The Mortgage Corporation

Northeast Regional Office
Federal Home Loan Mortgage Corporation
          2001 Jefferson Drive Hwy., Suite 901, Arlington, VA 22202
                             Phone (703) 685-2400



                                                          January 10, 1980


Mr. Richard D. Bank
President
First Mortgage Service Company
222 Keswick Avenue
Glenside, PA  19038

Dear Mr. Bank:

It is with pleasure that I advise you that your  application to become a Federal
Home  Loan   Mortgage   Corporation   Seller/Servicer   has  been  approved  for
conventional  one-four  family and FHA/VA  loans.  According to the  information
contained  in  your   application,   your  organization  has  had  very  limited
multi-family experience; therefore, we have not approved you for this program at
this time. If you feel that there is information  available  which should change
our  decision  that was not set forth in your  application,  you may reapply for
approval  of this  program  at any  time.  We would ask that you  document  your
request.

The FHLMC Seller/Servicer number assigned to your Institution is 1915-01. Please
use this number on all contracts  and official  documentation  when  transacting
business with FHLMC.

Information  concerning  the sale and  servicing  of loans for Federal Home Loan
Mortgage  Corporation is contained in our Sellers' Guide,  Servicers'  Guide and
Servicers'  Accounting  and  Reporting  Guide  (all of which  are  issued in one
loose-leaf  binder) and in the  Invitations  for Offers  which are  periodically
issued by The Mortgage Corporation.  I urge you to carefully review the contents
of our Guides  and  Invitations  prior to the time you enter into a contract  to
sell loans to us.

In connection with our approval of your organization as a  Seller/Servicer,  the
following requirements should be noted:
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         1. All loans submitted to FHLMC must be originated  utilizing the FHLMC
         Application  and Appraisal  forms,  and Uniform  Mortgage  Instruments,
         without modification.

         2. The loan  servicing for FHLMC must be performed by personnel of your
         organization or a wholly-owned subsidiary.

         3. In order to retain status as an approved  Seller/Servicer,  you must
         submit annually your year-end audited financial statement together with
         a report from the independent accountant relative to the examination of
         mortgage loan operations substantially in the form and content as shown
         on FHLMC Form 16 (as reproduced in the FHLMC Accounting Guide). We also
         must be  notified  should any  change  occur in the  ownership  of your
         institution.

         4. Prior to the time you enter into your  first  contract  with us, the
         personnel   responsible  for  your  loan  submissions,   servicing  and
         accounting  must  visit  our  office  to review  our  requirements  and
         reports.

I believe you will find everyone here extremely willing to make the relationship
between your staff and ours a pleasant one, and that they will be able to answer
any questions you may have. In order for this meeting to be more beneficial,  we
recommend  that your staff  review the  appropriate  sections of the FHLMC Guide
which covers their area of  responsibility.  Please  contact Mr. Louis  Paretti,
Vice  President-Operations  at (703) 685-2444 whenever you would like to come to
our office so that we can arrange for the appropriate  personnel to be available
to you.

It is a pleasure to welcome you as a Seller/Servicer.  Please do not hesitate to
call us whenever you have any questions.

                                                          Sincerely,

                                                          /s/ David G. Herold
                                                          -------------------
                                                          David G. Herold
                                                          Senior Vice President