Exhibit 99.2
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Report on Management's Assertion on
Compliance with the Minimum Servicing Standards Set Forth in the
Uniform Single Attestation Program for Mortgage Bankers
Report of Independent Accountants
The Board of Directors
Aames Investment Corporation
We have examined management's assertion, included in the accompanying report
titled Report of Management, that Aames Investment Corporation (the Company)
complied with the minimum servicing standards identified in Exhibit A to the
Report of Management as set forth in the Mortgage Banker's Association of
America's Uniform Single Attestation Program for Mortgage Bankers (USAP) (the
specified minimum servicing standards) during the year ended December 31,
2005. Management is responsible for the Company's compliance with those
requirements. Our responsibility is to express an opinion on the Company's
compliance based on our examination.
Our examination was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants and,
accordingly, included examining, on a test basis, evidence about the Company's
compliance with those requirements and performing such other procedures as we
considered necessary in the circumstances. We believe that our examination
provides a reasonable basis for our opinion. Our examination does not provide
a legal determination on the Company's compliance with specified minimum
servicing standards.
In our opinion, the Company complied, in all material respects, based on the
criteria set forth in Exhibit A, with the aforementioned requirements for the
year ended December 31, 2005.
ERNST & YOUNG LLP
Los Angeles, California
March 14, 2006
Aames
Aames Investment 350 S. Grand Avenue Tel: 323.210.5000
Corporation 42nd Floor
Los Angeles, CA 90071
Management's Assertion on Compliance
with the Specified Minimum Servicing Standards Set Forth
in the Uniform Single Attestation Program for Mortgage Bankers
Report of Management
We, as members of management of Aames Investment Corporation (the
Company), are responsible for complying with the minimum servicing
standards identified in the attached Exhibit A (the "specified minimum
servicing standards") as set forth in the Mortgage Bankers Association
of America's Uniform Single Attestation Program for Mortgage Bankers
(USAP). We are also responsible for establishing and maintaining
effective internal control over compliance with these specified minimum
servicing standards. We have performed an evaluation of the Company's
compliance with the specified minimum servicing standards as of
December 31, 2005 and for the year then ended. Based on this
evaluation, we assert that during the year ended December 31, 2005 the
Company complied, in all material respects, with the specified minimum
servicing standards.
As of December 31, 2005 and for the year then ended, the Company had n
effect a fidelity bond in the amount of $10 million and an errors and
omissions policy in the amount of $20 million.
/s/ A. Jay Meyerson
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A. Jay Meyerson
Chief Executive Officer
/s/ Jon Van Deuren
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Jon Van Deuren
Executive Vice President, Finance and
Chief Financial Officer
/s/ Mark A. Bragg
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Mark A. Bragg
Senior Vice President
National Loan Servicing
March 14, 2006
[LOGO OMITTED]
Exhibit A
Specified Minimum Servicing Standards
I. Custodial Bank Accounts
1. Reconciliations shall be prepared on a monthly basis for all
custodial bank accounts and related bank clearing accounts. These
reconciliations shall:
a. be mathematically accurate;
b. be prepared within forty-five (45) calendar days after the
cutoff date. The cutoff date is the date as of which a bank
account is reconciled every month. It may, or may not, coincide
with a prescribed investor reporting date but shall be
consistent from period to period;
c. be reviewed and approved by someone other than the person who
prepared the reconciliation; and
d. document explanations for reconciling items. These reconciling
items shall be resolved within ninety (90) calendar days of
their original identification.
2. Funds of the servicing entity shall be advanced in cases where
there is an overdraft in an investor's or a mortgagor's account.
3. Each custodial account shall be maintained at a federally insured
depository institution in trust for the applicable investor.
4. Escrow funds held in trust for a mortgagor shall be returned to the
mortgagor within thirty (30) calendar days of payoff of the
mortgage loan.
II. Mortgage Payments
1. Mortgage payments shall be deposited into the custodial bank
accounts and related bank clearing accounts within two (2) business
days of receipt.
2. Mortgage payments made in accordance with the mortgagor's loan
documents shall be posted to the applicable mortgagor records
within two (2) business days of receipt.
3. Mortgage payments shall be allocated to principal, interest,
insurance, taxes or other escrow items in accordance with the
mortgagor's loan documents.
4. Mortgage payments identified as loan payoffs shall be allocated in
accordance with the mortgagor's loan documents.
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Exhibit A
Specified Minimum Servicing Standards (continued)
III. Disbursements
1. Disbursements made via wire transfer on behalf of a mortgagor
or investor shall be made only by authorized personnel.
2. Disbursements made on behalf of a mortgagor or investor shall
be posted within two (2) business days to the mortgagor's or
investor's records maintained by the servicing entity.
3. Tax and insurance payments shall be made on or before the
penalty or insurance policy expiration dates, as indicated on
tax bills and insurance premium notices, respectively,
provided that such support has been received by the servicing
entity at least thirty (30) calendar days prior to these
dates.
4. Any late payment penalties paid in conjunction with the
payment of any tax bill or insurance premium notice shall be
paid from the servicing entity's funds and not charged to the
mortgagor, unless the late payment was due to the mortgagor's
error or omission.
5. Amounts remitted to investors per the servicer's investor
reports shall agree with cancelled checks, or other form of
payment, or custodial bank statements.
6. Unissued checks shall be safeguarded so as to prevent
unauthorized access.
IV. Investor Accounting and Reporting
1. The servicing entity's investor reports shall agree with, or
reconcile to, investors' records on a monthly basis as to the
total unpaid principal balance and number of loans serviced
by the servicing entity.
V. Mortgagor Loan Accounting
1. The servicing entity's mortgage loan records shall agree
with, or reconcile to, the records of mortgagors with respect
to the unpaid principal balance on a monthly basis.
2. Adjustments on adjustable rate mortgage (ARM) loans shall be
computed based on the related mortgage note and any ARM rider.
3. Escrow accounts shall be analyzed, in accordance with the mortgagor's
loan documents, on at least an annual basis.
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Exhibit A
Specified Minimum Servicing Standards (continued)
V. Mortgagor Loan Accounting (continued)
4. Interest on escrow accounts shall be paid, or credited, to
mortgagors in accordance with the applicable state laws.
VI. Delinquencies
1. Records documenting collection efforts shall be maintained during
the period a loan is in default and shall be updated at least
monthly. Such records shall describe the entity's activities in
monitoring delinquent loans including, for example, phone calls,
letters and mortgage payment rescheduling plans in cases where the
delinquency is deemed temporary (i.e., illness or unemployment).
VII. Insurance Policies
1. A fidelity bond and errors and omissions policy shall be in effect
on the servicing entity throughout the reporting period in the
amount of coverage represented to investors in management's
assertion.
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