‐6 1 and 2 LIBOR + 0.600% (1) LIBOR + 0.900% (1) (2) Actual/360 (3)Class M‐7 1 and 2 LIBOR + 1.050% (1) LIBOR + 1.575% (1) (2) Actual/360 (3)Class M‐8 1 and 2 LIBOR + 1.400% (1) LIBOR + 2.100% (1) (2) Actual/360 (3)Class M‐9 1 and 2 LIBOR + 1.750% (1) LIBOR + 2.625% (1) (2) Actual/360 (3)Class M‐10 1 and 2 LIBOR + 1.750% (1) LIBOR + 2.625% (1) (2) Actual/360 (3)

NON‐OFFEREDCERTIFICATESClass C 1 and 2 N/A N/A N/A N/AClass 1‐P 1 N/A N/A N/A N/AClass 2‐P 2 N/A N/A N/A N/A



‐‐‐‐‐‐‐‐‐‐(1) The pass‐through rate on this class of certificates for the accrual period related to any Distribution Date will be a per annum rate equal to the lesser of (i) one‐month LIBOR for the related accrual period plus the related margin and (ii) the applicable net rate cap. One‐month LIBOR for the related accrual period is calculated as described in this prospectus supplement under "Description of the Certificates ‐‐ Calculation of One‐Month LIBOR."

(2) The accrual period for any distribution date will be the period commencing on the distribution date in the month prior to the month in which that distribution date occurs (or, in the case of the first distribution date, commencing on February 28, 2007) and ending on the day immediately prior to that distribution date.

(3) Interest will accrue at the rate described in this table on the basis of a 360‐day year and the actual number of days that elapsed in the applicable accrual period.

(4) The pass‐through rate on this class of certificates for the accrual period for any distribution date will be a per annum rate equal to the lesser of 2.00% and the applicable net rate cap. See "Description of the Certificates ‐‐ Interest" in this prospectus supplement.

(5) The accrual period for any distribution date will be the calendar month before the month of that distribution date.

(6) Interest will accrue at the rate described in this table on the basis of a 360‐day year divided into twelve 30‐day months.

(7) The Class A‐R Certificates will not accrue any interest.

See "Description of the Certificates" in this prospectus supplement.

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DESIGNATIONS

We sometimes use the following designations to refer to the specified classes ofcertificates in order to aid your understanding of the offered certificates.

DESIGNATION CLASSES OF CERTIFICATES‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ Senior Certificates Class 1‐A‐1, Class 1‐A‐2, Class 1‐A‐3, Class 2‐A‐1, Class 2‐A‐2, Class 2‐A‐3, Class X and Class A‐R Certificates

Group 1 Senior Class 1‐A‐1, Class 1‐A‐2 Certificates and Class 1‐A‐3 Certificates

Group 2 Senior Class 2‐A‐1, Class 2‐A‐2 and Certificates Class 2‐A‐3 Certificates

Subordinated Class M‐1, Class M‐2, Class Certificates M‐3, Class M‐4, Class M‐5, Class M‐6, Class M‐7, Class M‐8, Class M‐9 and Class M‐10 Certificates



LIBOR Certificates Group 1 Senior Certificates, Group 2 Senior Certificates and Subordinated Certificates

Offered Certificates Senior Certificates and Subordinated Certificates

RECORD DATE

LIBOR Certificates:

The business day immediately preceding a distribution date, or if the LIBORCertificates are no longer book‐entry certificates, the last business day of thecalendar month preceding the month of that distribution date.

Class X Certificates:

For the first distribution date, the closing date. For any other distributiondate, the last business day of the month preceding the month of the distributiondate.

DENOMINATIONS

Offered Certificates other than the Class A‐R Certificates:

$25,000 and multiples of $1 in excess thereof.

Class A‐R Certificates:

Two certificates of $99.99 and $0.01, respectively.

REGISTRATION OF CERTIFICATES

Offered Certificates other than the Class A‐R Certificates:

Book‐entry form. Persons acquiring beneficial ownership interests in the offeredcertificates (other than the Class A‐R Certificates) will hold their beneficialinterests through The Depository Trust Company, in the United States, orClearstream, Luxembourg or the Euroclear System, in Europe.

Class A‐R Certificates:

Fully registered certificated form. The Class A‐R Certificates will be subjectto certain restrictions on transfer described in this prospectus supplement andas more fully provided for in the pooling and servicing agreement.

See "Description of the Certificates ‐‐ Book‐Entry Certificates; Denominations"and "‐‐ Restrictions on Transfer of the Class A‐R Certificates" in thisprospectus supplement.

DISTRIBUTION DATES

Beginning on March 26, 2007, and thereafter on the 25th day of each calendarmonth, or if the 25th is not a business day, the next business day.

LAST SCHEDULED DISTRIBUTION DATE

The last scheduled distribution date for the offered certificates is thedistribution date in April 2047. Since the rate of distributions in reduction ofthe class certificate balance of each class of offered certificates will dependon the rate of payment (including prepayments) of the mortgage loans, the classcertificate balance or notional amount of any class could be reduced to zerosignificantly earlier or later than the last scheduled distribution date.



See "Yield, Prepayment and Maturity Considerations ‐‐ Last ScheduledDistribution Date" in this prospectus supplement.

INTEREST PAYMENTS

The related accrual period, interest accrual convention and pass‐through ratefor each class of interest‐bearing certificates is shown in the table on pageS‐9.

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On each distribution date, to the extent funds are available, each class ofinterest‐bearing certificates will be entitled to receive:

‐ the interest that has accrued at the related pass‐through rate during the related accrual period on the class certificate balance or notional amount, as applicable, of that class of certificates immediately prior to that distribution date,

‐ interest carry forward amount, and

‐ with respect to the LIBOR certificates, any net rate carryover due and any accrued interest on this amount.

The pass‐through rate with respect to any class of certificates will be reducedto the extent that the amount of deferred interest on the related mortgage loansexceeds the principal payments on those mortgage loans for the applicabledistribution date, as described under "Description of the Certificates ‐‐Interest" in this prospectus supplement.

See "Description of the Certificates ‐‐ Distribution of Available Funds" in thisprospectus supplement.

PRINCIPAL PAYMENTS

On each distribution date, certificateholders will only receive a distributionof principal on their certificates if there is cash available on that date forthe payment of principal according to the principal distribution rules describedin this prospectus supplement. The priority of distributing principal among theclasses of certificates will differ, as described in this prospectus supplement,depending upon whether a distribution date occurs before the stepdown date, oron or after that date, and will depend on the loss and delinquency performanceof the mortgage loans.

See "Description of the Certificates ‐‐ Distribution of Available Funds" in thisprospectus supplement.

AMOUNTS AVAILABLE FOR DISTRIBUTIONS ON THE CERTIFICATES

The amount available for distributions on the certificates on any distributiondate will be calculated on a loan group by loan group basis and will generallyconsist of the following amounts with respect to a loan group (after the feesand expenses described under the next heading are subtracted):

‐ all scheduled installments of interest (after taking into account reductions due to deferred interest on the mortgage loans in that loan group) and principal due and received on those mortgage loans in the applicable period, together with any advances with respect to them;

‐ all proceeds of any primary mortgage guaranty insurance policies and any other insurance policies with respect to the mortgage loans in that loan group, to the extent the proceeds are not applied to the restoration of the related mortgaged property or released to the



borrower in accordance with the master servicer's normal servicing procedures;

‐ net proceeds from the liquidation of defaulted mortgage loans in that loan group by foreclosure or otherwise during the calendar month preceding the month of the distribution date (to the extent the amounts do not exceed the unpaid principal balance of the mortgage loan, plus accrued interest);

‐ subsequent recoveries with respect to the mortgage loans in that loan group;

‐ partial or full prepayments collected on the mortgage loans in that loan group during the applicable period, together with interest paid in connection with the prepayments (other than certain excess amounts payable to the master servicer) and the compensating interest; and

‐ any substitution adjustment amounts or purchase price in respect of a deleted mortgage loan or a mortgage loan repurchased by a seller or originator or purchased by the master servicer during the applicable period.

FEES AND EXPENSES

The amounts available for distributions on the certificates on any distributiondate generally will not include the following amounts:

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‐ the master servicing fee and additional servicing compensation (as described in this prospectus supplement under "Servicing of the Mortgage Loans‐‐ Servicing Compensation and Payment of Expenses") due to the master servicer;

‐ the trustee fee due to the trustee;

‐ lender paid mortgage insurance premiums, if any;

‐ the amounts in reimbursement for advances previously made and other amounts as to which the master servicer and the trustee are entitled to be reimbursed from the Certificate Account pursuant to the pooling and servicing agreement;

‐ all prepayment charges (which are distributable only to the Class P Certificates); and

‐ all other amounts for which the depositor, a seller or the master servicer is entitled to be reimbursed.

Any amounts paid from the amounts collected with respect to the mortgage loanswill reduce the amount that could have been distributed to thecertificateholders.

SERVICING COMPENSATION

Master Servicing Fee:

The master servicer will be paid a monthly fee (referred to as the masterservicing fee) with respect to each mortgage loan equal to one‐twelfth of thestated principal balance of that mortgage loan multiplied by 0.375% per annum(referred to as the master servicing fee rate). The amount of the masterservicing fee is subject to adjustment with respect to prepaid mortgage loans,as described under "Servicing of the Mortgage Loans‐‐Adjustment to Servicing



Compensation in Connection with Certain Prepaid Mortgage Loans" in thisprospectus supplement.

Additional Servicing Compensation:

The master servicer is also entitled to receive, as additional servicingcompensation, all late payment fees, assumption fees and other similar charges(excluding prepayment charges), prepayment interest excess and all reinvestmentincome earned on amounts on deposit in certain of the issuing entity's accountsand excess proceeds with respect to mortgage loans as described under "Servicingof the Mortgage Loans‐‐ Servicing Compensation and Payment of Expenses".

Source and Priority of Payments:

The master servicing fee and the additional servicing compensation describedabove will be paid to the master servicer from collections on the mortgage loansprior to any distributions on the certificates.

See "Servicing of the Mortgage Loans ‐‐ Servicing Compensation and Payment ofExpenses".

PRIORITY OF PAYMENTS; DISTRIBUTIONS OF PRINCIPAL AND INTEREST

On any distribution date, the aggregate available funds from both loan groupswill be distributed in the following order:

1. to the Class X Certificates, the current interest and the interestcarry forward amount for such class and such distribution date;

2. concurrently, to each class of senior certificates (other than theClass X Certificates and Class A‐R Certificates), the current interest and theinterest carry forward amount for each such class and such distribution date,pro rata based on their respective entitlements;

3. sequentially, to the Class M‐1, Class M‐2, Class M‐3, Class M‐4, ClassM‐5, Class M‐6, Class M‐7, Class M‐8, Class M‐9 and Class M‐10 Certificates, inthat order, the current interest for each such class and such distribution date;

4. a. for each distribution date prior to the stepdown date or on which atrigger event is in effect, in the following order:

(1) in an amount up to the principal distribution amount for such distribution date, concurrently, to the following classes of certificates, pro rata between the group 1 senior certificates and the group 2 senior certificates on the basis of the related principal distribution amount:

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(a) in an amount up to the group 1 principal distribution amount for such distribution date, in the following order:

(i) to the Class A‐R Certificates, until its class certificate balance is reduced to zero;

(ii) concurrently, to the Class 1‐A‐1, Class 1‐A‐2 and Class 1‐A‐3 Certificates, pro rata, until their respective class certificate balances are reduced to zero; and

(iii) concurrently, to the Class 2‐A‐1, Class 2‐A‐2 and Class 2‐A‐3 Certificates (after any distributions to such certificates from the group 2 principal distribution amount), pro rata, until their respective class certificate balances are reduced to zero; and

(b) in an amount up to the group 2 principal distribution amount for



such distribution date, in the following order:

(i) concurrently, to the Class 2‐A‐1, Class 2‐A‐2 and Class 2‐A‐3 Certificates, pro rata, until their respective class certificate balances are reduced to zero; and

(ii) concurrently, to the Class 1‐A‐1, Class 1‐A‐2 and Class 1‐A‐3 Certificates (after any distributions to such certificates from the group 1 principal distribution amount), pro rata, until their respective class certificate balances are reduced to zero; and

(2) the remaining principal distribution amount, sequentially, to the Class M‐1, Class M‐2, Class M‐3, Class M‐4, Class M‐5, Class M‐6, Class M‐7, Class M‐8, Class M‐9 and Class M‐10 Certificates, in that order, until their respective class certificate balances are reduced to zero; and

b. on each distribution date on or after the stepdown date so longas a trigger event is not in effect, in the following order:

(1) in an amount up to the senior principal distribution amount for such distribution date, concurrently, to the following classes of certificates, pro rata between the group 1 senior certificates and the group 2 senior certificates on the basis of the related senior principal distribution amount:

(a) in an amount up to the group 1 senior principal distribution amount for such distribution date, in the following order:


(ii) concurrently, to the Class 2‐A‐1, Class 2‐A‐2 and Class 2‐A‐3 Certificates (after any distributions to such certificates from the group 2 senior principal distribution amount), pro rata, until their respective class certificate balances are reduced to zero; and

(b) in an amount up to the group 2 senior principal distribution amount for such distribution date, in the following order:


(ii) concurrently, to the Class 1‐A‐1, Class 1‐A‐2 and Class 1‐A‐3 Certificates (after any distributions to such certificates from the group 1 senior principal distribution amount), pro rata, until their respective class certificate balances are reduced to zero; and

(2) sequentially, to the Class M‐1, Class M‐2, Class M‐3, Class M‐4, Class M‐5, Class M‐6, Class M‐7, Class M‐8, Class M‐9 and Class M‐10 Certificates, in that order, in an amount up to the subordinated class principal distribution amount for each such class, until their respective class certificate balances are reduced to zero;

5. sequentially, to the Class M‐1, Class M‐2, Class M‐3, Class M‐4, ClassM‐5, Class M‐6, Class M‐7, Class M‐8, Class M‐9 and Class M‐10 Certificates, inthat order, the interest carry forward amount for each such class and suchdistribution date;

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6. concurrently, to the classes of senior certificates, pro rata based onthe aggregate unpaid realized loss amount for the senior certificates (otherthan the Class X Certificates) related to each loan group, as follows;

a. in an amount up to the aggregate unpaid realized loss amount for the group 1 senior certificates, sequentially, to the Class 1‐A‐1, Class 1‐A‐2 and Class 1‐A‐3 Certificates, in that order, in an amount up to the unpaid realized loss amount for each such class; and

b. in an amount up to the aggregate unpaid realized loss amount for the group 2 senior certificates, sequentially, to the Class 2‐A‐1, Class 2‐A‐2 and Class 2‐A‐3 Certificates, in that order, in an amount up to the unpaid realized loss amount for each such class;

7. sequentially, to the Class M‐1, Class M‐2, Class M‐3, Class M‐4, ClassM‐5, Class M‐6, Class M‐7, Class M‐8, Class M‐9 and Class M‐10 Certificates, inthat order, in an amount up to the unpaid realized loss amount for each suchclass;

8. concurrently, to each class of senior certificates (other than theClass X Certificates and Class A‐R Certificates), in an amount up to the amountof net rate carryover for each such class, pro rata based on the amount of netrate carryover for each such class;

9. sequentially, to the Class M‐1, Class M‐2, Class M‐3, Class M‐4, ClassM‐5, Class M‐6, Class M‐7, Class M‐8, Class M‐9 and Class M‐10 Certificates, inthat order, in an amount up to the amount of net rate carryover for each suchclass; and

10. to the Class C and Class A‐R Certificates, in each case in the amountsspecified in the pooling and servicing agreement.

Trigger Events:

A "trigger event" refers to certain specified levels of losses and/ordelinquencies on the mortgage loans. Prior to the stepdown date or if a triggerevent is in effect on or after the stepdown date, all amounts distributable asprincipal on a distribution date will be allocated first to the seniorcertificates (other than the Class X Certificates), until those seniorcertificates are paid in full, before any distributions of principal are made onthe subordinated certificates.

The Stepdown Date:

The stepdown date will be the earlier of:

‐ the distribution date after the distribution date on which the aggregate class certificate balance of the senior certificates (other than the Class X Certificates) is reduced to zero; and

‐ the later to occur of (x) the distribution date in March 2010 and (y) the first distribution date on which a fraction, the numerator of which is the excess of the aggregate stated principal balance of the mortgage loans as of the due date in the month preceding the month in which that distribution date occurs (after giving effect to principal prepayments received in the prepayment period related to that due date) over the aggregate class certificate balance of the senior certificates (other than the Class X Certificates) immediately prior to that distribution date, and the denominator of which is the aggregate stated principal balance of the mortgage loans as of the due date in the month of the current distribution date (after giving effect to principal prepayments received in the prepayment period related to that due date) is greater than or equal to (a) approximately 22.500% on any distribution date prior to the distribution date in March 2013 and (b) approximately 18.000% on any



distribution date on or after the distribution date in March 2013.

THE CORRIDOR CONTRACTS AND THE CORRIDOR FLOOR CONTRACT

Beginning with the distribution date in March 2007, the LIBOR certificates willhave the benefit of two corridor contracts and a corridor floor contract. Thecorridor contracts and the corridor floor contract will be evidenced by threeseparate transactions between the counterparty and the trustee, acting on behalfof a separate supplemental interest trust created under the pooling andservicing agreement. On each distribution date up to and including the relatedtermination date of each contract, amounts, if any, received under the corridorcontracts and the corridor floor contract by the trustee, on behalf of thesupplemental interest trust, will be deposited in the corridor contract reservefund.

Prior to the distribution date in February 2010, if the amount ofovercollateralization is zero on such distribution date, amounts, if any, ondeposit in the corridor contract reserve fund will first be used to pay anyremaining current interest and interest carry forward amounts on the LIBORcertificates and then

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to restore and to maintain overcollateralization at the required level. Anyremaining amounts on deposit (or all such amounts, if the level ofovercollateralization is greater than zero on such distribution date) will beused to cover net rate carryover on the LIBOR certificates.

Beginning with the distribution date in February 2010 and on each subsequentdistribution date up to and including the distribution date in February 2017,amounts, if any, on deposit in the corridor contract reserve fund will first beused to pay any remaining current interest and interest carry forward amounts onthe LIBOR certificates and then to restore and maintain overcollateralization atthe required level. Any remaining amounts on deposit will be used to cover netrate carryover on the LIBOR certificates.

On any distribution date prior to the distribution date in February 2017,amounts , if any, on deposit in the corridor contract reserve fund in excess ofthe amounts distributed to the LIBOR certificates as described in the precedingtwo paragraphs will remain in the corridor contract reserve fund fordistribution to the holders of the LIBOR certificates on future distributiondates for the purposes described in the preceding two paragraphs. On thedistribution date in February 2017, following the distribution of any amounts inthe corridor contract reserve fund, remaining amounts will be released to Bancof America Securities LLC and will not be available for payments on futuredistribution dates.

The corridor contracts will never have amounts payable by the counterparty atthe same time that amounts are payable by the counterparty on the corridor floorcontract.

Payments under the corridor contracts and corridor floor contract will be madepursuant to the formulas described in "Description of the Certificates ‐‐ TheCorridor Contracts and the Corridor Floor Contract" in this prospectussupplement.

See "Description of the Certificates ‐‐ The Corridor Contracts and the CorridorFloor Contract" in this prospectus supplement.

ALLOCATION OF LOSSES

After the credit enhancement provided by excess cashflow andovercollateralization, if any, has been exhausted, collections otherwise payableto the subordinated classes will comprise the sole source of funds from which



credit enhancement is provided to the senior certificates. Realized losses willbe allocated in the following order of priority:

‐ to the subordinated certificates, beginning with the class of subordinated certificates with the lowest distribution priority, until the class certificate balance of that subordinated class has been reduced to zero, and

‐ to the group 1 senior certificates and group 2 senior certificates (other than the Class X Certificates), as follows:

(a) with respect to realized losses on the group 1 mortgage loans, sequentially, to the Class 1‐A‐3, Class 1‐A‐2 and Class 1‐A‐1 Certificates, in that order, in each case until their respective class certificate balances are reduced to zero; and

(b) with respect to realized losses on the group 2 mortgage loans, sequentially, to the Class 2‐A‐3, Class 2‐A‐2 and Class 2‐A‐1 Certificates, in that order, in each case until their respective class certificate balances are reduced to zero.

CREDIT ENHANCEMENT

Credit enhancement provides limited protection to holders of certaincertificates against shortfalls in payments received on the mortgage loans. Thistransaction employs the following forms of credit enhancement:

OVERCOLLATERALIZATION

"Overcollateralization" refers to the amount by which the aggregate statedprincipal balance of the mortgage loans exceeds the aggregate class certificatebalance of the offered certificates.

On the closing date, the aggregate stated principal balance of the mortgageloans is expected to exceed the initial aggregate class certificate balance ofthe certificates (other than the Class X Certificates) by approximately$5,712,010. This amount is approximately equal to the initial level ofovercollateralization required by the pooling and servicing agreement.

The mortgage loans are expected to generate more interest than is needed to payinterest on the certificates because the weighted average interest rate of themortgage loans is expected to be higher than

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the weighted average pass‐through rate on the certificates and the weightedaverage expense fee rate.

On any distribution date, the amount of overcollateralization, if any, will beavailable to absorb the losses from liquidated mortgage loans if those lossesare not otherwise covered by excess cashflow, if any, from the mortgage loans.The required level of overcollateralization may change over time.

See "Description of the Certificates‐‐Overcollateralization Provisions" in thisprospectus supplement.

SUBORDINATION

The issuance of senior certificates and subordinated certificates by the issuingentity is designed to increase the likelihood that senior certificateholderswill receive regular distributions of interest and principal.

The senior certificates will have a distribution priority over the subordinatedcertificates. Within the classes with an "M" designation, the distribution



priority is in numerical order.

Subordination is designed to provide the holders of certificates having a higherdistribution priority with protection against losses realized when the remainingunpaid principal balance of a mortgage loan exceeds the proceeds recovered uponthe liquidation of that mortgage loan. In general, this loss protection isaccomplished by allocating the realized losses on the mortgage loans first,among the subordinated certificates, beginning with the subordinatedcertificates with the lowest distribution priority, and second to the seniorcertificates in accordance with the priorities set forth above under " ‐‐Allocation of Losses."

See "Description of the Certificates ‐‐ Applied Realized Loss Amounts" in thisprospectus supplement and "Credit Enhancement" in the prospectus.

ADVANCES

The master servicer will make cash advances�

- cwalt 2007-oa3 prospectus... · 8/18/2016

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