<PAGE>

                                                                   Exhibit 10.38

                 AMENDMENT NO. 1 TO, AND WAIVER WITH RESPECT TO,
              AMENDED AND RESTATED WAREHOUSE AND SECURITY AGREEMENT

         This AMENDMENT NO. 1 TO, AND WAIVER WITH RESPECT TO, AMENDED AND
RESTATED WAREHOUSE AND SECURITY AGREEMENT (this "Amendment and Waiver") is made
as of July 9, 2002, to that certain Amended and Restated Warehouse and Security
Agreement, dated as of March 15, 2002, among TFC Warehouse Corporation I (the
"Borrower"), a Delaware corporation, The Finance Company (in its capacity as
initial purchaser of Contracts from Approved Dealers, "TFC" and, in its capacity
as servicer of the Contracts, the "Servicer"), a Virginia corporation , Wells
Fargo Bank Minnesota, National Association (the "Collateral Agent"), a national
banking association, and Westside Funding Corporation (the "Lender"), a Delaware
corporation, as modified pursuant to the waiver letter agreement dated March 15,
2002 by and among the Borrower, TFC, the Collateral Agent and the Lender, and
consented to by Royal Indemnity Company (the "Insurer"), as insurer (the "Loan
Agreement").

                              W I T N E S S E T H:

         WHEREAS, the Borrower, TFC, the Collateral Agent and the Lender have
entered into the Loan Agreement; and

         WHEREAS, the Borrower, TFC, the Collateral Agent and the Lender wish to
amend the Loan Agreement as provided herein; and

         WHEREAS, the Borrower, TFC, the Collateral Agent and the Lender wish to
waive a certain Event of Default and corresponding Funding Termination Event
under the Loan Agreement, as provided herein;

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

         Section 1.01. Defined Terms. For purposes of this Amendment and Waiver,
unless the context clearly requires otherwise, all capitalized terms which are
used but not otherwise defined herein shall have the respective meanings
ascribed to such terms in the Loan Agreement.

         Section 1.02. The Amendments.

            (a) $6,000,000 Monthly Limit on Advances. Section 2.01 of the Loan
Agreement is hereby amended, effective the date hereof, by adding the following
sentence to the end of such Section:

         Notwithstanding anything to the contrary contained herein, the
         aggregate amount of Advances made during any calendar month shall not
         exceed $6,000,000.

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            (b) Deletion of Provision Concerning Extension of Expected Facility
Termination Date. Section 2.11 of the Loan Agreement is hereby amended,
effective the date hereof, by replacing such Section with the following:

         Section 2.11  [Reserved].

In addition, the listing in the Table of Contents to the Loan Agreement of the
subheading for Section 2.11 as "Extension of Expected Facility Termination Date"
shall be replaced with a listing therein of the subheading for such Section as
"[Reserved]".

            (c) Covenant of TFC with Respect to Additional Warehouse Financing.
Section 7.02(d) of the Loan Agreement is hereby amended, effective the date
hereof, by replacing clauses (C) and (D) of such Section with the following:

         (C) the aggregate amount of commitments from such Warehouse Lenders is
         not less than $40,000,000 and (D) no event or circumstance has occurred
         and is continuing which would prevent TFC from obtaining funding under
         such warehouse lines of credit in an amount of up to $40,000,000.

            (d) Event of Default with Respect to Failure to Maintain Credit
Lines. Section 8.01(k) of the Loan Agreement is hereby amended, effective the
date hereof, by replacing clauses (C) and (D) of such Section with the
following:

         (C) the aggregate amount of commitments from such Warehouse Lenders is
         not less than $40,000,000 and (D) no event or circumstance has occurred
         and is continuing which would prevent TFC from obtaining funding under
         such warehouse lines of credit in an amount of up to $40,000,000.

            (e) Definition of "Expected Facility Termination Date". Appendix A
to the Loan Agreement is hereby amended, effective the date hereof, by replacing
the definition of the term "Expected Facility Termination Date" with the
following definition:

         "Expected Facility Termination Date" means July 1, 2003.

            (f) Definition of "Maximum Facility Amount". Appendix A to the Loan
Agreement is hereby amended, effective the date hereof, by replacing the
definition of the term "Maximum Facility Amount" with the following definition:

         "Maximum Facility Amount" means $40,000,000.

            (g) Advance Rate Matrix. Exhibit A to the Loan Agreement is hereby
amended, effective the date hereof, by replacing the Advance Rate Matrix set
forth therein with the following Advance Rate Matrix:

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                               ADVANCE RATE MATRIX

<TABLE>
<CAPTION>
      -------------------------------------------------------------------------------------------------------
           Weighted Average             Weighted Average Portfolio Remaining Term (in Months)
           Portfolio Spread                34 to 39                    40 to 45                46 or more
      -------------------------------------------------------------------------------------------------------
      <S>                         <C>                         <C>                         <C>
             1.9% to 2.8%                   64.65%                      64.35%                  64.05%
             2.9% to 3.8%                   65.65%                      65.45%                  65.25%
             3.9% to 4.8%                   66.65%                      66.55%                  66.45%
             4.9% to 5.8%                   67.65%                      67.65%                  67.75%
             5.9% to 6.8%                   68.65%                      68.85%                  68.95%
             6.9% to 7.8%                   69.65%                      69.95%                  70.25%
             7.9% to 8.8%                   70.65%                      71.15%                  71.55%
             8.9% to 9.8%                   71.75%                      72.25%                  72.75%
            9.9% to 10.8%                   72.75%                      73.00%                  73.00%
           10.9% or higher                  73.00%                      73.00%                  73.00%
      -------------------------------------------------------------------------------------------------------
</TABLE>

         Section 1.03. Waiver of Events of Default and Funding Termination
Events.

            (a) Notwithstanding the definitions of "Required Reserve Account
Percentage and "Trigger Event" in Appendix A to the Loan Agreement, the excess
of (x) the Net Realized Loss Rate with respect to any Monthly Static Pool, as of
any Determination Date occurring prior to the thirtieth (30/th/) day following
the date of this Amendment and Waiver over (y) the Net Loss Trigger Percentage
with respect to such Monthly Static Pool for such Determination Date shall not
constitute the occurrence or continuation of a Trigger Event and shall not
result in any increase of the Required Reserve Account Percentage from 2.0% to
5.0% during the 30-day period commencing on the date of this Amendment and
Waiver.

            (b) Notwithstanding Section 8.01(k) of the Loan Agreement, neither
(i) the failure of TFC at any time prior to the date of this Amendment and
Waiver to maintain warehouse lines of credit with respect to which the aggregate
amount of commitments from the related Warehouse Lenders is not less than
$50,000,000 nor (ii) the occurrence and continuation, at any time prior to the
date of this Amendment and Waiver, of any event or circumstance that would
prevent TFC from obtaining funding under such warehouse lines of credit in an
amount of up to $50,000,000 shall constitute, or shall have constituted at any
time prior to the date of this Amendment and Waiver, an Event of Default or a
Funding Termination Event.

            (c) Notwithstanding Section 8.01(m) of the Loan Agreement, the
excess of (x) the Net Realized Loss Rate with respect to any Monthly Static
Pool, as of any date of determination prior to the date of this Amendment and
Waiver, over (y) the Net Loss Default Percentage with respect to such Monthly
Static Pool for such date of determination shall not constitute, and shall not
have constituted at any time prior to the date of this Amendment and Waiver, an
Event of Default or a Funding Termination Event; provided, however, that the
waiver set forth in this Section 1.03(c) shall be effective during the 30-day
period commencing on the date of this Amendment and Waiver.

         Section 1.04. Acknowledgement of Agreement to Negotiate Amendments to
Definition of "Trigger Event". By its consent to this Amendment and Waiver, the
Insurer acknowledges

                                       3

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that it has agreed to commence, no later than 30 days after the date of this
Amendment and Waiver, negotiations with respect to certain amendments to the
definition of "Trigger Event" in Appendix A to the Loan Agreement that are
mutually acceptable to the Insurer, the Borrower, TFC and the Lender, provided
that (i) the results of a certain audit of TFC currently being conducted by the
Insurer are reasonably satisfactory to the Insurer and (ii) during the 30-day
period commencing on the date of this Amendment and Waiver, there are no
developments with respect to the performance of the Contracts or the financial
condition of TFC that the insurer reasonably determines to be materially adverse
to the interests of the Insurer.

         Section 1.05. Effect of Amendment and Waiver. Upon effectiveness of
this Amendment and Waiver, the Loan Agreement shall be, and be deemed to be,
modified and amended in accordance herewith and the respective rights,
limitations, obligations, duties, liabilities and immunities of the Borrower,
TFC, the Lender, the Collateral Agent and each third party beneficiary hereof
shall hereafter be determined, exercised and enforced subject in all respects to
such modifications and amendments, and all the terms and conditions of this
Amendment and Waiver shall be and be deemed to be part of the terms and
conditions of the Loan Agreement for any and all purposes. All other terms and
conditions of the Loan Agreement shall not be modified or amended and shall
remain in full force and effect.

         Section 1.06. Construction of Amendment and Waiver in Relation to
Original Agreement. In case of any inconsistency between any provisions of this
Amendment and Waiver and any provisions of the Loan Agreement prior to this
Amendment and Waiver, the provisions of this Amendment and Waiver shall control.

         Section 1.07. Governing Law. This Amendment and Waiver shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to the conflicts of law principles thereof.

         Section 1.08. Severability of Provisions. If one or more of the
provisions of this Amendment and Waiver shall be for any reason whatever held
invalid or unenforceable, such provision(s) shall be deemed severable from the
remaining covenants, agreements and provisions of this Amendment and Waiver and
shall in no way affect the validity or enforceability of such remaining
provisions or the rights of any parties hereto or third party beneficiaries
hereof.

         Section 1.09. Binding Effect. The provisions of this Amendment and
Waiver shall be binding upon and inure to the benefit of the parties hereto and
third party beneficiaries hereof and their respective successors and permitted
assigns.

         Section 1.10. Counterparts. This Amendment and Waiver may be executed
in any number of counterparts, each of which shall be an original and all of
which taken together shall constitute but one and the same instrument.

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<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment and Waiver to be duly executed by their respective officers thereunto
duly authorized, as of the day first above written.

                                       WESTSIDE FUNDING CORPORATION

                                       By: Westdeutsche Landesbank Girozentrale,
                                           New York Branch, as Administrator


                                           By:_________________________________
                                               Name:
                                               Title:


                                           By:_________________________________
                                               Name:
                                               Title:


                                       TFC WAREHOUSE CORPORATION I


                                       By:______________________________________
                                          Name:
                                          Title:


                                       THE FINANCE COMPANY


                                       By:______________________________________
                                          Name:
                                          Title:


                                       WELLS FARGO BANK MINNESOTA,
                                       NATIONAL ASSOCIATION


                                       By:______________________________________
                                          Name:
                                          Title:

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<PAGE>

Consented to as of the date first above:

ROYAL INDEMNITY COMPANY

By:____________________________________
Name:
Title:

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